Explanatory note
(This note is not part of the Order)
Under section 59 of the Social Security Pensions Act 1975 as amended by section 11 of the Social Security Act 1979 and as modified by section 59A of the 1975 Act (introduced by section 11(4) of the 1979 Act) the Treasury (in whom the functions conferred by those provisions are now vested) are required to provide by order for the increase in the rates of public service pensions. The increase is the percentage (or in some circumstances a fraction of the percentage) by which the Secretary of State for Social Services has, by directions given under the provisions of section 23(2) of the Social Security Pensions Act 1975 (as amended by Schedule 10, paragraph 91 of the Social Security Act 1986), increased the sums referred to in section 63(1)(b) of the Social Security Act 1986. These are the sums which are the additional components in the rates of long term benefits, namely the additional pension entitlements accruing to employees in respect of earnings after 5th April 1978.
For pensions which began before 11th April 1988 the increase is 5.9 per cent. For pensions which began on or after 11th April 1988 the increases are as follows–
| Pensions Beginning | Percentage Increase | Pensions Beginning | Percentage Increase |
|---|---|---|---|
| 11th April 1988 to 25th April 1988 | 5.9% | 26th September 1988 to 25th October 1988 | 2.95% |
| 26th April 1988 to 25th May 1988 | 5.41% | 26th October 1988 to 25th November 1988 | 2.46% |
| 26th May 1988 to 25th June 1988 | 4.92% | 26th November 1988 to 25th December 1988 | 1.97% |
| 26th June 1988 to 25th July 1988 | 4.43% | 26th December 1988 to 25th January 1989 | 1.47% |
| 26th July 1988 to 25th August 1988 | 3.93% | 26th January 1989 to 25th February 1989 | 0.98% |
| 26th August 1988 to 25th September 1988 | 3.44% | 26th February 1989 to 25th March 1989 | 0.49% |
Deferred lump sums beginning on or before 25th March 1989 and which become payable after 9th April 1989 receive the same percentage increase as pensions which began on the same date. Article 4 of the Order provides for increases on certain deferred lump sums which became payable on or after 11th April 1988 and before 10th April 1989.
The Order also makes provision for the amount by reference to which any increase in the rate of an official pension is to be calculated to be reduced by the amount equal to the rate of the guaranteed minimum pension entitlement deriving from the employment which gives rise to the official pension. This is required by section 59(5) of the Social Security Pensions Act 1975 but by virtue of section 59A of that Act and the Transfer of Functions (Minister for the Civil Service and Treasury) Order 1981 the Treasury is empowered to direct that in respect of specified cases or classes of case either no such reduction be made or the reduction shall be less than the rate of the guaranteed minimum pension.