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"the 1965 Act" means the National Insurance Act 1965[5];

"the Administration Act" means the Social Security Administration Act 1992[6];

"the Benefits Act" means the Social Security Contributions and Benefits Act 1992 and references to Schedule 5 are to Schedule 5 to that Act[7];

"incremental period" shall have the meaning ascribed to it in paragraph 4(6) of Schedule 1.

Amendment of the 1965 Act
     2.  - (1) The 1965 Act shall be amended in accordance with the following paragraphs.

    (2) In section 36 (graduated retirement benefit) - 

(a) for subsection (4), there shall be substituted the following - 

    " (4) Where a person's entitlement to graduated retirement benefit is deferred - 


(a) Schedule 2 to the Social Security (Graduated Retirement Benefit) (No.2) Regulations 1978[8]; and

(b) Schedule 1 to the 2005 Regulations,



shall have effect and both those Schedules shall be construed and have effect as if they were part of this subsection.

    (4A) For the purposes of subsection (4), a person's entitlement to graduated retirement benefit is deferred - 



(a) where he would be entitled to a Category A or Category B retirement pension but for the fact that his entitlement is deferred within the meaning in section 55(3) of the Social Security Contributions and Benefits Act 1992[9], if and so long as his entitlement to such a pension is deferred;

(b) where he is treated under subsection (7) as receiving a Category A or a Category B retirement pension at a nominal weekly rate, if and so long as he does not become entitled to graduated retirement benefit by reason only of not satisfying the conditions in section 1 of the Social Security Administration Act 1992 (entitlement to benefit dependent on claim),



and in relation to graduated retirement benefit, "period of deferment" shall be construed accordingly.".

(b) in subsection (8), after the definition of "the Act", there shall be inserted the following definition - 

" "the 2005 Regulations" means the Social Security (Graduated Retirement Benefit) Regulations 2005[10],".

    (3) In section 37(1) (special provisions as to graduated retirement benefit for widows and widowers), after the words "Subject to the provisions of this section" there shall be inserted the words "and to Schedule 1 to the 2005 Regulations".

Amendment of Schedule 2 to the Social Security (Graduated Retirement Benefit) (No.2) Regulations 1978 and saving
     3.  - (1) Subject to paragraph (2), in Schedule 2 to the Social Security (Graduated Retirement Benefit) (No.2) Regulations 1978 - 

(a) the word "and" at the end of paragraph 1(a) and paragraph 1(b); and

(b) paragraphs 2 to 4,

shall be omitted.

    (2) Schedule 2 to those Regulations shall have effect as if the amendments made by paragraph (1) had not been made in the case of - 

(a) periods of deferment (as defined by section 36(4A) of the 1965 Act) ending before 6th April 2005; and

(b) incremental periods beginning before that date.

Schedule 1
     4. Schedule 1 to these Regulations (which makes further provision replacing section 36(4) of the 1965 Act) shall have effect.

Modification of Schedule 1 in transitional cases
     5. Schedule 1 shall be modified by Schedule 2 in relation to transitional cases and in this regulation, a "transitional case" means a case where a person's entitlement to graduated retirement benefit is deferred and the period of deferment begins before 6th April 2005 and continues on or after that day.



Signed by authority of the Secretary of State for Work and Pensions.


Malcolm Wicks
Minister of State, Department for Work and Pensions

3rd March 2005

(a) that paragraph 1 of Schedule 5 (increase of pension) is to apply in relation to the period of deferment, paragraph 3 of this Schedule shall also apply in relation to that period;

(b) that paragraph 3A of Schedule 5 (lump sum) is to apply in relation to the period of deferment, paragraph 5 of this Schedule shall also apply in relation to that period.

    (2) The reference to an election in sub-paragraph (1) includes an election a person is treated as having made under paragraph A1(2) of Schedule 5.

Increase where pensioner's entitlement is deferred
     3.  - (1) This paragraph applies where - 

(a) entitlement to a Category A or Category B retirement pension is deferred and the period of deferment is less than 12 months; or

(b) paragraph 2(1)(a) applies.

    (2) The rate of the person's graduated retirement benefit shall be increased by an amount equal to the aggregate of the increments to which he is entitled under paragraph 4 but only if that amount is enough to increase the rate of the benefit by at least 1 per cent.

Calculation of increment
     4.  - (1) A person is entitled to an increment under this paragraph for each complete incremental period in his period of deferment.

