Revaluation of Preserved Benefit for 2017

The Department of Social Protection today (28th March 2017) announced that, in accordance with Section 33 of the Pensions Act 1990 (as amended), there shall be no revaluation of preserved pension benefits for 2016.

A person who leaves employment, and who has been a member of their former employers defined benefit pension scheme, may choose to either leave their accrued pension rights in the scheme of their former employer or transfer their rights to another pension vehicle which can accrue pension rights. Where the person chooses to leave their pension rights in the scheme of their former employer, pensions legislation safeguards those rights and ensures their pension value is ‘preserved’ and revalued annually to keep pace with changes in the annual rate of Consumer Price Inflation. This maintains the spending power of these pension entitlements to a reasonable level.

The revaluation rate is generally set out in an annual Regulation unless there is no change in the general level of consumer prices, in which case there is no revaluation of preserved benefit.

Note for Editors

Section 33 of the Pensions Act, 1990 (as amended) provides that the Minister, after consultation with the Minister for Public Expenditure and Reform, shall, in respect of each revaluation year, make Regulations specifying the percentage which will determine the amount by which preserved pension benefit is to be increased in that year.

Section 33 provides that the increase shall be the lesser of the percentage that equals the increase in the general level of consumer prices during that year, calculated by the Minister as he sees fit, or 4%.

Accordingly, as the average annual Consumer Price Index increase for the year 2016 was 0.0% (as per the Central Statistics Office in its January bulletin), there will be no revaluation of preserved pension benefit for 2016.

ENDS