This Order amends the Taxation of Pension Schemes (Transitional Provisions Order) 2006 and applies to the transitional protection provisions in relation to bridging pensions and pension commencement lump sums (PCLS) and will come into force on 1 January 2009.  

A bridging pension is an additional pension which may be paid by a scheme between the member’s retirement and state pension age. It is usually replaced by the state pension once that becomes payable. The Order makes amendments to allow bridging pensions in payment before 3 July 2007 to be reduced in accordance with the relevant scheme’s pre A-Day rules without attracting unauthorised payment charges on future pension payments.  

The Order also makes a minor technical change to allow a PCLS to be taken with an additional tax-free lump sum where a member has taken a partial transfer of his benefits to another registered pension scheme.