RPSM09101560 - Technical Pages: Member benefits: A secured pension: Scheme pension: Stopping or reducing a scheme pension: Abatement in a public service pension scheme

Abatement of a scheme pension in a public service pension scheme

Temporary suspension or reduction of pensions by public service pension schemes on the re-employment of members within the public sector is a long-standing feature of public service arrangements. The post 6 April 2006 tax rules allow for the continuation of this practice for public service pension schemes.

Abatement and the lifetime allowance (BCE 2 and BCE 3)

If a scheme pension entitlement under a public sector pension scheme is abated at the point it first arises the amount crystallising for lifetime allowance purposes at that point is not altered because of that abatement. The amount crystallising through BCE 2 is calculated by the full rate of the scheme pension, ignoring any abated amount.

Abatement is similarly disregarded where considering future increases of scheme pension in relation to BCE 3.

This explained in more detail in RPSM11104240 and RPSM11104340.

As a consequence of the above, the member’s pension commencement lump sum will not be affected where their linked scheme pension is abated – see RPSM09104410.