Explanatory note

This Order is made consequent upon a review under section 21 of the Social Security Pensions Act 1975 (“the Pensions Act”), which provides for the revaluation of earnings factors so that they maintain their value in relation to the general level of earnings obtaining in Great Britain.

The Order directs that the earnings factors relevant to calculating the additional component in the rate of any long-term benefit for the tax years specified in the Schedule to the Order are to be increased by the percentage of their amount specified in that Schedule. The percentage for the tax year 1983–84 has been fixed at 8.0 per cent: those for earlier years have also been increased. The Order also provides for the rounding of fractional amounts.

For the purpose of certain occupational pension schemes which are contracted out under Part III of the Pensions Act, the increases made by this Order are applied, by sections 34(5)(b) and 37(2)(b), to the calculation of the earner's average annual salary and, by section 35(5), to the earnings factor used in calculating his guaranteed minimum pension.