    (2) The amount of the increment for an incremental period shall be 1/5th per cent. of the weekly rate of the graduated retirement benefit to which the person would have been entitled for the period if his entitlement to a Category A or Category B retirement pension had not been deferred.

    (3) For the purposes of sub-paragraph (2), the weekly rate of graduated retirement benefit shall be taken to include any increase in the weekly rate of that benefit and the amount of the increment in respect of such an increase shall be 1/5th per cent. of its weekly rate for each incremental period in the period of deferment beginning on the day the increase occurred.

    (4) Amounts under sub-paragraphs (2) and (3) shall be rounded to the nearest penny, taking any ½p as nearest to the next whole penny.

    (5) Where an amount under sub-paragraph (2) or (3) would, apart from this sub-paragraph, be a sum less than ½p, the amount shall be taken to be zero, notwithstanding any provision of the Benefits Act, the Administration Act or the Pension Schemes Act 1993[12].

    (6) In this paragraph, "incremental period" means any period of six days which are treated by the Social Security (Widow's Benefit and Retirement Pensions) Regulations 1979[13] as days of increment for the purposes of paragraph 2 of Schedule 5 in relation to the person and pension in question.

    (7) Where one or more orders have come into force under section 150 of the Administration Act during the period of deferment, the rate for any incremental period shall be determined as if the order or orders had come into force before the beginning of the period of deferment.

Lump sum where pensioner's entitlement is deferred
     5.  - (1) This paragraph applies where paragraph 2(1)(b) applies.

    (2) The person is entitled to an amount calculated in accordance with paragraph 6 (a "lump sum").

Calculation of lump sum
     6.  - (1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.

    (2) In this paragraph - 

"accrued amount" means the amount calculated in accordance with sub-paragraph (3);

"accrual period" means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to a person in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987[14], if his entitlement to a retirement pension had not been deferred, where that day falls within the period of deferment.

    (3) The accrued amount for an accrual period for a person is - 

A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period of deferment, zero);

P is, subject to sub-paragraph (5), the amount of graduated retirement benefit to which the person would have been entitled for the accrual period if his entitlement to a Category A or Category B retirement pension had not been deferred;

R is - 

(a) a percentage rate two per cent. higher than the Bank of England base rate; or

(b) if a higher rate is prescribed for the purposes of paragraphs 3B and 7B of Schedule 5, that higher rate.

    (4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect - 

(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect; or

(b) if regulations under paragraph 3B(4) of Schedule 5 so provide, at such other time as may be prescribed in those Regulations.

    (5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005[15] shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 3B of Schedule 5.

Increase or lump sum where pensioner's deceased spouse has deferred entitlement
     7.  - (1) This paragraph applies where - 

(a) a widow or widower ("W") is entitled to a Category A or Category B retirement pension;

(b) W was married to the other party to the marriage ("S") when S died;

(c) S's entitlement to a Category A or Category B retirement pension was deferred when S died; and

(d) S's entitlement had been deferred throughout the period of 12 months ending with the day before S's death.

    (2) Where W elects - 

(a) that paragraph 4 of Schedule 5 (increase of pension) is to apply in relation to the period of deferment, paragraph 8 of this Schedule shall also apply in relation to that period;

(b) that paragraph 7A of Schedule 5 (lump sum) is to apply in relation to the period of deferment, paragraph 9 of this Schedule shall also apply in relation to that period.

    (3) The reference to an election in sub-paragraph (2) includes an election W is treated as having made under paragraph 3C(3) of Schedule 5.

Increase where pensioner's deceased spouse has deferred entitlement
     8.  - (1) This paragraph applies where a widow or widower is entitled to a Category A or Category B retirement pension, was married to the other party to the marriage when S died and one of the following conditions is met - 

(a) S was entitled to graduated retirement benefit with an increase under this Schedule;

(b) paragraph 7(2)(a) applies; or

(c) paragraph 7 would apply to W but for the fact that the condition in sub-paragraph (1)(d) of that paragraph is not met.

    (2) The increase in the weekly rate of W's graduated retirement benefit shall, in a case to which sub-paragraph (1) applies, be determined in accordance with section 37 of the 1965 Act[16] as continued in force by virtue of regulations made under Schedule 3 to the Social Security (Consequential Provisions) Act 1975[17] or under Schedule 3 to the Social Security (Consequential Provisions) Act 1992[18].

