The Occupational Pensions (Revaluation) Order 2019 (SI 2019/1433) has been published and comes into force on 1 January 2020.

The Order specifies the percentage by which deferred benefits coming into payment (at NPA) under a final salary scheme during the calendar year 2020 must be revalued. This depends on how many completed periods of 365 days have elapsed since the individual left pensionable service.

The "higher revaluation percentage" figure corresponds to either the rise in prices or 5% pa compound, whichever is the lower, over the whole of each period of deferment. This is the minimum increase which must be applied for a preserved pension based on pensionable service carried out before 6 April 2009.

The Pensions Act 2008 reduced the 5% 'cap' to 2.5% compound per annum for pension based on service from 6 April 2009, though schemes may continue

to use the higher cap under scheme rules. Thus the second column of figures (the "lower revaluation percentage") represents the lower of the rise in prices or 2.5% pa compound over the period.

Note that in the case of a formerly contracted-out scheme, this revaluation does not apply to any GMP element of benefits accrued to 5.4.97. GMPs are separately revalued . . .

01 Nov 2019   Check other news items