§ Ms StuartTo ask the Secretary of State for Social Security what estimate she has made of the number of pensioners who received increased awards from their occupational pension scheme after the point of retirement. [52380]
§ Mr. DenhamInformation is not available to be able to make an estimate in the precise form requested. Such information as is available is as follows.
187WAll occupational pension benefits accrued after 6 April 1997, except those deriving from the payment of additional voluntary contributions, must be indexed in line with the Retail Prices Index (RPI), with indexation being capped at 5 per cent. Before that date, the only indexation requirement applied to pensions accrued as a result of contracting-out of the State Earnings Related Pension Scheme (SERPS) after 5 April 1988. Such pensions had to be indexed in line with RPI, capped at 3 per cent.
However, from 5 April 1978, full indexation was effectively provided within SERPS itself for those who had contracted-out. From 5 April 1988 to 5 April 1997, SERPS provided indexation of the balance above 3 per cent, where the RPI rose above this level.
Numbers of people in the UK entitled under the rules of their scheme to various levels of indexation of pension benefits in payment through private and public sector defined benefit occupational pension schemes million Indexation Private sector Public Sector With RP1 0.5 2.8 With RPI up to a maximum of 5 per cent. 1.2 0.1 Other indexation 1.1 0.3 None 0.6 nil Total 3.4 3.2 Notes:
1. All figures are in millions and have been rounded to the nearest 0.1 million
2. The statistics refer to rights accorded to members and beneficiaries through the scheme rules. However, schemes may choose to award more generous increases on a discretionary basis
3. The indexation levels quoted in the table may be applied by the providers to the whole pension benefit an individual receives or only to pension benefits received which have been accrued in excess of any Guaranteed Minimum Pension (GMP) component. However, if the indexation level is applied to the whole pension, then it must be sufficient to cover any increase in GMP to which a pensioner may be entitled
4. No information is available on indexation arrangements for pension benefits in payment accrued through defined contribution occupational pension schemes, which are converted into annuities
Source:
1991 Government Actuary's Department Survey of Occupational Pension Schemes