The National Health Service Superannuation Scheme (2008 Section) (Scotland) Regulations 2013

CHAPTER 2.H ABATEMENT

Application of Chapter 2.H

2.H.1.—(1) This Chapter applies if—

(a) a person who is a pensioner member of this Section of the scheme is employed in NHS employment;

(b) the person’s employment is not employment to which the person was transferred as a result of a transfer of an undertaking to the person’s employer;

(c) the person’s pension is a pension under—

(i) regulation 2.D.8 (early retirement on ill health: active members and non-contributing members);

(ii) regulation 2.D.10 (early retirement on ill health: deferred members); or

(iii) regulation 2.D.11(1)(d)(ii) (early retirement on termination of employment by employing authority) in a case where the Scottish Ministers certified that the member’s employment was terminated in the interests of the efficiency of the service in which the member was employed; and

(d) the person has not reached age 65.

(2) In this Chapter, “NHS employment” includes—

(a) employment with an employer in respect of whom a direction has been made under section 7 of the Superannuation (Miscellaneous Provisions) Act 1967(1);

(b) employment to which regulations made under section 10 of the Superannuation Act 1972(2) and having effect in England and Wales apply;

(c) employment to which regulations made under article 12 of the Superannuation (Northern Ireland) Order 1972(3) apply;

(d) employment commencing on or before 31st March 2012 to which a scheme made under section 2 of the Superannuation Act 1984(4) (an Act of Tynwald) applies; and

(e) employment with an employer with whom an agreement has been made under section 235 (superannuation of officers of certain hospitals) of the 2006 Act.

(3) Subject to paragraph (4), in this Chapter—

(a) a person to whom this Chapter applies is referred to as an “employed pensioner”;

(b) the pension to which the employed pensioner is entitled is referred to as the “old service pension”;

(c) the employment in respect of which the pension is payable is referred to as the “the old employment”; and

(d) the employment in which the employed pensioner is employed is referred to as the “new employment”.

(4) This Chapter applies whether or not the person is an active member of this Section of the scheme in the new employment.

Information

2.H.2.—(1) A person who becomes an employed pensioner must—

(a) inform the person’s employer in the new employment, and any other person that the Scottish Ministers may specify, that the old service pension is payable; and

(b) where requested, provide any information about the person’s relevant income in the new employment to the Scottish Ministers or to any other person that the Scottish Ministers may specify.

(2) A person who ceases to be an employed pensioner in one new employment and becomes an employed pensioner in another new employment must—

(a) inform the person’s employer in the other new employment, and any other person that the Scottish Ministers may specify, that the old service pension is payable; and

(b) where requested, provide any information about the person’s relevant income in the new employment to the Scottish Ministers or to any person that the Scottish Ministers may specify.

(3) In this regulation “relevant income” has the meaning given in regulation 2.H.4.

Reduction of pension

2.H.3.—(1) If the condition in paragraph (2) is met, the amount of the old service pension for any financial year is to be reduced.

(2) The condition is that the employed pensioner’s relevant income for the financial year exceeds the employed pensioner’s previous pay.

(3) The amount of the reduction under paragraph (1) is equal to that excess but cannot exceed the enhancement amount.

(4) In this regulation “relevant income” and “enhancement amount” have the meanings given in regulation 2.H.4.

(5) In this regulation “previous pay” has the meaning given in regulation 2.H.5.

(6) For the purpose of calculating the reduction to be made under paragraph (1) in respect of any part of a financial year, the amount of the member’s previous pay is to be reduced proportionately.

(7) If the member has a guaranteed minimum pension under section 14 of the 1993 Act in relation to the old service pension, nothing in this regulation requires the reduction of the old service pension below the amount of the member’s guaranteed minimum pension in relation to it.

Meaning of “relevant income”

2.H.4.—(1) The employed pensioner’s relevant income for a financial year is the aggregate of—

(a) the amount of pay received by the employed pensioner during that year from the new employment (assuming, in any case where the employed pensioner is not an active member of this Section of the scheme in the new employment, that the employed pensioner is such a member); and

(b) the enhancement amount in relation to the old service pension.

(2) The enhancement amount, in relation to an old service pension, is the difference between—

(a) the amount of that pension for that year; and

(b) the amount that that pension would have been had it been payable under regulation 2.D.4 (early payment of pension with actuarial reduction).

