British pensioners get certain rights regarding contracted-out, salary-related (COSR) pension schemes. After April 5, 1997, these rights have been referred to as 9(2B) rights, named after Section 9(2B) of the Pension Schemes Act of 1993.
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Prior to April 5, 1997, any pension that was "contracted-out" was guaranteed a minimum amount, whether it be related to a person's salary near their retirement age, also known as "salary-related" schemes, or those that paid the pensioner what they paid into a system, also known as "money-purchase" schemes.
After Section 9(2B) came into place on April 5, 1997, guaranteed minimum pensions only applied to COSR pension schemes and necessitated certain requirements to be implemented, known as the Reference Schemes Test. These requirements are detailed throughout other sections of the Pension Schemes Act of 1993.
The Main Requirements of 9(2B)
The main Section 9(2B) requirements include leaving 50% of any pension for a surviving widow, widower or civil partner and must increase in payment each year up to a maximum of 2.5% of the Retail Price Index.
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