The Railways Pension Scheme Order 1994

Pension Increases

18A  Every time official pensions referred to in the Pensions (Increase) Act 1971(1) are increased under that Act each pension in payment shall increase by the same proportion as an official pension which began for the purposes of section 8(2) of the Pensions (Increase) Act 1971 on whichever is the earlier of the date the Member left Service or the date the Member attained age 65.

The pension increase for a Member who has retired and has attained 65 years of age shall be calculated as if the pension had been reduced by the annual equivalent of the GMP since the date of attaining 65 years of age.

The pension increase for an Eligible Spouse or for an Eligible Dependant or Eligible Dependants shall be calculated as if the pension (or total pensions if there are more than one Eligible Dependant) had been reduced by half the annual equivalent of the Member’s GMP at whichever was the earlier of (a) the date the Member died and (b) the date the Member attained State Pension Age.

Where GMP is payable (whether to a Member who has retired, an Eligible Spouse or Legal Spouse), the part of the GMP that is attributable to earnings for the tax year 1988—89 and subsequent tax years shall be increased in each year by the percentage specified in any order made by the Secretary of State under section 109 of the Pensions Act (which is approximately equal to the percentage rise in the cost of living in each year, with a maximum of 3% per year compound).

(1)

1971 c. 56.