Nhs tier 2 pension

Kalcy

Hi, I am hoping someone can please help me. I have had to retire from my nhs post due to ill health. I am 38 & have been awarded tier 2 of the 1995 pension scheme. I thought my years would be made up by two thirds to my 60th birthday which I averaged an increase of approx 14years however they have only aearded me an increase of just over 6 years. Is this calculation correct or have they made a mistake

Silvertabby

1995 Section Definition
Tier 1 Permanent ill health Pension will be paid based on Scheme membership built up without reduction. No enhancement to benefits.
Tier 2 plus an enhancement of two thirds of your prospective membership to normal pension age.Total membership may not exceed prospective
membership at 60.

I make the enhancement as 14 years as well. I'm not an NHS pensions expert - hopefully someone else will chip in with an explanation?

Kalcy

Thank you for your reply. I am going to phone them tomorrow just wanted to make sure I had all my facts correct first

blackcatsx2

I'm sorry to hear about your ill health. I wonder if you have been transferred to the 2015 scheme. Staff were automatically transferred on 1st April 2015 I think (no choice) and the ill health retirement benefits seem to be calculated differently. Although 6 years isn't the amount I calculate for 2015 scheme either!
I hope you are able to sort it out.

System

Hi

I am no expert either.

It states 2/3 which is 14 years.
If you are getting 6 years then you could be part time, doing 16 hours a week or similar.

System

Hi

Just a note of warning...

If you get the ill-health retirement you may also get a tax bill for exceeding your annual allowance. There should be an exemption, BUT ask and make sure you get some help in understanding the implications.

HMRC will tax first and answer questions afterwards.

xylophone

If you get the ill-health retirement you may also get a tax bill for exceeding your annual allowance. There should be an exemption, BUT ask and make sure you get some help in understanding the implications.

The OP can google

NHS Pensions - Exemptions from the Annual Allowance charge and pick up the latest guidance (04.2017) V3 1

Q. I am retiring on ill health grounds, how do I know if I will be affected?

A. Members who retire on ill health grounds are not automatically excluded from Annual Allowance charges. If you are retiring on ill health grounds, you are more likely to be affected if you are eligible for ill health benefits which provide uplift to your pension and lump sum.

This normally happens when you are awarded “Tier 2” ill health retirement benefits.

HMRC have stated that their “Severe Ill Health” Condition must be met in order for an individual to be exempt from the annual allowance in the tax year they retire on ill health grounds.

HMRC’s Severe Ill Health Condition is different to the conditions required to receive Tier 2.

As part of your ill health application you will be asked to consent in order for our medical advisers to assess whether you meet HMRC’s severe ill health condition. This test can help to establish whether or not you are exempt from any annual allowance charge in the tax year you retire.

xylophone

According to

https://contactcentreservices.nhsbsa.nhs.uk/selfnhsuktest/template.do;jsessionid=AE5816BA4BC0D23286E99ACE5385CACE?name=If+I+am+awarded+a+Tier+2+Ill+Health+pension%2C+will+this+count+towards+my+Annual+Allowance%3F&id=17120

From 1st April 2012, on receiving notification from OH Assist regarding your Tier 2 Ill Health application, NHS Pensions will also receive details of whether you also meet the additional HMRC Severe Ill Health Criteria (SIHC). If you meet the HMRC SIHC then you will be exempt from any Annual Allowance charges, if your NHS Pensions input amount exceeds that years threshold.

If you do not meet HMRCs SIHC, and the following applies:
You have been awarded Tier 2 Ill Health and
Your NHS Pension input amount exceeds that years limit
You will not be exempt from Annual Allowance charges and will be issued with an Annual Allowance statement by NHS Pensions.

Andrew3003

Can anyone advise please? I have been awarded a tier 2 health retirement.
I was unemployed in 2”13-14 for 15 months based on the same condition. When I returned to work with a new employer (nhs) my annual pensions statement showed a “notional” decrease in the “pot” from 700k to 550k. When I returned to work the next statement showed an increase again back to approx 700k, and mybacxountant used carry forward or back allowances to cover this “increase”, using up all my allowance. I now gave a big tax bill from the awarding of tier 2 pension which will pretty much wipe out tier 2. I can’t understand the basis that my pension “pot” decreased in value. Can anyone help me please? Surely the “pot” should have been frozen (apart from inflation changes)? Not decreased. Thanks

Manxman_in_exile

Are you sure there is a "pot"?


When I worked in the NHS and you asked for a pension statement you would only get a projection of your annual pension and projected lump sum. And that is all you need to know, surely? The value of the pot is irrelevant unless you want to transfer out(?). And why would you do that?


PS - I left the NHS five years ago so may be hopelessly out of date!

xylophone

mybacxountant

Has your accountant read the documents linked at 7 and 8 above?

Has he ( or have you) contacted the administrator for an explanation/breakdown of figures?