Regulation 7 State scheme premiums increased by interest on incentive payments
For the purposes of section 7(7)(b) of the Act (state scheme premiums under section 44 or 44A of the Social Security Pensions Act 1975 to be increased by the amount of a payment under section 7 of the Act and interest on that payment) the interest shall be calculated in accordance with paragraph (3).
In this regulation, “the relevant period” means a period beginning on the date on which the payment under section 7 was made, and ending—
where the state scheme premium is an accrued rights premium or a pensioner's rights premium—
on the date (if any) on which arrangements made in relation to the relevant earner and approved by the Occupational Pensions Board under section 44 of the Social Security Pensions Act 1975 ceased to be so approved, or
if no such arrangements have been so approved, on the date of the determination by the Occupational Pensions Board as a result of which the relevant occupational pension scheme ceased to be contracted-out;
and
where the state scheme premium is a transfer premium, on the date of the election to pay it.
The interest shall be calculated at the rate of 8½ per cent. a year compound, so however that—
if the relevant period is less than a year, no interest shall be paid; and
if the relevant period consists of one or more complete years followed by a part of a year, the interest during that part of a year shall be calculated at the rate, for each day in that part of a year, of 8� per cent. divided by 366 where that day falls, or 365 where it does not fall, within a period of a year which begins on an anniversary of the first day of the relevant period and includes 29th February.