Entitlement to lump sum where pensioner's deceased spouse has deferred entitlement
     9.  - (1) This paragraph applies where paragraph 7(2)(b) applies.

    (2) W is entitled to an amount calculated in accordance with paragraph 10 (a "widowed person's lump sum").

Calculation of widowed person's lump sum
     10.  - (1) The widowed person's lump sum is the accrued amount for the last accrual period beginning during the period which - 

(a) began at the beginning of S's period of deferment; and

(b) ended on the day before S's death.

    (2) In this paragraph - 

"S" means the other party to the marriage;

"accrued amount" means the amount calculated in accordance with sub-paragraph (3);

"accrual period" means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to S in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987[19], if his entitlement to a retirement pension had not been deferred, where that day falls within S's period of deferment.

    (3) The accrued amount for an accrual period for W is - 

A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period mentioned in sub-paragraph (1), zero);

P is, subject to sub-paragraph (5), one-half of the graduated retirement benefit to which S would have been entitled for the accrual period if his entitlement had not been deferred during the period mentioned in sub-paragraph (1);

R is - 

(a) a percentage rate two per cent. higher than the Bank of England base rate; or

(b) if a higher rate is prescribed for the purposes of paragraphs 3B and 7B of Schedule 5, that higher rate.

    (4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect - 

(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect; or

(b) if regulations under paragraph 7B(4) of Schedule 5 so provide, at such other time as may be prescribed.

    (5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005[20] shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 7B of Schedule 5.

    (6) In any case where - 

(a) there is a period between the death of S and the date on which W becomes entitled to a Category A or Category B retirement pension; and

(b) one or more orders have come into force under section 150 of the Administration Act during that period,

the amount of the lump sum shall be increased in accordance with that order or those orders.

(a) paragraph 13; or

(b) paragraph 15,

is to apply in respect of that period.

    (2) The election referred to in sub-paragraph (1) shall be made - 

(a) on the date on which he claims graduated retirement benefit; or

(b) within the period prescribed in regulations under paragraph A1(1) of Schedule 5.

    (3) If no election under sub-paragraph (1) is made within the period referred to in sub-paragraph (2)(b), the person is to be treated as having made an election under sub-paragraph (1)(b).

    (4) A person who has made an election under sub-paragraph (1) (including one that the person is treated by sub-paragraph (3) as having made) may change the election in the circumstances and within the time specified in regulations made under paragraph A1(4) of Schedule 5.

Increase
     13.  - (1) This paragraph applies where - 

(a) the period of deferment is less than 12 months; or

(b) the person has made an election under paragraph 12(1)(a) in respect of the period of deferment.

    (2) The rate of the person's graduated retirement benefit shall be increased by an amount equal to the aggregate of the increments to which he is entitled under paragraph 14 but only if that amount is enough to increase the rate of the benefit by at least one per cent.

Calculation of increment
     14.  - (1) A person is entitled to an increment under this paragraph for each complete incremental period in the period of deferment.

    (2) The amount of the increment for an incremental period shall be 1/5th per cent. of the weekly rate of the graduated retirement benefit to which the person would have been entitled for the period if his entitlement to graduated retirement benefit had not been deferred.

    (3) For the purposes of sub-paragraph (2), the weekly rate of graduated retirement benefit shall be taken to include any increase in the weekly rate of that benefit and the amount of the increment in respect of such an increase shall be 1/5th per cent. of its weekly rate for each incremental period in the period of deferment beginning on the day the increase occurred.

    (4) Amounts under sub-paragraphs (2) and (3) shall be rounded to the nearest penny, taking any ½p as nearest to the next whole penny.

    (5) Where an amount under sub-paragraph (2) or (3) would, apart from this sub-paragraph, be a sum less than ½p, the amount shall be taken to be zero, notwithstanding any provision of the Benefits Act, the Administration Act or the Pension Schemes Act 1993[22].

    (6) Where one or more orders have come into force under section 150 of the Administration Act during the period of deferment, the rate for any incremental period shall be determined as if the order or orders had come into force before the beginning of the period of deferment.

Lump sum
     15.  - (1) This paragraph applies where paragraph 12(1)(b) applies.

    (2) The person is entitled to an amount calculated in accordance with paragraph 16 (a "lump sum").

