The Armed Forces Pension Scheme Order 2005

PART H ABATEMENT

H.1.    Application of Part H

(1) This Part applies where a person who is a pensioner member or a deferred member of the Scheme—

(a) is re-engaged in service by virtue of which he is eligible to belong to the Scheme, or

(b) is re-engaged in service by virtue of which he is eligible for membership of the Reserve Forces Pension Scheme

(whether or not he is an active member in that service).

(2) In this Part—

(a) a person to whom this Part applies is referred to as a “re-employed pensioner”,

(b) the service that has terminated and in respect of which the pension is or will be payable and the service that he enters on re-employment are referred to respectively as the “old service” and “new service”, and

(c) the pension to which he is or will become entitled in respect of the old service is referred to as the “old service pension”.

H.2.    Abatement of pensions on re-employment: general rules

(1) If—

(a) the annual rate of the basic pay payable to the re-employed pensioner as at the last day of his old service (“the old rate”), exceeds the amount of the annual rate of the basic pay payable to him at the time he enters the new service (“the new rate”), and

(b) the annual rate of the old service pension to which he is entitled at the time of entering the new service or, if he is a deferred member, at the time when he becomes entitled to payment of the pension, is greater than the amount of that excess,

the annual rate of the old service pension as at that time is reduced by such amount (“the reduction amount”) as is necessary so that it is equal to the amount of that excess as at that time.

(2) If the new rate equals or exceeds the old rate, the re-employed pensioner is not entitled to payment of the old service pension during the new service.

(3) Where paragraph (1) applies, the annual rate of the old service pension continues to be reduced during the new service by the reduction amount regardless of any increase in the annual rate of the old service pension made after the time when the member is re-employed, or, if he is a deferred member, after the time he becomes entitled to payment of the pension.

(4) In the case of a re-employed pensioner who exercises the option under rule D.10 (option to exchange lump sum for pension) in relation to the old service pension, any increase of the pension as a result of the exercise of the option is disregarded for the purposes of this Part.

H.3.    Abatement of pensions: effect of changes after re-employment

(1) This rule applies where after the re-employed pensioner enters the new service the re-employed pensioner is re-employed in another post or his post is regraded.

(2) Rule H.2 applies from the time of the re-employment or regrading as if the re-employed pensioner were entering the new service at that time, and the service before that time is disregarded.

H.4.    Special rule about annual rate of pay in old service in cases of entitlement to two or more pensions

(1) This rule applies where the re-employed pensioner is entitled, or apart from this Part would be entitled, to the payment of two or more pensions in respect of old service, (including cases where, in addition to being entitled to one or more pensions under the Scheme, the re-employed pensioner is entitled to one or more pensions under the AFPS 1975).

(2) If two or more of the pensions relate to service that ended before the re-employed pensioner’s pension age, in the application of rules H.2 and H.3 to each of those pensions the annual rate of the basic pay payable to the re-employed pensioner at the time he left his old service is taken to be whichever of those annual rates is the greater or greatest.

H.5.    Adjustment of basic pay in old service

(1) If the re-employed pensioner’s new service does not begin immediately after the old service ceases, for the purposes of this Part the annual rate of the basic pay payable to the re-employed pensioner at the time he left his old service is taken to be the adjusted annual rate.

(2) In paragraph (1) “the adjusted annual rate” means the actual annual rate of the basic pay so payable, increased by the same amount, if any, as a pension would have been increased under the Pensions (Increase) Act 1971 by the day on which the new service began if—

(a) it came into payment on the day after the old service ceased, and

(b) it was payable at an annual rate equal to that actual annual rate,

(c) it was eligible to be increased under that Act.

H.6.    General disregard of effect of abatement

In Part E of these Rules references to the amount of the pension payable to a person are to be taken as references to the amount so payable apart from any reduction falling to be made under this Part.