bridging pension

Bridging pensions are an important part of this reform,' Boni said.

It is often known as a "bridging pension".

Boni said the lower 'bridging pension' would be paid to those retiring early until they reached the normal retirement age - 60 for women and 65 for men.

We plan to introduce the 'bridging pensions' bill towards the end of the year to make it more difficult for the opposition and the president to reject it,' he told Przekroj weekly.

The government also wants to introduce a new 'bridging pension' that would encourage people to remain in the workforce by reducing payouts to those who, under current pension rules, have the right to retire early. '

Currently, the Polish government works on the special arrangement of "bridging pensions" that would be paid to some of the workers, who work in special conditions, in which working until legal retirement age could be harmful for their health status.

Warsaw, which is battling labour shortages in some sectors of its economy, wants to encourage older workers to stay in the job market by introducing 'bridging pensions', reducing payouts to those who have the right to retire early under current rules. '

The increased amount of a member's annual rate of pension represented by a temporary bridging pension is included as part of the pension input amount calculation.

However, the member may have the option to exchange the bridging pension for an amount of 'whole-life' pension.

This add-back will not happen if the scheme rules are changed so that the bridging pension is exchanged for a whole-life pension automatically rather than at the option of the member.

But when a member retires from service before age 65, a bridging pension is paid automatically until age 65.

Under the rule for earlier retirement the formula is similar but with a reduction for early payment and also an automatic bridging pension of service x 1/80ths x the Basic State Pension at normal pension age.

Note that the bridging pension causing this extra pension input amount was a pension of £1,976.25 payable for one year.

As the option to retire before normal pension age (and the automatic bridging pension that comes with it) only happens at retirement, there is no allowance for the temporary pension for pension input periods prior to retirement.

This example is the same as Example 1 above except that the member does not want the bridging pension and asks the Trustees to exchange it for a lower whole-life pension, which the Trustees accept.

However, the exchanging of the bridging pension for the whole-life pension of £90 does trigger an add-back.

The amount of the bridging pension exchanged (to the extent that it is not reflected under a BCE) is added back.

Same as Examples 1 and 2 above except that the conversion of the temporary bridging pension into a whole-life pension is made unilaterally by the scheme Trustees, and not "pursuant to an option available to the member".

However, unlike Example 2, there is no add-back adjustment for the amount of the bridging pension not reflected under the BCE.

If and when in future pension input periods the member chooses to draw pension before normal pension age with age reduction, the BCE2 reflects the actual pension underlying the BCE2 (i.e. not the bridging but the replacement whole-life pension instead of the bridging pension).

Bridging Pensions - The pensions tax rules on bridging pensions will be aligned with Department for Work and Pensions legislation following the introduction of a single tier pension from 6 April 2016.

The excluded lump sum rule is an anti-avoidance rule to prevent individuals getting higher tax-free lump sums by setting up a bridging pension, thus inflating the initial pension level in order to provide a larger tax-free pension commencement lump sum than would otherwise have been payable.

This means that the '16 x' value factor applies to the temporary bridging pension as it would to a 'whole-life' pension.

Part of the basic provision of the scheme at retirement is a bridging pension payable from normal pension age to age 65.

When a member is able to exchange an amount of 'whole-life' pension for a temporary bridging pension at normal pension age the 'add-back' provision is unlikely to apply if the annual rate of the member's pension is increased, albeit for a limited period of time.