The following section is inserted after section 56 of the Principal Act:

"Indexation of pensions when in payment.

56A.

(1) In this section 'indexation', in relation to a pension, means the provision of an increase, in each successive year of the period during which the pension is paid, of the amount of the pension, each such increase that is so provided being equal to a percentage of the amount of the pension in payment at the time the increase falls to be made, being a percentage at least equal to the lower of -

(a) the percentage increase in the general level of consumer prices during a period of twelve months ending at any time within twelve months before the increase of the amount of pension falls to be made, determined by the trustees in such manner as they think appropriate, and

(b) four per cent.

(2) This section applies to a scheme to which section 56(1) (b) applies, the rules of which do not require either -

(a) indexation of pensions, or

(b) the provision of an increase, in each successive year of the period during which each pension thereunder is paid, of the amount of the pension, each such increase that is specified in the scheme being not less than 3 per cent of the amount of the pension in payment at the time the increase falls to be made.