2 Amendment of the Finance Act 2004
1 Part 4 of the Finance Act 2004 (pension schemes, etc) is amended as follows.
2 After section 236 insert—

“236ZA Defined benefits arrangements: public service pension schemes
1 Subsection (2) applies where—
(a) at the end of a pension input period, an individual has rights under—
(i) a reformed public service pension scheme arrangement (“the reformed arrangement”), and
(ii) a corresponding legacy public service pension scheme arrangement (“the legacy arrangement”), and
(b) the opening value of the individual’s rights under the legacy arrangement for the period (as determined for the purposes of section 234) exceeds the closing value of the individual’s rights under that arrangement for that period (as so determined).
2 The pension input amount in respect of the reformed arrangement for the tax year in which the pension input period ends is to be reduced (but not below zero) by the amount of the excess mentioned in subsection (1)(b).
3 For the purposes of this section an arrangement “corresponds” with another arrangement if—
(a) the arrangements are under pension schemes that are connected, and
(b) a final salary link applies in relation to the individual’s service under those schemes.
4 In this section—
(a) “reformed public service pension scheme arrangement” means an arrangement under a scheme established by—
(i) regulations under section 1 of the Public Service Pensions Act 2013 (“the 2013 Act”), or
2013 c. 25.
(ii) regulations under section 1 of the Public Service Pensions Act (Northern Ireland) 2014 (“the 2014 Act”);
2014 c. 2 (N.I.).
(b) “legacy public service pension scheme arrangement” means an arrangement under a scheme listed in—
(i) Schedule 5 to the 2013 Act, or
(ii) Schedule 5 to the 2014 Act;
(c) “connected”, in relation to a pension scheme, has the same meaning as in—
(i) the 2013 Act (see section 4(6) of that Act), or
(ii) the 2014 Act (see section 4(6) of that Act);
(d) a “final salary link” applies in relation to an individual’s service under two pension schemes if, pursuant to—
(i) paragraph 1 or 2 of Schedule 7 to the 2013 Act, or
(ii) paragraph 1 or 2 of Schedule 7 to the 2014 Act,
the determination of the individual’s final salary for the purposes of one of those schemes is determined (to any extent) by reference to their service in the other scheme.”

.
3 In section 236A (post-entitlement enhancements), in subsection (4)(b), for “and 236” substitute “, 236 and 236ZA”.
Section 236A was inserted by paragraph 13 of Schedule 17 to the Finance Act 2011.