As we approach the start of a new tax year the DWP's legislation generator has once more suddenly gone into overdrive, with eight new SIs appearing on the web in the last few days.

1. The Guaranteed Minimum Pensions Increase Order 2009 (SI 2009/477) specifies 3% as the percentage by which that part of any GMP attributable to earnings factors for the tax years 1988-89 to 1996-97 and payable by contracted-out DB schemes is to be increased, as prescribed by PSA 93 s.109(3). This Order comes into force on 6 April 2009.

2. The Social Security Benefits Up-rating Order 2009 (SI 2009/497) specifies the 2009/10 rates of a long list of state benefits, including the basic state pension. Under SSAA 92 s.150(1), the Secretary of State is required to review the levels of benefits annually with a further requirement, under s.150(2)(a), to increase contributory and non-contributory benefits at least in line with prices. Accordingly, state benefits generally are to rise by 5.0% in the week commencing 6 April 2009.

Key figures to note are:
		2008/09		2009/10
Basic State Pension		£90.70		£95.25
Graduated Retirement Benefit		10.98p		11.53p
Statutory Maternity Pay		£117.18		£123.06
Statutory Paternity Pay		£117.18		£123.06
Statutory Adoption Pay		£117.18		£123.06
Statutory Sick Pay		£75.40		£79.15

3. The Social Security Pensions (Low Earnings Threshold) Order 2009 (SI 2009/610). The Low Earnings Threshold (LET) is relevant to calculation of the additional pension (the state second pension, S2P) in a state retirement pension. From 2002 onwards, the following are treated as if they had earnings at the LET for S2P purposes:

• employees earning at or above the annual LEL (£4,940 for 2009/10) up to the LET;
• qualifying carers; and
• qualifying disabled people.

Under SSAA 92 s.148A, each year the Secretary of State is obliged to review the level of average earnings - which in practice means the National Average Earnings Index (Whole Economy, ie not seasonally adjusted) - for the period from 1 October to 30 September and decide on that basis whether the LET should be altered. The rise in NAE over the year to 30 September 2008 was 3.1%. The LET for the tax year 2008/09 was £13,500 by virtue of SI 2008/726. This means that, with rounding to the nearest £100 (as required under the Act), the threshold is increased to £13,900 for 2009/10. This Threshold is directed by the Order, which comes into force on 6 April 2009.

Availability of the figure for the LET enables us to calculate the Upper Earnings Threshold (UET), which is also used in calculation of S2P:

• UET = 3 x LET - 2 x QEF (with 2 x QEF rounded to nearest £100)
• LET = £13,900 and, therefore, 3 x LET = £41,700
• QEF = 52 x weekly LEL, ie 52 x £95 = £4,940, so 2 x QEF (rounded) = £9,900

Thus UET for 2009/10 is calculated as £41,700 - £9,900 = £31,800.

4. The Social Security Revaluation of Earnings Factors Order 2009 (SI 2009/608). Commonly known as the s.148 Order, this specifies the percentages by which band earnings are revalued, in order to calculate any accrued S2P, SERPS or GMP benefits. The annual s.148 Order is also relevant for revaluing state scheme pension credits and debits. The percentage for tax year 2009/10 is 3.1% (as determined for the LET - see above).

The full Schedule of rates applicable to earners leaving contracted-out employment in 2009/10 (by authority of PSA 93 s.16) is as follows:

This Order also comes into force on 6 April 2009.

5. The Pension Protection Fund (Miscellaneous Amendments) Regulations 2009 (SI 2009/451) make miscellaneous amendments to various SIs relating to the PPF, including changes concerning the rules surrounding eligibility for the PPF; the provision of revaluation and compensation; and minor technical changes. The DWP consulted on an earlier draft of this SI in December 2007 (see Aries article). The regs come into force on 1 April 2009.

6. The Pensions Regulator (Miscellaneous Amendment) Regulations 2009 (SI 2009/617) amend the Pensions Regulator (Financial Support Directions etc.) Regulations 2005 (SI 2005/2188) and the Pensions Regulator (Notifiable Events) Regulations 2005 (SI 2005/900). The DWP consulted on a draft of this SI in December 2008 (see Aries article). The regs come into force on 6 April 2009.

7. The Occupational, Personal and Stakeholder Pensions (Miscellaneous Amendments) Regulations 2009 (SI 2009/615) were the subject of another DWP consultation last December (see Aries article). One particular purpose, as we reported, was to align contracting-out and other DWP legislation with the new scheme-specific trivial commutation rule proposed by HMRC last May (see Aries report). HMRC's continued delay in finalising the Regs has forced the DWP to drop these changes from the final SI laid today. The accompanying Explanatory Memorandum, whilst generally helpful, is notably silent on these significant omissions.

As a result of consultation comments, changes were made to the statutory overrides provisions in regulations 3 (revaluation) and 7 (indexation) to provide that:

• the provisions cannot be used retrospectively;
• the modification power can only be used if the employer agrees; and
• any modification made under the power cannot provide for increases in the rates of indexation or revaluation.

One mystery is cleared up. The DWP consulted separately on some of the amendments in regulation 15 as the draft Pension Sharing (Pension Credit Benefit) (Amendment) Regulations 2008 and published the response to the consultation in August 2008 (see Aries report). We had been waiting for the promised regs to appear ever since.

8. The Pensions Act 2008 (Abolition of Safeguarded Rights) (Consequential) Order 2009 (SI 2009/598) removes references in pensions secondary legislation to safeguarded rights - eleven SIs in total are modified. Safeguarded rights arise when a member's rights in an occupational or personal pension scheme which is contracted-out of the state second pension are shared on divorce or dissolution of a civil partnership. PA 2008 s.100 and the related repeals in Schedule 11 Part 2 abolish safeguarded rights altogether with effect from 6 April 2009. From that date, shared rights that derive from contracted-out rights will be treated in the same way as other shared rights.