(3) If the old service pension is payable under regulation 2.D.8 (early retirement on ill health: active members and non-contributing members) or 2.D.10 (early retirement on ill health: deferred members) to an employed pensioner who had not reached age 55 at the time when entitlement to the pension arose, for the purposes of paragraph (2)(b)—

(a) the fact that entitlement to a pension under regulation 2.D.4 depends on reaching that age is ignored; and

(b) the employed person’s actual age at the relevant time is taken into account in determining the reduction to be made under regulation 2.D.4(2).

(4) If the old service pension is an upper tier ill health pension, for the purposes of paragraph (2)(b), only the employed pensioner’s actual pensionable service at the time when entitlement to the pension arose is taken into account in determining the amount that would have been payable under regulation 2.D.4.

(5) If the employed pensioner exercised the option under regulation 2.D.14 (general option to exchange part of pension for lump sum) in relation to the old service pension, the resulting reduction in the pension is ignored for the purposes of this regulation.

(6) The resulting reduction in the pension is to be taken into account for the purposes of this regulation if the employed pensioner—

(a) exercised the option under regulation 2.D.17 (election to allocate pension) in relation to the old service pension; or

(b) is a 2008 Section Optant who was entitled to a lump sum under regulation 2.K.12 (amount of pension and lump sum to be paid to a 2008 Section Optant) in relation to the old service pension.

(7) In this regulation, references to the amount of a pension for any financial year are to its amount for that year after any increases payable under the Pensions (Increase) Act 1971(5) in respect of that pension, including the increases that would have been payable in respect of any amount not paid because of a reduction ignored under paragraph (5).

Meaning of “previous pay”: general

2.H.5.—(1) For the purposes of this Chapter and subject to paragraph (3) and regulations 2.H.6 (members with concurrent employments) and 2.H.7 (part-time employment), an employed pensioner’s previous pay is the greater of—

(a) the employed pensioner’s reckonable pay for the purposes of the old service pension; and

(b) the annual rate of pay for the old employment at the time it ceased.

(2) In this regulation “annual rate of pay” means the sum of—

(a) the annual rate of so much of the employed pensioner’s pensionable pay immediately before the old service pension became payable as consisted of—

(i) salary;

(ii) wages; or

(iii) other regular payments,

of a fixed nature; and

(b) so much of any fees and other regular payments not of a fixed nature as—

(i) was payable to the employed pensioner during the period of 12 months ending with the day the old employment ceased; and

(ii) formed part of the employed pensioner’s pensionable pay.

(3) Subject to regulation 2.H.6, the amount to be taken as the employed pensioner’s previous pay must be adjusted in each financial year for inflation.

(4) The reference in paragraph (3) to adjusting that amount in each financial year for inflation is to increasing it by the same amount as that by which an annual pension equal to that amount would have been increased under the Pensions (Increase) Act 1971(6) at 6th April in that financial year if—

(a) that pension was eligible to be so increased; and

(b) the beginning date for that pension were the same as the beginning date for the old service pension.

(5) In this regulation, “the beginning date” in relation to a pension means the date on which it is treated as beginning for the purposes of the Pensions (Increase) Act 1971 (see section 8(2) (meaning of “pension” and other supplementary provisions) of that Act).

Meaning of “previous pay”: members with concurrent employments

2.H.6.—(1) In the case of an employed pensioner who held one or more other NHS employments at the same time as the old employments, the amount to be taken as the employed pensioner’s previous pay is the sum of—

(a) the amount of the employed pensioner’s previous pay, in accordance with regulation 2.H.5 (meaning of “previous pay”: general);

(b) in respect of any of the other NHS employments which is held in the financial year mentioned in regulation 2.H.3(2) (reduction of pension), the annual rate of pay for those employments in that financial year; and

(c) in respect of any of the other NHS employments which is not held in this Section of the financial year mentioned in regulation 2.H.3(2), the pensionable pay for that employment for the period of 12 months ending with the day before the old employment ceased (or, if the employed pensioner was not a member of this Section of the scheme in that employment in that period, the amount that would have been the pensionable pay for it assuming that the employed pensioner had been such a member.

