RPSM03106065 - Technical Pages: Protecting pension rights from tax charges: Taking benefits before normal minimum pension age:

Loss of protection due to employment after taking benefits between age 50 to 54: employment conditions

Where after becoming entitled to benefits after 5 April 2010 between the ages of 50 and 54 (inclusive) the individual is employed by an employer shown in RPSM03106064 the individual must meet one of the following re-employment conditions.

Once the individual reaches the normal minimum pension age of 55 these restrictions cease to apply.

Recall by the Armed Forces

An individual will not lose their protected pension age where that individual became entitled to benefits from the Armed Forces Pension Scheme after age 49 and is later subject to a compulsory re-call. A compulsory recall is defined as permanent service

• under Part 4 or Part 5 of the Reserve Forces Act 1996,
• under a recall or call-out order made under the Reserve Forces Act 1996
• having been called out or recalled under the Reserve Forces Act 1980, or
• because of any other call-out or recall obligation on an officer.

A break in employment of at least six months

If the individual is not employed by any of the employers mentioned in RPSM03106064 within the six months after becoming entitled to benefits the individual will not lose their protected pension age.

A break in employment of at least one month and benefits may be abated

An individual taking benefits from a public service pension scheme who, after one month following becoming entitled to benefits, becomes employed by any of the employers mentioned in RPSM03106064 will not lose their protected pension age if their scheme pension is liable to be reduced by abatement. The pension does not have to be actually reduced, just liable to abatement. For example Judy takes benefits from public service scheme X. After 1 month Judy returns to work for employer X but for reduced hours. Judy’s pension and new pay level are tested by the scheme to see if her pension should be abated. Judy’s pension does not need to be reduced, but because it was tested for abatement and could have been reduced Judy keeps her protected pension age for the benefits in payment.

A break in employment of at least one month and the employment is materially different

An individual who after one month following becoming entitled to benefits, becomes employed by any of the employers mentioned in the 3 bullet points on RPSM03106064 will not lose their protected pension age if the new employment is materially different. A simple change in hours will not be a materially different employment. To be a materially different employment the duties and/or the level of responsibility in the new employment must be different from the old employment.

This condition no longer needs to be met six months following the individual becoming entitled to benefits.