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Revaluation of deferred benefits
by Steve Rideout 09/12/2010
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The Occupational Pensions (Revaluation) Order 2010 (SI 2010/2861) was laid before Parliament yesterday and comes into force on 1 January 2011. The Order specifies the percentage by which deferred benefits coming into payment (at NPA) under a final salary scheme during the calendar year 2011 must be revalued. This depends on how many completed periods of 365 days have elapsed since the individual left pensionable service. The figures are as follows:
Number of completed
365-day periods |
Higher
Revaluation
Percentage |
Lower
Revaluation
Percentage |
0 |
0.0% |
0.0% |
1 |
3.1% |
2.5% |
2 |
1.7% |
1.7% |
3 |
6.7% |
- |
4 |
10.9% |
- |
5 |
14.9% |
- |
6 |
18.0% |
- |
7 |
21.7% |
- |
8 |
25.1% |
- |
9 |
27.2% |
- |
10 |
29.3% |
- |
11 |
33.6% |
- |
12 |
35.1% |
- |
13 |
39.4% |
- |
14 |
44.4% |
- |
15 |
47.5% |
- |
16 |
53.2% |
- |
17 |
56.6% |
- |
18 |
59.4% |
- |
19 |
65.1% |
- |
20 |
71.9% |
- |
21 |
90.7% |
- |
22 |
105.1% |
- |
23 |
116.8% |
- |
24 |
125.9% |
- |
25 |
132.9% |
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This year, the Secretary of State considers the Consumer Prices Index (CPI) to be the most appropriate measure of inflation for the latest 12 month period. The judgement of inflation already made for the purposes of previous annual orders, based on the Retail Prices Index (RPI), will not change however.
Note that in the case of a contracted-out scheme, this revaluation does not apply to any GMP element of benefits accrued to 5.4.97. GMPs are separately revalued to State Pension Age, by either a fixed rate or in line with Section 148 (formerly s. 21) Orders. The latter are officially known as Revaluation of Earnings Factors Orders and should not be confused with Revaluation Orders as above.
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