In order to protect the pension position of individuals who leave their pension schemes before state pension age, the Pension Schemes Act 1993 requires schemes to revalue Guaranteed Minimum Pension (GMP) rights in line with certain prescribed percentages to keep pace with inflation. The provisions governing one particular method of revaluation, known as fixed rate revaluation, do not allow a GMP to be revalued after April 1997.
This paragraph removes that restriction. It provides for a Guaranteed Minimum Pension to be revalued by the prescribed percentage for each year in the period between the earner’s leaving the scheme and reaching state pension age (currently 65 for men and 60 for women).
Commentary on Sections Northern Ireland stakeholder pension scheme legislation Schedule 2: Miscellaneous amendments Paragraph 4 : Revaluation of earnings factors: meaning of “relevant year”