Guaranteed Minimum Pension/NHS and early retirement

tightasagnats

Hello folks,

I'm 50 and have been in NHS pension scheme, initially 1995 section, and the rest in 2008 section (so part comes under 1995 the rest 2008) from what I understand - since 2003. Always part time, 1.5 days a week for around 9 years and now 3.5 days a week. No other pension schemes.

I thought I may be able to retire early (in theory some point between 50 and 55) but looking at things I see the GMP clause - and wonder how you calculate how much this is?

Some years back, I think at 60 I would have got around £20K lump sum and then £5K a year, but then the 2008 section changed things (so age went up etc altough 1995 section benefits payable at 50) and my hours increased. I'm waiting to get a forecast, but now wonder about the GMP issue and whether an "amount/figure" for this is fixed, or is it a % or what?

Thank you for any guidance.

Silvertabby

If you only joined the NHS pension scheme in 2003 then you don't have a GMP to worry about - that all ended in 1997.

However, you will have been contracted out (of the State additional pension scheme) until 2016. During that time, both you and your employer paid reduced rates of NI - in return for which the NHS promised to pay you a pension which would be at least the additional State pension you were giving up by being contracted out.

Those with a GMP have to pass the 'GMP test' - meaning that if the actuarial reduction for early payment and/or commutation would reduce their pension below the GMP level, then they would fail the test and be unable to take their pensions early and/or commute.

In your case, it won't matter if early payment/commutation takes you below the additional pension equivalent, as you are deemed to have had the option of taking full benefits - or chose to take the hit for any reductions.

Spreadsheet_Addict

I'm in the 1995 section (deferred member) and one year younger than you. My understanding is that unless you are in a protected category, the minimum retirement age is 55.

Flugelhorn

Is that right? I am in 1995 section only and thought that you could take pension at 50 but wasn't index linked until 55

1995 Section
Active members who were in pensionable employment between 31 March 2000 and 5 April
2006 retain the right to retire and claim their pension benefits from age 50 on Actuarially
Reduced Early Retirement grounds.
Deferred members who were in pensionable employment between 6 March 1995 and 5
April 2006 and left the Scheme on or after 31 March 2000 retain the right to retire and claim
their deferred pension benefits from age 50 on Actuarially Reduced Early Retirement
grounds.
Members who do not have membership between 31 March 2000 and 5 April 2006 do not
have a protected minimum pension age and from 6 April 2010 have a minimum pension
age of 55.

tightasagnats

50 is the age you can take early retirement under the 1995 scheme, according to what I have understood from NHS pensions factsheet


https://www.nhsbsa.nhs.uk/sites/default/files/2018-02/Early%20Retirement%20factsheet-20180201-%28V4%29.pdf


(and I think the 2008 benefits are payable later but perhaps someone can clarify that):


"If you joined the 1995 section before 6 April 2006 you can choose to take actuarially reduced early retirement from age 50 and receive reduced benefits. Your pension and retirement lump sum are reduced because they are being paid earlier than expected. Your dependants will still get any benefits they are entitled to in full.
If you joined the 1995 section on or after 6 April 2006 your minimum pension age will change to 55 on 6 April 2010. If you returned to the Scheme after 6 April 2006 this may also apply to you.
Scheme fact If you have Special Class Status and you retire voluntarily before age 55 your benefits will be reduced as if your Normal Pension Age was 60."

Spreadsheet_Addict

Ah. I joined in 2007, so I was in the 1995 scheme but with a maximum early retirement date of 55.

tightasagnats

I just had a very helpful phone call with an advisor from the NHS pension scheme, worth doing as they explained everything I needed to know.


I can retire at 50, and access the 1995 part of my pension, and the 2015 part or leave that where it is, but with a 37% reduction of pension and 27% lump sum reduction of the 1995 bit.


You can go back to working with some limitations, after a 24 hour break (!) (or longer if your Trust stipulates that) so I may be able to give up part of the work and continue with another part.


Thanks to everyone for their help!

stoozie1

OP be aware that once you begin to draw your 1995 scheme pension, you can no longer contribute to your 2015 scheme pension, if you return to work.

Flugelhorn

stoozie1 wrote: »

OP be aware that once you begin to draw your 1995 scheme pension, you can no longer contribute to your 2015 scheme pension, if you return to work.

page 6 confirms this ^ https://www.nhsbsa.nhs.uk/sites/default/files/2017-11/Retire%20and%20return%20guide-20171117-%28V1%29.pdf

tightasagnats

Thank you, yes I realised that, but imagine folks might not. Good to get all the details.