NHS pension

Rosemary68

I have recently come off the old NHS pension and am now transferred to the new. I can still retire at 55 as in special classes. If I decide to continue working and reduce to part time will this affect my old pension. I have annual statements showing what my lump sum and yearly income would be. I’m 53 now but plan to continue working until 58-60. 

Purplelady65

I am not sure which old nhs pension scheme you are referring to as there are more than one. When you refer to the new scheme do you mean the 2015 scheme? You may not be aware but the Fire Brigade Union and judges took out a case citing age and indirect discrimination which went all the way to the Supreme Court and they won! This means for nhs workers that everyone will be put back into their old schemes until 31 March 2022 and everyone will transfer to the 2015 scheme on 1 April 2022. Anyone who started work with the nhs from 1 April 2015 will remain in the 2015 scheme. Re part time working for final salary pension the full time salary is used for the calculations and the service if part time is calculated on wte. 

Dazed_and_C0nfused

That isn't what the judgement means though.

People will have a choice, they won't all be put back into their old scheme.

Some will be better off sticking with the current scheme and taking an actuarial reduction on the higher accrual in the new scheme.

Each scheme affected will be slightly different so individual decisions will have to be made at some point in the future.

hugheskevi

Purplelady65 said:

Anyone who started work with the nhs from 1 April 2015 will remain in the 2015 scheme.

To note this should read "from 1 April 2012" From the Consultation Document:

The proposals set out within this consultation will apply to all members who were in service on or before 31 March 2012

Dazed_and_C0nfused said:

People will have a choice, they won't all be put back into their old scheme.

Under a Deferred Choice Underpin (DCU) outcome, they will be put back into their old scheme, with an underpin inserted in the old scheme to give them a choice (usually at retirement) about whether they want to receive pre-2015 scheme benefits for the period 2015-22 or post-2015 scheme benefits for the period 2015-22. From the Con Doc:

Under the DCU, eligible members would, in the first instance, be deemed to have been accruing benefits in their legacy scheme for the remedy period, regardless of whether they originally had transitional protection or not. When those members are entitled to receive pension benefits under either their legacy or reformed scheme design (e.g. on retirement), they would then be offered a choice of which set of benefits they wished to receive for the remedy period. In technical terms, individuals would remain members of the legacy scheme, but if they opted for reformed scheme benefits, they would be paid those benefits within the legacy scheme, by means of a ‘statutory underpin’.

In most cases, this will be irrelevant, but in terms of Annual Allowance and pension inputs in particular it is significant.

nigelbb

hugheskevi said:

Purplelady65 said:

Anyone who started work with the nhs from 1 April 2015 will remain in the 2015 scheme.

To note this should read "from 1 April 2012" From the Consultation Document:

The proposals set out within this consultation will apply to all members who were in service on or before 31 March 2012

Dazed_and_C0nfused said:

People will have a choice, they won't all be put back into their old scheme.

Under a Deferred Choice Underpin (DCU) outcome, they will be put back into their old scheme, with an underpin inserted in the old scheme to give them a choice (usually at retirement) about whether they want to receive pre-2015 scheme benefits for the period 2015-22 or post-2015 scheme benefits for the period 2015-22. From the Con Doc:

Under the DCU, eligible members would, in the first instance, be deemed to have been accruing benefits in their legacy scheme for the remedy period, regardless of whether they originally had transitional protection or not. When those members are entitled to receive pension benefits under either their legacy or reformed scheme design (e.g. on retirement), they would then be offered a choice of which set of benefits they wished to receive for the remedy period. In technical terms, individuals would remain members of the legacy scheme, but if they opted for reformed scheme benefits, they would be paid those benefits within the legacy scheme, by means of a ‘statutory underpin’.

In most cases, this will be irrelevant, but in terms of Annual Allowance and pension inputs in particular it is significant.

What will be the solution for existing pensioners? Presumably a calculation will be made of what their pension would have been had they stayed in the 2008 scheme compared to their pension today then they will be offered the choice of whichever is higher.

Duggo

Does this apply to deferred members?

Dazed_and_C0nfused

Duggo said:

Does this apply to deferred members?

Does what apply?

The McLoud judgement does, providing you had service in the relevant period.

hugheskevi

nigelbb said:

What will be the solution for existing pensioners? Presumably a calculation will be made of what their pension would have been had they stayed in the 2008 scheme compared to their pension today then they will be offered the choice of whichever is higher.

In-scope members who had some service after 2015 and who have retired (or will retire) before 2022 will retire on their existing terms.

At some point after 2022 they will be given a choice of pension based on either having been in the pre-2015 scheme or the post 2015 scheme for the period 2015-22. Some may be remedied before 2022, especially those who may be higher priority, eg, ill-health and death cases.

It may be difficult for some to make the choice between the different benefits, as for many it will be a choice between a higher pension but lower lump sum so it may not be immediately clear which the better offer is. Differences in survivor benefits and so forth will also complicate the decision.

Many will have had 'tapered protection' and so moved to the post 2015 scheme at some point after 2015, so that group will need to choose a different set of benefits to what they currently receive as the tapered option will not be available.

Note above is subject to consultation.

Does this apply to deferred members?

Yes.

Duggo

Sorry I wasn’t clear.  I have pension in the 2008 and 2015 pensions, and left the nhs in 2016. Sounds like I’m in scope.   I don’t have much in the 2015 scheme. 

 Thank you.