Calculation of lump sum
     16.  - (1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.

    (2) In this paragraph - 

"accrued amount" means the amount calculated in accordance with sub-paragraph (3);

"accrual period" means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to a person in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987[23], if he had been entitled to it, where that day falls within the period of deferment.

    (3) The accrued amount for an accrual period for a person is - 

A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period of deferment, zero);

P is, subject to sub-paragraph (5), the amount of graduated retirement benefit to which the person would have been entitled for the accrual period if he had been entitled to it;

R is - 

(a) a percentage rate two per cent. higher than the Bank of England base rate; or

(b) if a higher rate is prescribed for the purposes of paragraphs 3B and 7B of Schedule 5, that higher rate.

    (4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect - 

(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect; or

(b) if regulations under paragraph 3B(4) of Schedule 5 so provide, at such other time as may be prescribed in those Regulations.

    (5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005[24] shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 3B of Schedule 5.

Choice between increase and lump sum where person's deceased spouse has deferred entitlement to graduated retirement benefit
     17.  - (1) This paragraph applies where - 

(a) a widow or widower ("W") is entitled to a Category A or Category B retirement pension;

(b) W was married to the other party to the marriage ("S") when S died;

(c) S's entitlement to graduated retirement benefit was deferred when S died; and

(d) S's entitlement had been deferred throughout the period of 12 months ending with the day before S's death.

    (2) W shall elect either that - 

(a) paragraph 18; or

(b) paragraph 19,

is to apply in respect of S's period of deferment.

    (3) The election referred to in sub-paragraph (2) shall be made - 

(a) on the date W claims her Category A or Category B retirement pension; or

(b) within the period prescribed in regulations under paragraph A1(1) of Schedule 5.

    (4) If no election under sub-paragraph (2) is made within the period referred to in sub-paragraph (3)(b), the person is to be treated as having made an election under sub-paragraph (2)(b).

    (5) A person who has made an election under sub-paragraph (1) (including one that the person is treated by sub-paragraph (3) as having made) may change the election in the circumstances and within the time specified in regulations made under paragraph A1(4) of Schedule 5.

Increase where person's deceased spouse has deferred entitlement to graduated retirement benefit
     18.  - (1) This paragraph applies where a widow or widower is entitled to graduated retirement benefit, was married to the other party to the marriage when S died and one of the following conditions is met - 

(a) S was entitled to graduated retirement benefit with an increase under this Schedule;

(b) W is a widow or widower to whom paragraph 17 applies and has made an election under paragraph 17(2)(a); or

(c) paragraph 17 would apply to W but for the fact that the condition in sub-paragraph (1)(d) of that paragraph is not met.

    (2) The increase in the weekly rate of W's graduated retirement benefit shall, in a case to which sub-paragraph (1) applies, be determined in accordance with section 37 of the 1965 Act as continued in force by virtue of regulations made under Schedule 3 to the Social Security (Consequential Provisions) Act 1975[25] or under Schedule 3 to the Social Security (Consequential Provisions) Act 1992[26].

Entitlement to lump sum where person's deceased spouse has deferred entitlement to graduated retirement benefit
     19.  - (1) This paragraph applies where paragraph 17(2)(b) applies.

    (2) W is entitled to an amount calculated in accordance with paragraph 20 (a "widowed person's lump sum").

Calculation of widowed person's lump sum
     20.  - (1) The widowed person's lump sum is the accrued amount for last accrual period beginning during the period which - 

(a) began at the beginning of S's period of deferment; and

(b) ended on the day before S's death.

    (2) In this paragraph - 

"S" means the other party to the marriage;

"accrued amount" means the amount calculated in accordance with sub-paragraph (3);

"accrual period" means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to S in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987, if he had been entitled to it, where that day falls within S's period of deferment.

    (3) The accrued amount for an accrual period for W is - 

A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period mentioned in sub-paragraph (1), zero);

P is, subject to sub-paragraph (5), one-half of the graduated retirement benefit to which S would have been entitled for the accrual period if he had been entitled to it during the period mentioned in sub-paragraph (1);

R is - 

          (a) a percentage rate two per cent. higher than the Bank of England base rate; or


(b) if a higher rate is prescribed for the purposes of paragraphs 3B and 7B of Schedule 5, that higher rate.



