The amount of pension paid to a scheme
member cannot normally reduce from one year to the
next, with a few exceptions. One of these exceptions is that if an
employee is receiving a scheme pension on the grounds of ill
health. The tax rules allow such a pension to be reduced or even
stopped at any time. After such a change it may later recommence or
increase back to the earlier rate or to some intermediate amount.
Usually scheme rules will take advantage of such a facility only in
order to provide a level of pension appropriate to the
member’s capacity to carry out their occupation. Whether the
scheme’s provisions do this, and to what extent will depend
on the rules of the particular scheme.
Scheme rules can, of course, contain more stringent
conditions that an employee must meet before being able to draw a
pension on ill-health grounds in the first place. For example, they
could state that the member should be incapable of carrying out any
occupation. It is entirely up to those setting up the scheme what
they provide, within the parameters set out in
RPSM08400060.
Such a recommenced pension would not be treated as a BCE2,
provided that there had been no further benefit accrual in respect
of any period of re-employment.
| Glossary RPSM20000000 |
