NHS Pensions dilemma

lzsisku

As a high earner I was put off by the tax bills due to the lower annual allowance. Left the Pension scheme two and a half years ago, having received a 16% salary uplift from my employer. I am in the 1995 scheme and my normal retirement age is in a year’s time. My salary has increased by about £7000 since I left the scheme. I don’t know whether my pension is going to be calculated based on my salary at retirement OR my salary at the time I came out of the scheme. Need to work out if it is worth rejoining for a year or not. Any ideas?

justcheckin

Others here are more knowledgeable than me, but I believe for the NHS 95 scheme it is your best year of your last 3 which will be used to calculate the final salary component of your pension.

saucer

lzsisku said:

As a high earner I was put off by the tax bills due to the lower annual allowance. Left the Pension scheme two and a half years ago, having received a 16% salary uplift from my employer. I am in the 1995 scheme and my normal retirement age is in a year’s time. My salary has increased by about £7000 since I left the scheme. I don’t know whether my pension is going to be calculated based on my salary at retirement OR my salary at the time I came out of the scheme. Need to work out if it is worth rejoining for a year or not. Any ideas?

This type of advice is not hard to find in the scheme booklet https://www.nhsbsa.nhs.uk/sites/default/files/2019-03/1995-2008%20Members%20Guide%20%28V22%29%20printable%2002.2019_0.pdf. Try page 17 and page 20 as to how the pension is worked out (justcheckin is right...and to be clear it is your salary when you retire, regardless of whether you rejoin or not)

hyubh

lzsisku said:

As a high earner I was put off by the tax bills due to the lower annual allowance. Left the Pension scheme two and a half years ago, having received a 16% salary uplift from my employer. I am in the 1995 scheme and my normal retirement age is in a year’s time. My salary has increased by about £7000 since I left the scheme. I don’t know whether my pension is going to be calculated based on my salary at retirement OR my salary at the time I came out of the scheme. Need to work out if it is worth rejoining for a year or not. Any ideas?

Assuming you've opted out, as things currently stand, the calculation is relative to when you opted out and became deferred.

With respect to rejoining, a key point is whether this will lead to an aggregation of benefits or not. The LGPS has a rule that prevents aggregating in this scenario (i.e. rejoining the scheme in an employment for which the individual has previously opted out of scheme membership) - I don't know about the NHS scheme.