    (4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect - 



(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect; or

(b) if regulations under paragraph 7B(4) of Schedule 5 so provide, at such other time as may be prescribed.



    (5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005[27] shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 7B of Schedule 5.

    (6) In any case where - 



(a) there is a period between the death of S and the date on which W becomes entitled to graduated retirement benefit; and

(b) one or more orders have come into force under section 150 of the Administration Act during that period,



the amount of the lump sum shall be increased in accordance with that order or those orders.





PART 3
SUPPLEMENTARY
Supplementary
     21. Any lump sum calculated under paragraph 6, 10, 16 or 20 must be rounded to the nearest penny, taking any ½p as nearest to the next whole penny above.



SCHEDULE 2Regulation 5


MODIFICATION OF SCHEDULE 1

     1. In paragraph 2(1), for paragraph (b) there shall be substituted the following paragraph - 


" (b) that paragraph 1 of Schedule 5 is to apply in relation to so much of the period of deferment which falls before the first day of the first accrual period (as defined by paragraph 3B(2) of that Schedule) beginning on or after 6th April 2005 ("the first part") and that paragraph 3A of that Schedule is to apply in relation to the remainder of the period of deferment ("the second part"), paragraph 3 of this Schedule shall apply in relation to the first part and paragraph 5 of this Schedule shall apply in relation to the second part.".



     2. In paragraph 3(2), for the words from "that amount" to the end of the sub-paragraph, there shall be substituted - 



"  - 
(a) there are at least 7 incremental periods in the period of deferment;

(b) there are at least 5 incremental periods in the period of deferment and the amount of the increment for at least one of those periods is calculated in accordance with paragraph 4(2); or

(c) paragraph 2(1)(b) applies and there is at least one incremental period before the first day of the first accrual period.".



     3. At the end of paragraph 6(1), there shall be added the words "or, if greater, the amount equal to the total amount of graduated retirement benefit which would have been payable to the person during the period of 12 months ending with the last day of the period of deferment if his entitlement had not been deferred".

     4. In paragraph 7 - 



(a) at the end of sub-paragraph (1)(d), there shall be added the words "and throughout the period of 12 months falling after 5th April 2005";

(b) for sub-paragraph (2)(b) there shall be substituted the following sub-paragraph - 


" (b) that paragraph 4 of Schedule 5 is to apply in relation to so much of S's period of deferment which falls before the first day of the first accrual period (as defined by paragraph 7B(2) of that Schedule) beginning on or after 6th April 2005 ("the first part") and that paragraph 7A of that Schedule is to apply in relation to the remainder of the period of deferment ("the second part"), paragraph 8 of this Schedule shall apply in relation to the first part and paragraph 9 of this Schedule shall apply in relation to the second part.".



     5. At the end of paragraph 10(1), there shall be added the words "or, if greater, the amount equal to the total amount of graduated retirement benefit which would have been payable to S during the period of 12 months ending with the day before his death if his entitlement had not been deferred".

     6. In paragraph 12(1) - 



(a) after the words "12 months" there shall be inserted the words "and at least 12 months of that period falls after 5th April 2005";

(b) for sub-paragraph (b), there shall be substituted the following sub-paragraph - 


" (b) that paragraph 13 is to apply in relation to so much of the period of deferment which falls before the first day of the first accrual period (as defined in paragraph 16(2)) for the purposes of paragraph 15 and that paragraph 14 is to apply in relation to the remainder of the period of deferment.".



     7. In paragraph 13(2), for the words from "that amount" to the end of the sub-paragraph, there shall be substituted - 



"  - 
(a) there are at least 7 incremental periods in the period of deferment;

(b) there are at least 5 incremental periods in the period of deferment and the amount of the increment for at least one of those periods is calculated in accordance with paragraph 14(2); or

(c) the person has made (or is treated as having made) an election under paragraph 12(1)(b) and there is at least one incremental period before the first day of the first accrual period.".



     8. At the end of paragraph 16(1), there shall be added the words "or, if greater, the amount equal to the total amount of graduated retirement benefit to which the person would have been entitled for the period of 12 months ending with the last day of the period of deferment if his entitlement had not been deferred".

