If you retire taking your PCSPS benefits (classic, classic plus, premium, nuvos) and continue to work for (or are reemployed by) a Civil Service employer, your pension may be reduced (abated).
Abatement will only apply if your combined post-retirement salary and pension is more than you earned before retirement. This earnings figure is known as your ‘salary of reference’.
The level of pension we use, and how we define your ‘salary of reference’, depends on your scheme. The ‘frequently asked questions’ below explains this in detail.
alpha pensions are not subject to abatement.
Abatement could apply in the following circumstances.
you continue to work after taking partial retirement
you are reemployed in the Civil Service having previously fully retired
you access a preserved pension for an earlier period of service, while still employed in the Civil Service
you have taken an annual compensation payment
you had a Compulsory Early Severance package that included a reserved rights top-up payment and continue to work for a Civil Service employer.
How is abatement worked out?
Step 1
We take the ‘salary of reference’ that was calculated when you retired and apply cost of living increases where appropriate.
Your salary of reference will often be your pensionable earnings from the last 12 months before your retirement. If you earned more in a previous year, it might be based on a different period.
This is explained in more detail in the Frequently Asked Questions below.
Step 2
We add your new salary and your pension together. Depending on your scheme, we’ll make assumptions about the about of lump sum you take when working out your abatement.
Step 3
If the sum in Step 2 is greater than the sum in Step 1, we will reduce the pension by the difference.
If you’re retired and applying for a job with a Civil Service employer, you can ask for an estimate showing the potential effect of any abatement.
If you are thinking about taking partial retirement, the partial retirement calculator will give you an indication of whether abatement would apply to your pension and how much it would be.
Applying abatement to your pension
We will reduce your pension from the start date of your new job or the date from when you take partial retirement.
The amount of abatement may change if:
you’re promoted temporarily or permanently
your conditioned hours change
you benefit from a retrospective pay rise that changes either:
the salary that was used to work out your pension before you retired or partially retired, or
the salary that was used in your new post when we initially worked out the abatement
you become entitled to a new temporary or permanent pensionable allowance
you are fee paid and your fees are re-negotiated (see the next section for more details).
We do not increase the level of abatement because of normal annual pay rises, or if you work overtime.
Frequently asked questions
In classic, the ‘salary of reference’ is usually your highest 365 (or 366) day period of pensionable earnings in the last three years of active service, ending on the day before the partial retirement date. Nine step backs are carried out to work out the “highest” period, in the same way as ‘pensionable earnings’ step back. This is explained in more detail here. If you have worked full time for the whole of the period being looked at, the salary of reference is normally the same as the pensionable earnings used to calculate your pension benefits.
If you have worked part time for some or all of the period being looked at, the actual rates of pay and permanent pensionable allowances are used.
In classic plus and premium, the salary of reference is whichever of the following produces the best result:
Your actual pensionable earnings in the 12 months immediately prior to partial retirement, or
Your actual pensionable earnings in either of the last two complete scheme years (1 April to 31 March).
In nuvos the salary of reference is your actual pensionable earnings in the 12 months immediately prior to partial retirement.
No. Any alpha pension you receive will be paid in addition to your salary. alpha pensions are not subject to abatement.
If you were in classic, we’ll apply abatement as if you had taken a standard lump sum.
If you were in classic plus, premium or nuvos, we’ll work out the abatement as if you had exchanged some of your pension to take a standard lump sum. We multiply your initial pension by 0.8125 (if you were in classic plus, we assume you took the standard lump sum for service before 1 October 2002; the post October 2002 pension is multiplied by 0.8125). This ensures abatement applies consistently regardless of how much lump sum you choose to take.
Abatement still applies and can increase or decrease if your fees are re-negotiated.
However, the calculation is slightly different. Your pension is deducted from your old pay to produce your earnings margin. This is the amount you may earn in fees in any 12-month period. For any fees you earn above the earnings margin, your pension or ACP is reduced by a corresponding amount.
If you took compulsory early severance, were under the age of 40 and were serving in a mobile grade on 1 April 1987, you will have had a reserved right to a top up payment. This lump sum was equivalent to the benefits you would have received under previous early retirement provisions.
For abatement only, we work out the amount you would have received under the previous early retirement provisions. This amount is reduced to reflect the extent to which your pension and lump sum were enhanced. The remaining figure is then used in the abatement calculation as if it were a pension in payment. In these circumstances, if abatement is required, your salary is reduced.
If you were in classic, your ill health pension will be reduced to exclude the element of enhancement and the remaining pension will be subject to abatement in the usual way.
If you were previously in premium, classic plus or nuvos and receiving a lower tier pension, it will be subject to abatement. If you are getting an upper tier ill health pension, it will be subject to abatement, and you will not be able to re-join the CSP arrangements.
We’ll apply the annual rate of ACP that would have been in payment as if you had not commuted or repackaged it. Where abatement applies and the amount of abatement is greater than the actual ACP in payment following commutation or repackaging, your new salary will be reduced by the amount of the excess.
We’ll use the pension that would have been in payment as if you had not allocated.
If your preserved benefits are for service ending after 1 April 2007, you’ll have a salary of reference for that period of service. This will be worked out in the same way as described in ‘What is my salary of reference?’ above, and will be increased in line with the cost of living.
If your earlier period of service ended before 1 April 2007, we’ll use your actual rate of annual salary on your last day of service, increased in line with the cost of living from the day after you left the scheme.
If you receive both partial retirement benefits and benefits from an earlier period of service which ended before retirement age, some other differences may apply.
