NHS Deferred Pension. Statement explanation?

artha

Whilst trying to sort out my own pension provision/planning to take into account my wifes position should I die early, I have been looking at any of her own pension rights she may have from past employment (on top of getting a state pension forecast for her which shows a full entitelement + small amount of extra pension. Grad Pension/SERPS?)

My wife worked for ICI for a couple of years (paying into a 60ths scheme I think) then worked for the NHS for 4.5 years until our daughter was born 27 years ago. I traced her pensions and am still awaiting a statement from ICI but I have finally received a reply from the NHS which shows that she has a pension entitlement of £592.76/year and, it would appear, a Tax free Lump Sum Retiring Allowance of 3x Pension i.e. £ 1778.28 + Tax free Life assurance lump sum of £1,778.28.

I can't find any information on the NHS website so wondered if anyone was familiar with the NHS scheme. Is the lump sum in addition to pension?

My wife had not accrued any occupational pension since then until 2004 when she stopped contract lecturing,became permanent salaried and joined the Teachers Pension scheme. A further question I have is whether there any benefits in transferring the bits of ICI/NHS pension into the Teachers Scheme?

seven-day-weekend

I am not a member of the NHS Scheme, but if it is a similar type of Public Service Final Salary Scheme to the Local Government one (of which I AM a member), then the lump sum is in addition to the Pension.

Can't help with anything else, sorry, but I'm sure someone will be along soon who can!

MikeJones_2

Hi artha,

For the timescale that you are talking about in terms of the NHS pension, your are correct in that she will receive a pension plus a tax free cash lump sum of three times the annual pension.

Check on the Statement to see whether the figures quoted are up-to-date - i.e. that they have quoted the current values of pension and lump sum (rather than the figures at the date of leaving servce).

When your wife left the NHS, her preserved pension and lump sum would have been calculated as at that date. Since then they will have received annual increases matching the full rate of inflation. She will continue to enjoy inflationary increases right up to the date she draws her pension benefits.

During retirement, her pension in payment will continue to enjoy full inflation increases.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

artha

MikeJones wrote: »

Hi artha,

For the timescale that you are talking about in terms of the NHS pension, your are correct in that she will receive a pension plus a tax free cash lump sum of three times the annual pension.

Check on the Statement to see whether the figures quoted are up-to-date - i.e. that they have quoted the current values of pension and lump sum (rather than the figures at the date of leaving servce)

This is the first quote she has ever had since leaving. In fact she didn't realise she had been paying into a pension whilst working for the NHS although she recalls paying "something called superannuation which I never understood"i.e pension

I believe the stated amounts are the current value of benefits payable for this deferred pension and will therefore increase with inflation.

Its not a great deal of money but just shows how easy it is to lose out on benefits you have accrued early in life and perhaps forgotten about or never even realised you had!

For the ICI pension my wife vaguely recalls someone telling her to contact them when she was 65 but left to her own devices she would probably never have remembered.

AS far as we are aware neither the NHS or ICI have tried to contact her in the intervening years to update her pension position

dunstonh

AS far as we are aware neither the NHS or ICI have tried to contact her in the intervening years to update her pension position

They would have no reason to. Although some do send out an update every 5 years or so. Of course, they have to know your current address and many people forget to tell them.

Ian_W

artha wrote:

A further question I have is whether there any benefits in transferring the bits of ICI/NHS pension into the Teachers Scheme?

This from the TPS website suggests she missed the boat, I'm afraid.

Q. Can I transfer my pension credit to the TPS from another scheme?
A. When you join the TPS, you can transfer pension credit from a previous scheme [blah, blah!!] .... and you apply for a transfer within 12 months of entering pensionable employment.

Schemes often have a time limit on transfers-in and this appears to be no exception. You could check with them though - but the ability to buy added years [either by transfers-in or additional contributions] was removed around 2007 in common with other public sector schemes. You can still buy up to £5K extra pension by additional contributions .
HTH.

artha

dunstonh wrote: »

They would have no reason to. Although some do send out an update every 5 years or so. Of course, they have to know your current address and many people forget to tell them.

Yes I agree and this has what has happened in the case of my wife. As she never fully realised that she had any deferred benefit from either scheme she never thought to update her details with former employers. I wonder how much pension benefit is lost in this way?