     9. In paragraph 17 - 



(a) at the end of sub-paragraph (1)(d), there shall be added the words "and throughout the period of 12 months falling after 5th April 2005";

(b) for sub-paragraph (2)(b), there shall be substituted the following paragraph - 


" (b) that paragraph 18 is to apply in relation to so much of S's period of deferment which falls before the first day of the first accrual period (as defined in paragraph 20(2)) for the purposes of paragraph 19 and that paragraph 19 is to apply in relation to the remainder of that period of deferment.".



     10. At the end of paragraph 20(1), there shall be added the words "or, if greater, the amount equal to the total amount of graduated retirement benefit which would have been payable to S during the period of 12 months ending with the day before his death if his entitlement had not been deferred".




---

EXPLANATORY NOTE

(This note is not part of these Regulations)

These Regulations make provision relating to the deferment of graduated retirement benefit arising from changes in the rules relating to the deferment of retirement pension made by the Pensions Acts 1995 (c. 26) and 2004 (c. 35) ("the 2004 Act").

Regulations 2 to 4 and Schedule 1 repeal and re-enact the existing rules relating to increments of graduated retirement benefit where entitlement to either retirement pension or to graduated retirement benefit alone is deferred, so that they correspond with the rules for deferment of entitlement to retirement pension enacted in Schedule 5 to the Social Security Contributions and Benefits Act 1992 (c. 4) as amended by Schedule 11 to the 2004 Act.

The two changes introduced by Schedule 1 are an increase in the incremental rate from 1/7th per cent. to 1/5th per cent. and the introduction of a new reward of a lump sum, both for those who have deferred entitlement to their graduated retirement benefit for at least 12 months and for widows and widowers where their deceased spouses deferred entitlement to their graduated retirement benefit for at least 12 months as at the date of death. Those who also had deferred entitlement to retirement pension for at least 12 months can only get the same reward for graduated retirement benefit as they elected to receive for their retirement pension, otherwise, an election can be made. The election is to be made in the manner and within the time specified in regulations made under powers introduced by the 2004 Act. The lump sum is to be calculated on the basis of the amount of graduated retirement benefit foregone in the period of deferment with interest accrued on it at a rate 2% above the Bank of England base rate.

Regulation 1(2) provides that the increase in the incremental rate is to not to take effect in relation to incremental periods beginning before 6th April 2005.

Regulation 5 and Schedule 2 modify Schedule 1 in so far as it applies to cases where a person was deferring his graduated retirement benefit before 6th April 2005 and continued deferring it on or after that date.

A full Regulatory Impact Assessment has not been produced for this Instrument as it has no impact on the costs of business.



---

Notes:

[1] 1992 c. 4. Section 62(1) was amended by section 131(1) of, and paragraph 7 of Schedule 4 to, the Pensions Act 1995 (c. 26) and by section 297 of, and paragraph 17 of Schedule 11 to, the Pensions Act 2004 (c. 35).back

[2] See sections 170 and 173(1)(b) of the Social Security Administration Act 1992 (c. 5).back

[3] 2004 c. 35.back

[4] See section 173(5)(a) of the Social Security Administration Act 1992.back

[5] 1965 c. 51. Section 36 was repealed by the Social Security Act 1973 (c. 38) with effect from 6th April 1975 but continues in force by virtue of regulations made under Schedule 3 to the Social Security (Consequential Provisions) Act 1975 (c. 18) or under Schedule 3 to the Social Security (Consequential Provisions) Act 1992 (c. 6).back

[6] 1992 c. 5.back

[7] Schedule 5 was amended by the Pensions Acts 1995 and 2004.back

[8] S.I.1978/393; the relevant amending instrument is S.I.1989/1642.back

[9] Section 55 was substituted by the Pensions Act 2004, section 297(1).back

[10] S.I.2005/454.back

[11] 1965 c. 51.back

[12] 1993 c. 48.back

[13] S.I.1979/642; the relevant amending instruments are S.I.1989/1642, 1991/2742, 1992/1695, 1996/1345 and 1999/2422.back

[14] S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.back

[15] S.I.2005/453.back

[16] 1965 c. 51.back

[17] 1975 c. 18.back

[18] 1992 c. 6.back

[19] S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.back

[20] S.I.2005/453.back

[21] 1965 c. 51.back

[22] 1993 c. 48.back

[23] S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.back

[24] S.I.2005/453.back

[25] 1975 c. 18.back

[26] 1992 c. 6.back

[27] S.I.2005/453.back

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ISBN 0 11 072373 2


 © Crown copyright 2005

Prepared 10 March 2005