When a member takes Premature Retirement or Age Retirement from the Final Salary arrangement (including any final Age Retirement after previous Phased Retirement), these awards will be subject to abatement if the member returns to eligible employment in the Scheme. If the member’s pension plus pensionable earnings from the eligible employment exceed their revalued Salary of Reference, the pension award will be stopped. This applies irrespective of whether the member is accruing new benefits or has opted-out of the Scheme in respect of their post retirement eligible employment.

We recently dealt with a case for a member who had opted-out of the Scheme in respect of their post-retirement employment. However, despite being in an eligible employment the employer submitted their service and salary details marked as all days out. If it had not been for the member completing and submitting a Certificate of Re-employment for the 2017/18 tax year, there would have been a significant overpayment of pension. With MDC replacing the need for Certificates of Re-employment in the majority of cases it’s more important than ever for employers to provide the correct service and salary details for members in post-retirement employment, even if they’ve opted-out of the Scheme in respect of that employment.

For the avoidance of doubt, if the member is re-employed in an eligible employment (a teaching role) you must supply the service and salary details to provide the actual pensionable earnings. If the member is re-employed in a non-teaching role (for example a clerical role, or as a teaching assistant) they’re not in an eligible employment and you don’t need to provide any service and salary details.