NHS Pension query: impact of dropping a day

Dr_Wu

Hi

I was prompted to ask this question by another similar thread that's currently active. There are however a few specifics about my own query that makes me think I'm best to start a new thread.

I am lucky enough to be in the NHS scheme and have MHO status which means I can retire at 55 (just under 5 years time)

I currently work full time but was considering dropping a day i.e. going from 5 to 4 days for my last working year.

I will have my full 40/80ths by then and my understanding is that my pension will be based on the best year of my final 3 years.

By my reckoning then I can do this and all I will lose is 20% 0f my salary for the last year and my pension will by largely unaffected unless we get a huge pay increase in 2017 (not much chance of that!) as it will be based on my full-time salary for my penultimate year.

Am I correct or am I missing something obvious?

Thanks in advance

Andy_L

It will still use the full-time salary to see if it is the best year for working out the best year in , however that final year will only count as 4/5ths of a year for calculating pensionable service

Dr_Wu

Andy_L wrote: »

It will still use the full-time salary to see if it is the best year for working out the best year in , however that final year will only count as 4/5ths of a year for calculating pensionable service

Thanks Andy, yes that's in line with what I thought, but I'll have the max accrued pensionable service in 2 and a bit years time, well before I'm looking to drop the day so the 4/5th of that last year won't really make any difference. Looking promising..thanks!

Yorkie1

Does the NHS scheme change in 2015 in the way that the civil service pensions are doing? i.e. from that time it's a career average of one's salary? In which case, as the contributions etc at 2015 are frozen, would the 'best of three' be taken from the years 2012-15?

quotememiserable

Andy_L wrote: »

It will still use the full-time salary to see if it is the best year for working out the best year in , however that final year will only count as 4/5ths of a year for calculating pensionable service

so part time workers get a pension based on a notional full time salary? Can't be, surely.

molerat

quotememiserable wrote: »

so part time workers get a pension based on a notional full time salary? Can't be, surely.

If they have already accrued the full 40 years required then yes. If they have not accrued the full amount the pension will still be based on FTE hours but that year would only be worth 4/5ths of a year.

hyubh

Yorkie1 wrote: »

Does the NHS scheme change in 2015 in the way that the civil service pensions are doing? i.e. from that time it's a career average of one's salary? In which case, as the contributions etc at 2015 are frozen, would the 'best of three' be taken from the years 2012-15?

Your 'in which case' does not in fact follow. While no more service will be accrued against the final salary, the later will still be used to calculate pre-2015 benefits (see http://www.nhsemployers.org/PayAndContracts/NHSPensionSchemeReview/AgreementOnNHSPensionSchemeChanges/Pages/SummaryHeadsofAgreement.aspx#transitional).

property.advert

If you intend to retire at 55, how can you have 40 years service ?

You cannot start at 15 and unless you are Doogie Howser you wouldn't start until around age 23 or so.

Are your numbers correct when calculating service ?

andyfr_2

Maybe bought extra years if it's like the LGPS I'm in. A colleague retired last year and had been buying extra years since starting in the scheme.

getmore4less

If you are in the old pension then there is a little trick you can make use of if you have enhanced pay for unsocial, nights, weekend, BH.

The pension is based on the full time equivilent including enhanced rate.

Workers would often go to nights for one of the last three years to boost the pension.

An alternative is to do as many weekend, bank holidays and nights as you can, easier with part time.

The other thing to do is a rolling 3year 12month FTE pay spreadsheet to pick the best month to leave when pensionable pay is highest.

It is relatively easy to boost the pension by around 20%-30% depending on how much enhanced shift work you do now and can do.

Another trick is to forget to put in the timeshhets for a couple of months before the uear you want to enhance and get the 1st month of that year boosted by the previous month enhanced pay.

in the extream you could just go to 12months of sundays and BH to boost to the max 1.6 time base pay(band 4+)

When my OH was looking at this we picked a month that boosted pension by over £100pm from the worst month.

Also at that time the pension was increasing faster than pay rates.

The other thing you can do is take the pension and then return to work BUT there is clawback so can only work part time.

Dr_Wu

property.advert wrote: »

If you intend to retire at 55, how can you have 40 years service ?

You cannot start at 15 and unless you are Doogie Howser you wouldn't start until around age 23 or so.

Are your numbers correct when calculating service ?

easy enough, with mental health officer or special class status every year after 20 counts as 2 years for reckonable service. So, after 30 years I will have 20 + (10x2) = 40 years service.