Interpretation: abatement of pension64

In this regulation and regulations 64A to 64D—

• “abatable pension” means the sum of a person's retirement pension—

  1. a

     disregarding the effect of any reduction under regulation 64D, and

  2. b

     excluding—

     1. i

        phased retirement pension,

     2. ii

        additional pension,

     3. iii

        a pension (or part of a pension) which is payable to the person (P) by reason of Case E applying to P's reckonable service, and

     4. iv

        retirement benefits defined in and payable under the Teachers' Pension Scheme Regulations 2014;

• “adjusted salary of reference” for a person (P) is—

  1. a

     if P's previous employment was full-time, the higher of—

     1. i

        the highest salary taken into account in determining P's average salary under regulation 37 or 38, multiplied by the adjustment factor, or

     2. ii

        (if applicable) the highest salary taken into account in determining P's average salary under regulation 37 or 38 relating to P's further employment, multiplied by the adjustment factor;

  2. b

     if P's previous employment was part-time, the higher of the full-time equivalent of—

     1. i

        the highest salary taken into account in determining P's average salary under regulation 37 or 38, multiplied by the adjustment factor, or

     2. ii

        (if applicable) the highest salary taken into account in determining P's average salary under regulation 37 or 38 relating to P's further employment, multiplied by the adjustment factor;

  3. c

     if P becomes entitled to a further retirement pension during a tax year, and the salary of reference for P's employment immediately prior to the further retirement ( “ the new higher salary of reference ”) is higher than that for the previous employment ( “the existing salary of reference”), the sum of—

     1. i

        the existing salary of reference divided by 365 multiplied by the number of days from the beginning of the tax year to the day before the further retirement, and

     2. ii

        the new higher salary of reference divided by 365 multiplied by the number of days from the date of entitlement to further retirement benefits to the end of the tax year;

• “adjustment factor” for a salary is the amount (if any) by which, immediately before the first day of the employment, that salary would have increased if it had been the annual rate of an official pension as defined in section 5(1) of PIA 1971, beginning and first qualifying for increases under that Act, on the same date as—

  1. a

     the last day of employment at that salary, in a case where the average salary was determined under regulation 37, or

  2. b

     the retirement pension, in a case where the average salary was determined under regulation 38;

• “initial adjusted salary of reference” is a person's adjusted salary of reference divided by 365 and multiplied by the number of days in the initial period;

• “initial period” is that part of a tax year running from a person's entitlement day in respect of retirement benefits and ending at the end of the tax year;

• “pension receipts” means the sum of a person's retirement pension—

  1. a

     including—

     1. i

        phased retirement pension,

     2. ii

        a pension (or part of a pension) which is payable to the person (P) by reason of Cases A, D or E applying to P's reckonable service, including mandatory compensation for premature retirement of the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 1997 M1, and compensation payable under regulation 12 (discretionary compensation for premature retirement) of those Regulations.

     3. iii

        a pension specified in regulation 7(10),

     4. iv

        retirement benefits defined in and payable under the Teachers' Pension Scheme Regulations 2014, and

  2. b

     excluding additional pension, and

• “salary” means—

  1. a

     contributable salary;

  2. b

     pensionable earnings as defined in Chapter 4 of Part 3 of the Teachers' Pension Scheme Regulations 2014.

Scope of abatement of retirement pension following further employment64A

Regulation 64B applies to a person (P) to whom retirement benefits have become payable and who is employed—

a

in pensionable employment, comparable United Kingdom service or employment which would have been pensionable but for—

i

P having made an election under regulation 9 (election for employment not to be pensionable), or

ii

P having reached the age of 75;

b

in part-time employment in a capacity described in paragraphs 1, 2 and 4 to 9 of Schedule 2, which is not pensionable employment by reason of the fact that the employment falls within regulation 7(6), and P has not made an election under regulation 10(1) (election for employment to be pensionable), or

c

in full-time employment which is not pensionable employment by reason of the fact that the employment falls within regulation 7(8), and P has not made an election under regulation 10(2)(d).

Abatement of a retirement pension following further employment64B

1

Where this regulation applies to a person (P) and P is in an initial period—

a

if P's salary in the employment during the initial period equals or exceeds P's initial adjusted salary of reference, no abatable pension is to be paid in that tax year;

b

in any other case, the abatable pension to which P is entitled in the initial period is to be paid only in respect of X number of days, where—

$X=\frac{A}{B}$

and where—

• A is the amount by which P's salary in the employment during the initial period falls short of P's initial adjusted salary of reference, and

• B is the total of P's pension receipts for the initial period divided by the number of days in the initial period.

2

Where this regulation applies to P and P is not in an initial period—

a

if P's salary in the tax year equals or exceeds P's adjusted salary of reference, no abatable pension is to be paid in that tax year;

b

in any other case, the abatable pension to which P is entitled in that tax year is to be paid only in respect of X number of days, where—

$X=\frac{A}{B}$

and where—

• A is the amount by which P's salary in the employment during the tax year falls short of P's adjusted salary of reference, and

• B is the total of P's pension receipts for the tax year divided by 365.

Method of abatement64C

1

Where the abatable pension of a person (P) falls to be reduced—

a

under regulation 64B(1), paragraph (2) applies, or

b

under regulation 64B(2), paragraph (3) applies.

2

Where this paragraph applies, the Secretary of State is to pay P's abatable pension in accordance with regulation 109 (monthly payments) or regulation 110 (quarterly payments), without taking account of the reduction, until the abatable pension has been paid in respect of the number of days calculated in regulation 64B(1)(b), on the assumption that P will remain in employment at the same salary for the remainder of the initial period.

3

Where this paragraph applies, the Secretary of State is to pay P's abatable pension in accordance with regulation 109 (monthly payments) or regulation 110 (quarterly payments), without taking account of the reduction, until the abatable pension has been paid in respect of the number of days calculated in regulation 64B(2)(b), on the assumption that P will remain in employment at the same salary for the remainder of the tax year.

4

When P's abatable pension has been paid in respect of the number of days calculated in regulation 64B(1)(b) or (2)(b) paragraph (5) applies, unless P ceases to be in the employment, or is in employment at a lower salary, in which case paragraph (6) applies.

5

If this paragraph applies the Secretary of State is to pay no further abatable pension to P in respect of—

a

the remainder of the initial period, if regulation 64B(1)(b) applies, or

b

the remainder of the tax year, if regulation 64B(2)(b) applies.

6

If this paragraph applies the Secretary of State is to pay P's abatable pension during the remainder of the initial period or tax year, of such amount and at such times as is necessary in order to achieve the outcome described in—

a

regulation 64B(1)(b) in respect of an initial period, or

b

regulation 64B(2)(b) in respect of a tax year.

Recovery of overpaid pension64D

1

If the abatable pension paid in any tax year has exceeded the amount which should have been paid by virtue of regulations 64B and 64C, the difference between the amount which has been paid and the amount which should have been paid is an overpayment to which paragraph (2) applies.

2

Where this paragraph applies, the overpayment is recoverable—

a

under regulation 114,

b

by a reduction in the abatable pension paid in any subsequent tax year, or

c

by a combination of (a) and (b).