NHS Pension CPI or RPI

[Deleted User]

Hi, i have recently recieved a letter from NHS pensions, telling me that my pension which was deferred in 2002, would be increased "by the appropriate revaulation increase applicableat the time of retirment only"



That would appear to say then, that despite my thinking, that the figure would be updated yearly with RPI, from the years 2002-2011, this will not be the case.


This does not seem right to me, does anyone have any information regarding this?

Chrs

kidmugsy

If the T&Cs say that it will be updated according to whichever inflation index the government uses for the purpose, then you'll be getting CPI from the date the govt made the swap.

There do exist some pensions where the T&Cs specified RPI, so that's what the deferred member and pensioners will get. Lucky them.

I too got RPI replaced by CPI on one of my pensions. I was surprised. That was because I had believed the leaflets from the pension scheme instead of reading the T&Cs (officially called the Trust Deed I imagine) as I should have done. Of course our trade union might have warned us. But our trade union was useless in almost every regard so there was little chance off that.

This should have come as no surprise to people, including me. It was widely forecast that the like would happen when nice Mr Brown introduced CPI as his preferred measure of inflation.

[Deleted User]

Yes, i fully understand that, but this letter appears to say, that RPI will not be used AT ALL, that a calculation using CPI only, will be used to calculate the final figure, but at retirment date only.

Thrugelmir

Inflation could be negative in a given time period. This therefore needs to be factored into the final figure.

Teaandscones

Thrugelmir wrote: »

Inflation could be negative in a given time period. This therefore needs to be factored into the final figure.

Only if you had active public sector funds after 2014/2015. Before the public services pensions act came into force then (which does allow inflaton to be negative) it was the 1971 pension increases act that applied. The later as its title suggests did not allow negative inflation changes to pensions accrued.

xylophone

http://www.sppa.gov.uk/Documents/NHS/NHS%202015%20Scheme/NHS_Scheme_Comparison%20_Table.pdf

Assuming it is the same for England and Wales, revaluation of deferred benefits appears to be CPI.

hugheskevi

i have recently recieved a letter from NHS pensions, telling me that my pension which was deferred in 2002, would be increased "by the appropriate revaulation increase applicableat the time of retirment only"

Correct, with the scheme administrator using the revaluation factor found at this link. Updated factors are published each year.

That would appear to say then, that despite my thinking, that the figure would be updated yearly with RPI, from the years 2002-2011, this will not be the case.

RPI figures are used for the relevant time period in calculating the index numbers for the spreadsheet at the link above.

but this letter appears to say, that RPI will not be used AT ALL, that a calculation using CPI only, will be used to calculate the final figure, but at retirment date only.

I do not interpret the letter in this way.

Flugelhorn

OH took a deferred (from 2005) NHS pension last year. They didn't specify what they had done re annual uplifts but we calculated what it would be if they had used RPI until the swap and then CPI after that and the figures pretty well matched. Ended up with about 40% increase on the amount at deferral

[Deleted User]

Perhaps your math is better than mine, or your circumstances are different then, as i did the same calculation, and by my reckoning, they are £200 a year short.


Interestingly, there is a tool on the scottish pensions website, that does it for you, which alterted me to this in the first place.

Johnnyboy11

Worth pointing our here that an NHS Pension started early doesn't get any inflation uplift until age 55 is reached. One rule to watch out for.

Flugelhorn

DeletedUser wrote: »

Perhaps your math is better than mine, or your circumstances are different then, as i did the same calculation, and by my reckoning, they are £200 a year short.


Interestingly, there is a tool on the scottish pensions website, that does it for you, which alterted me to this in the first place.

I don't know, it was a bit of back of an envelope calculation - it was a case of the amount stated by the NHSBSA being approx the same as the amount I calculated.

Still not sure how mine was calculated as it was combined officer / practitioner and I had about 5 different figures quoted to me in the last 2 years, with rather more variation than £200 a year :eek: