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The judicial pension schemes are mainly governed by the Judicial Pensions Act 1981 and the Judicial Pensions Act 1993.
I have concluded that, as administrator of the judicial pension schemes, it would be in the best interests of the members that, for the future, the schemes should not be registered schemes for the purposes of the Finance Act 2004.
The principal effect will be that lump sum benefits payable from, and members contributions payable to, the schemes will cease to attract tax relief from 6 April 2006. Income tax will, of course, also continue to be payable on pension benefits. Judicial pension benefits will consequentially not be taken into account for the purposes of the registered pension schemes provisions of the Finance Act 2004 as they will not receive the preferential tax treatment afforded to such schemes.
I also propose to make provision for judges to receive a long service award which will become payable when they near retirement. The level of the award, which will be a proportion of the lump sum, will reflect their years of service and their judicial grade and will ensure their net position is maintained. I will amend judicial terms and conditions to reflect this proposal.
There will be an adjustment to the rate of contributions for dependants' benefits and certain technical changes to the schemes needed to reflect the terms of the Finance Act will be made under powers contained in that Act.
I am satisfied that these proposals are in accordance with the terms of the Finance Act 2004. They serve to maintain but not improve the overall remuneration package for the serving judiciary and to protect the principle of judicial independence in so doing. There will be no net cost to the Exchequer. In these circumstances, it is not necessary for me to introduce separate legislation for judicial pensions and I do not therefore propose to proceed with the Bill which was announced in May this year.