PENSIONS Citation and commencement 1 1 This Order may be cited as the Pensions Increase (Review) Order 2005 and shall come into force on 11th April 2005. 2 This Order and the existing Orders may be cited together as the Pensions Increase (Review) Orders 1972 to 2005. Interpretation 2 1 In this Order— “the 1971 Act ” means the Pensions (Increase) Act 1971 ; “the 1974 Act ” means the Pensions (Increase) Act 1974 ; “the 1975 Act ” means the Social Security Pensions Act 1975; “basic rate” and “derivative pension” have the meanings given by section 17(1) of the 1971 Act ; “the existing Orders” means the Pensions Increase (Annual Review) Order 1972 , the Pensions Increase (Annual Review) Order 1973 , the Pensions Increase (Annual Review) Order 1974 , the Pensions Increase (Annual Review) Order 1975 , the Pensions Increase (Annual Review) Order 1976 , the Pensions Increase (Annual Review) Order 1977 , the Pensions Increase (Annual Review) Order 1978 , the Pensions Increase (Review) Order 1979 , the Pensions Increase (Review) Order 1980 , the Pensions Increase (Review) Order 1981 , the Pensions Increase (Review) Order 1982 , the Pensions Increase (Review) Order 1983 , the Pensions Increase (Review) Order 1984 , the Pensions Increase (Review) Order 1985 , the Pensions Increase (Review) Order 1986 , the Pensions Increase (Review) Order 1987 , the Pensions Increase (Review) Order 1988 , the Pensions Increase (Review) Order 1989 , the Pensions Increase (Review) Order 1990 , the Pensions Increase (Review) Order 1991 , the Pensions Increase (Review) Order 1992 , the Pensions Increase (Review) Order 1993 , the Pensions Increase (Review) Order 1994 , the Pensions Increase (Review) Order 1995 , the Pensions Increase (Review) Order 1996 , the Pensions Increase (Review) Order 1997 , the Pensions Increase (Review) Order 1998 , the Pensions Increase (Review) Order 1999 , the Pensions Increase (Review) Order 2000 , the Pensions Increase (Review) Order 2001 , the Pensions Increase (Review) Order 2002 , the Pensions Increase (Review) Order 2003 and the Pensions Increase (Review) Order 2004 ; “official pension” has the meaning given by section 5(1) of the 1971 Act ; “pension authority” has the meaning given by section 7(1) of the 1971 Act; “qualifying condition” means one of the conditions laid down in section 3 of the 1971 Act ; “relevant injury pension”, “substituted pension” and “widow’s pension” have the meanings given by section 17(1) of the 1971 Act. 2 For the purposes of this Order the time when a pension “begins” is that stated in section 8(2) of the 1971 Act , and the “beginning date” shall be construed accordingly. 3 Where, for the purposes of this Order, it is necessary to calculate the number of complete months in any period an incomplete month shall be treated as a complete month if it consists of at least 16 days. Pension increases 3 The annual rate of an official pension may, if a qualifying condition is satisfied or the pension is a derivative or substituted pension or a relevant injury pension, be increased by the pension authority in respect of any period on or after 11th April 2005 as follows— 1 a pension beginning before 12th April 2004 may be increased by 3.1 per cent of the basic rate as increased by the amount of any increase under section 1 of the 1971 Act or the existing Orders; 2 a pension beginning on or after 12th April 2004 and before 11th April 2005 may be increased by 3.1 per cent multiplied by A B where a A is the number of complete months in the period between the beginning date of the pension and 11th April 2005; and b B is 12. Increases in certain lump sums 4 In respect of any lump sum or instalment of a lump sum which became payable before 11th April 2005 but on or after 12th April 2004 there may be paid an increase of 3.1 per cent of the amount of the lump sum or instalment (as increased by the amount under section 1 of the 1971 Act or under the existing Orders) multiplied by A B where a A is the number of complete months in the period between the beginning date for the lump sum or, if later, 12th April 2004 and the date on which it became payable; and b B is 12. Reductions in respect of guaranteed minimum pensions 5 The amount by reference to which any increase in the rate of an official pension provided for by this Order is to be calculated shall, in the case of a person— a who is entitled to a guaranteed minimum pension on 11th April 2005; and b whose entitlement to that guaranteed minimum pension arises from an employment from which (either directly or by virtue of the payment of a transfer credit) entitlement to the official pension also arises, be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury otherwise direct, in accordance with the provisions of section 59A of the 1975 Act. 6 The amount by reference to which any increase in the rate of a widow’s or widower’s pension provided for by this Order is to be calculated shall, where the pensioner becomes entitled on the death of the deceased spouse to a guaranteed minimum pension, be reduced in accordance with section 59(5ZA) of the 1975 Act. John Heppell Nick Ainger Two of the Lords Commissioners of Her Majesty’s Treasury 21st March 2005