Pension Schemes Act 1993

64 Actuarial tables for purposes of calculations relating to premiums

(1) In calculating and certifying the costs mentioned in subsections (1), (2) and (6) of section 58 and the cost of providing the appropriate percentage of the guaranteed minimum pension for the purposes of section 60 the Secretary of State shall apply whichever of the prescribed actuarial tables (as in force at the appropriate time) is applicable in accordance with the regulations prescribing the tables, but for the purpose of calculating the amount of a transfer premium the Secretary of State shall apply the actuarial table prescribed for the purpose of calculating the amount of an accrued rights premium in such manner as may be prescribed.

(2) In subsection (1) “the appropriate time” means the time when the scheme ceases to be contracted-out or, as the case may be, to be appropriate or, in the case of costs mentioned in section 58(6), the time when the earner’s service in contracted-out employment is terminated.

(3) The tables—

(a) shall embody whatever appears to the Secretary of State to be the best practical estimate of the average cost, expressed in actuarial terms and relative to a given period, of providing guaranteed minimum pensions for the purposes of the calculations required by section 58(1), (2), (5) or (6) or section 60(7), as the case may be; and

(b) shall assume for any period an average yield on investments which is not less than the average increase during that period in the general level of earnings obtaining in Great Britain,

but the regulations may provide for them to be adjusted according to whatever is from time to time the actual yield on prescribed investments or the average yield, as shown in prescribed published indices, on prescribed classes of investments.

(4) The tables to be used in calculating the costs referred to in section 58(6) shall be so framed as to embody the assumption that the increase of weekly equivalent required by section 16(3) is 5 per cent. compound for each relevant year after that in which the earner’s service is terminated; and that assumption shall prevail over any different provision made by the scheme.

(5) Regulations prescribing tables for the purposes of this section—

(a) shall be made only after consultation with the Government Actuary or the Deputy Government Actuary; and

(b) shall not be made unless a draft of them has been laid before Parliament and approved by a resolution of each House.

(6) The Secretary of State may from time to time, and shall when required by subsection (7), lay before each House of Parliament—

(a) a report by the Government Actuary or the Deputy Government Actuary on any changes since the preparation of the last such report in the factors affecting any of the actuarial tables prescribed for the purposes of any of the provisions to which this section applies (including changes affecting adjustments under the regulations); and

(b) a report by the Secretary of State stating whether he considers that the regulations ought to be altered in view of the report by the Government Actuary or Deputy Government Actuary and, if so, what alterations he proposes.

(7) The Secretary of State shall lay reports under this section at intervals of not more than five years.

(8) If in a report under this section the Secretary of State proposes alterations in the regulations, he shall prepare and lay before each House of Parliament with the report draft regulations which give effect to the alterations and are to be in force—

(a) from the beginning of such tax year as may be specified in the regulations (not being earlier than the second tax year after that in which the regulations are made); or

(b) where it appears to him to be expedient for reasons of urgency, an earlier date (not being earlier than the date on which the regulations are made).

(9) If the draft regulations are approved by resolution of each House, the Secretary of State shall make the regulations in the form of the draft.