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 a
member 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 return to work. Whether the scheme’s provisions
do this, and to what extent will depend on the specific rules of
the particular scheme.
Scheme rules can, of course, contain more stringent
conditions that a member 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
RPSM08300080.
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 see
RPSM11104460.
| Glossary RPSM20000000 |
