4.3.1 Pensioners who receive a pension under the CSP arrangements and who are re-employed by a CSP employer may not earn more, by way of re-employed salary and pension, than they were earning before they retired. Where re-employed salary and pension exceed previous earnings, the excess is deducted from their pension. This is known as ‘abatement’. Abatement may apply to members opting for partial retirement. See annex 4G for further information regarding partial retirement. alpha pensions in payment are not subject to any abatement.

4.3.2 For the purposes of abatement, an Annual Compensation Payment (ACP) is treated in the same way as a pension. All references to pensions or pensioners below also include members with ACPs.

4.3.3 Abatement, where applicable, only operates for the duration of the re- employment.

4.3.4 Members who are over age 75 are not affected by abatement.

4.3.5 Abatement of salary rather than pension can apply to those re-employed after having received a compensation payment under a Compulsory Early Severance (CES) package that included a reserved rights ‘top-up’ payment. This is because the ‘top-up’ payment includes an element of pension. Please see paragraph 4.3.14 for information on how to deal with this group. This does not apply to members who return after 30 July 2007 and join nuvos/alpha, however, they may be subject to a quarantine period.

4.3.6 Abatement applies whether or not the employment is pensionable. This does not apply, however, if a pensioner works less than a total of 15 days in any 91-day period.

4.3.7 You must use the Pensions Questionnaire in your recruitment process to determine eligibility for the pension arrangements (see Section 4.1). The information collected enables you to identify individuals who have a pension or ACP in payment from an employment covered by the CSP arrangements before they are appointed. The Joiner Tool will identify the correct choice of pension scheme(s) available to them.

4.3.8 If you are recruiting an individual who received compensation as a result of the termination of previous employment covered by the CSP arrangements (for example, as a result of Voluntary Exit), then their compensation could be affected. Again, the Pension Questionnaire will collect this information and the Joiner Tool will identify the correct choice of pension scheme(s). If the member returns within 28 days then the award is cancelled and the compensation payment must be repaid.

4.3.9 People who retired or left with a compensation payment/pension were told, as part of their pension notification that, if they become re-employed in employment covered by the CSP arrangements, they must tell the new employer about their previous service because of possible abatement. They are also responsible for telling the Scheme Administrator that they are taking up the new employment. However, you have a responsibility to notify the member about possible abatement where they tell you they are receiving a pension and you have the responsibility to tell the Scheme Administrator that the pensioner has started work with you. The Joiner Tool will prompt you to take abatement action, where appropriate.

Appointment actions

ou must tell pensioners who are being offered re-employment about the effect of the re-employment provisions of the CSP arrangements on their pension.

Completing the CSP13 (Estimate) and CSP13 forms

To complete the CSP13 for you will need to provide specific details for the employee.

Ongoing action

Once the level of abatement (or earnings margin) has been calculated for a re-employed pensioner, it will not normally change during the course of the re-employment.

Resignation

You must complete box D of form CSP13 to notify the Scheme Administrator.

Scheme Administrator action

On receipt of the CSP13 (Estimate) the Scheme Administrator will calculate any abatement due as a result of taking up the post offered.

Published:
23 December 2021
Last updated:
23 December 2021