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United Kingdom Statutory Instruments


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STATUTORY INSTRUMENTS


2005 No. 454

SOCIAL SECURITY

The Social Security (Graduated Retirement Benefit) Regulations 2005

  Made 3rd March 2005 
  Laid before Parliament 10th March 2005 
  Coming into force 6th April 2005 

The Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 62(1)(a) and (c) and 175(3) and (4) of the Social Security Contributions and Benefits Act 1992[1], and of all other powers enabling him in that behalf, after agreement by the Social Security Advisory Committee that proposals in respect of regulations 3 and 4, and paragraphs 2, 3, 7, 13, 14 and 18 of Schedule 1 in so far as they apply to regulation 4, should not be referred to it[2], the remainder of this Instrument containing only regulations made under provisions introduced by section 297 of, and Schedule 11 to, the Pensions Act 2004[3] and being made before the end of the period of 6 months beginning with the coming into force of those provisions[4], hereby makes the following Regulations:

Citation, commencement, effect and interpretation
     1.  - (1) These Regulations may be cited as the Social Security (Graduated Retirement Benefit) Regulations 2005 and shall come into force on 6th April 2005.

    (2) Regulation 4 and paragraphs 3(2) and (3) and 13(2) and (3) of Schedule 1 in so far as they apply to that regulation, shall not have effect in relation to incremental periods beginning before 6th April 2005.

    (3) In these Regulations - 

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) - 

    (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 - 

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 - 

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



SCHEDULE 1
Regulation 4


FURTHER PROVISIONS REPLACING SECTION 36(4) OF THE NATIONAL INSURANCE ACT 1965: INCREASES OF GRADUATED RETIREMENT BENEFIT AND LUMP SUMS




PART 1

INCREASE AND LUMP SUM WHERE ENTITLEMENT TO RETIREMENT PENSION IS DEFERRED

Scope
     1. This Part applies only in respect of a person who is deferring entitlement to graduated retirement benefit by virtue of section 36(4A)(a) of the 1965 Act[
11].

Increase or lump sum where pensioner's entitlement is deferred
     2.  - (1) Where a person's entitlement to a Category A or Category B retirement pension is deferred and that person elects, on claiming his pension either - 

    (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 - 

    (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 - 

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

(A + P) ×52(1 +
R)

100
where - 

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

    (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 - 

    (2) Where W elects - 

    (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 - 

    (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 - 

    (2) In this paragraph - 

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

(A + P) ×52(1 +
R)

100
where - 

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

    (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 - 

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



PART 2

INCREASE OR LUMP SUM WHERE PERSON IS TREATED AS RECEIVING RETIREMENT PENSION AT A NOMINAL WEEKLY RATE

Scope
     11. This Part applies only in respect of a person who is deferring entitlement to graduated retirement benefit by virtue of section 36(4A)(b) of the 1965 Act[
21].

Choice between increase and lump sum
     12.  - (1) Where the period of deferment is at least 12 months, a person shall, on becoming entitled to graduated retirement benefit, elect that - 

is to apply in respect of that period.

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

    (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 - 

    (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 - 

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

(A + P) ×52(1 +
R)

100
where - 

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

    (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 - 

    (2) W shall elect either that - 

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

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

    (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 - 

    (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 - 

    (2) In this paragraph - 

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

(A + P) ×52(1 +
R)

100
where - 


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URL: http://www.bailii.org/uk/legis/num_reg/2005/20050454.html