Abatement in terms of local pension-help please

d.p

One more question guys.Could you please help me to clarify what is the abatement in terms of the local government pension?Thank you.

payrollpro

Hi d.p.,

I am not sure that abatement exists now in the lgps. Whilst I am a deferred pensioner (i.e. thrown out of lg but not old enough to collect the money!!!) I have been out of lg for nearly 10 years now, so I am a bit out of date.

When I was pensions manager back then we did a lot of abatements, there were a lot of redundancies back then. What happened was that if a person was made redundant and could generate an immediate payment of pension their redundancy payment was reduced because, for some reason, they were not allowed to benefit from both the full redundancy and full lump sum, so there was an offset, or abatement, value set off against one of them.

The problem was that such practice was pretty dodgy even back then. We were constantly pointing out that the entitlements to pension lump sum and redundancy were completely separate in law and it was wrong for one law to interfere with any of the entitlements. Our second complaint was that if the person had opted out of lgps in favour of a personal pension then they woud get all of their pension lump sum (25% of fund) tax free and have all of their redundancy as well. The abatement rules could not apply.

As far as I am aware this was one of the reasons the abatement rules were removed. Really you need to speak to a current pensions manager.

Payrollpro