Marion is a member of a
defined benefits scheme. By the time she reaches
her normal retirement date under the scheme (60) she is entitled to
a pension for life of £15,000 per annum.
Marion does not wish to retire but wants to continue working
for the company in a reduced capacity. As such she does not want to
draw her full pension entitlement, but needs to draw some of that
entitlement to supplement her reduced earnings.
As the scheme rules allow her to phase her pension benefits
she decides to draw a
scheme pension of £5,000 per annum from the
scheme at age 60, deferring the start of the balance of
£10,000 per annum pension until she fully retires.
Her
pension commencement lump sum is linked to the
pension she has become entitled to. So is based solely on the lower
scheme pension level of £5,000 per annum.
The rules of the scheme allow for her deferred pension to be
revalued to reflect the potentially reduced outlay to the scheme,
as well as allowing for further accrual under the scheme in respect
of her continuing employment with the company in her new reduced
capacity.
| Glossary ( RPSM20000000) |