(2) The amount to be taken as the employed pensioner’s previous pay in accordance with paragraph (1) must be adjusted in each financial year for inflation in the manner set out in regulation 2.H.5(4).

Application of this Chapter to part-time employment

2.H.7.—(1) This regulation provides for the application of this Chapter where the old employment or the new employment is a part-time employment.

(2) The amount of the employed pensioner’s reckonable pay for the purposes of the old service pension, as referred to in regulation 2.H.5(1)(a) (meaning of “previous pay”: general), must be determined without reference to regulation 2.A.14 (non-concurrent part-time employment) or 2.A.15 (concurrent part-time employments).

Employed pensioners with more than one pension

2.H.8.—(1) This regulation provides for the application of this Chapter where a person is entitled to more than one old service pension falling within regulation 2.H.1(1)(c) (application of Chapter 2.H) in any financial year.

(2) In regulation 2.H.3 (reduction of pension), for paragraphs (1) to (3) substitute—

“(1) If the condition in paragraph (2) is met, the amount of the old service pensions for any financial year is reduced.

(2) The condition is that the employed pensioner’s relevant income for the financial year exceeds the employed pensioner’s previous pay for all the old employments.

(3) The amount of the reduction under paragraph (1) in the case of each of the pensions is equal to the same proportion of that excess as the amount of the pension for the financial year before the reduction bears to the sum of the pensions for that year before the   reduction.”.

(3) In regulation 2.H.4(1)(b) (meaning of “relevant income”), for “the old service pension” substitute “all the old service pensions”.

(4) Regulation 2.H.9 (provisional reductions and later adjustments) applies as if references to the old service pension were references to all those pensions.

Provisional reductions and later adjustments

2.H.9.—(1) If it appears to the Scottish Ministers that the condition in regulation 2.H.3(2) (reduction of pension) will be met in any financial year in respect of the old service pension for that year, the Scottish Ministers may reduce the amount of that pension paid at any time in the financial year.

(2) Where the old service pension for a financial year is being reduced under this Chapter, the Scottish Ministers must review the amount of the reduction—

(a) at the end of the financial year; and

(b) at any time during the financial year if it appears to the Scottish Ministers that—

(i) the amount of the reduction made for the year is or may become incorrect; or

(ii) no reduction should be made.

(3) If at any time during the financial year it so appears, the Scottish Ministers must make such adjustments, whether by altering the amount of the reduction or by repaying to the employed pensioner any amount that should not have been deducted from the pension, as appear to the Scottish Ministers to be required.

(4) If at the end of the financial year it is apparent that—

(a) the reduction in the old service pension for the year was excessive; or

(b) no such reduction should have been made,

the Scottish Ministers must repay the amount due to the employed pensioner.

(5) If at the end of the financial year it is apparent that the old service pension paid for the year exceeded the amount due because the reduction in the old service pension required under regulation 2.H.3 (reduction of pension) was not made, the employed pensioner must repay the excess to the Scottish Ministers.

(6) Paragraph (5) does not affect the Scottish Ministers’ right to recover a payment or overpayment in any case where the Scottish Ministers consider it appropriate to do so.

(1)

1967 c.28. Section 7 was amended by S.I. 1968/1699, section 10(5) of, and paragraph 66 of Schedule 6 and Schedule 8 to, the Superannuation Act 1972 (c.11), Schedule 5 to the National Health Service Reorganisation Act 1973 (c.32), paragraph 24 of Schedule 16 to the National Health Service (Scotland) Act 1978 (c.29) and paragraph 29 of Schedule 1 to the National Health Service (Consequential Provisions) Act 2006 (c.43).

(2)

1972 c.11. Section 10 was amended by Schedule 5 to the National Health Service Reorganisation Act 1973 (c.32), Schedule 7 to the National Health Service (Scotland) Act 1972 (c.58), sections 4(2) and 8(5) and (6) of the Pensions (Miscellaneous Provisions) Act 1990 (c.7), paragraph 7 of Schedule 8 to the Pension Schemes Act 1993 (c.48) and by S.I. 2001/3649.

(3)

S.I. 1972/1073 (N.I. 10).

(4)

1984 c.8 (Tynwald).

(5)

1971 c.56.

(6)

1971 c.56.