Can I Freeze NHS Pension?

Lowtrawler

Dazed_and_C0nfused said:

Aretnap said:

I was somehow under the impression that the "final salary" part of the 1995 scheme now effectively means the salary you were on at the time you left the 1995 scheme and joined a new scheme.

Have I got that wrong? Is it still linked to your final salary when you leave the NHS, full stop?

(This may influence my wife's career plans for the next few years). 

Not sure where you've got that idea from!

https://www.nhsbsa.nhs.uk/changes-public-service-pensions/your-nhs-pension-after-1-april-2022

Are you aware of the McLoud judgement as that may impact your wife's pension options as well?

Interesting, I always thought that you had to take the scheme benefits at the same time but the article you link to says:

"You can claim these benefits at different times. You can start receiving your 1995 Section benefits without any reductions from age 60"

Has this recently changed due to McLoud? My wife is part of the Scottish NHS scheme, is that treated differently?

Flugelhorn

always been able to take 1995 at 60 and then had to hang on forever for 2015 or just take the hit - nothing to do with McLoud 

Lowtrawler

Flugelhorn said:

always been able to take 1995 at 60 and then had to hang on forever for 2015 or just take the hit - nothing to do with McLoud 

I always understood if you commenced taking the 1995 pension then you were unable to continue paying into the 2015 scheme at that point. Is this not the case?

Flugelhorn

Lowtrawler said:

Flugelhorn said:

always been able to take 1995 at 60 and then had to hang on forever for 2015 or just take the hit - nothing to do with McLoud 

I always understood if you commenced taking the 1995 pension then you were unable to continue paying into the 2015 scheme at that point. Is this not the case?

That is right, I wasn't quite clear - colleagues took their 1995 and effectively stopped paying into the 2015 but they couldn't take it for several more years unless they had it reduced etc.  Many continued working for a while.

Lowtrawler

Flugelhorn said:

Lowtrawler said:

Flugelhorn said:

always been able to take 1995 at 60 and then had to hang on forever for 2015 or just take the hit - nothing to do with McLoud 

I always understood if you commenced taking the 1995 pension then you were unable to continue paying into the 2015 scheme at that point. Is this not the case?

That is right, I wasn't quite clear - colleagues took their 1995 and effectively stopped paying into the 2015 but they couldn't take it for several more years unless they had it reduced etc.  Many continued working for a while.

Thanks, has that altered with McLoud? Can they now take the 1995 benefits and continue paying into the 2015 scheme?

I have always felt that it was unfair to have built up pension entitlements available at 60 and then not be able to take them because you are contributing into a scheme which won't pay out until 67.

Flugelhorn

I don't know - things change all the time, but suspect something would have to be done to make it fairer. I stayed in 1995  and retired before McLoud was a thing 

the 2015 was incredibly unpopular with those of us with not long left to work, Many opted not to contribute to 2015 and went for private pensions / ISAs instead but they will have missed out on revaluation etc. 

 After I left scheme and then later took pension,  employer tried to "automatically enrol" me again... got some choice comments about lifetime allowances etc etc and then muttered that she hadn't realised  I had taken my pension and couldn't re-enrol me anyway   

bit of explanation here McCloud judgement | NHS Employers

Lowtrawler

Flugelhorn said:

I don't know - things change all the time, but suspect something would have to be done to make it fairer. I stayed in 1995  and retired before McLoud was a thing 

the 2015 was incredibly unpopular with those of us with not long left to work, Many opted not to contribute to 2015 and went for private pensions / ISAs instead but they will have missed out on revaluation etc. 

 After I left scheme and then later took pension,  employer tried to "automatically enrol" me again... got some choice comments about lifetime allowances etc etc and then muttered that she hadn't realised  I had taken my pension and couldn't re-enrol me anyway   

bit of explanation here McCloud judgement | NHS Employers

The way the numbers work out for my wife, she is building up around £8k of employer contribution benefits per year from age 60 but losing £7k of pension payments that she would otherwise be entitled to at 60. Hence, it is not worthwhile her leaving the NHS scheme to take her 1995 benefits as she would be £1k p.a. worse off by doing so. However, it means the pension scheme is only benefitting her by that £1k per year rather than the £8k per year it should be. Effectively, at age 60 she takes a £7k benefits cut.

I followed your link to the NHS Employers site and then the flexible retirements poster. I can see from that there is still no option to take the 1995 benefits and remain in the pension scheme.

Aretnap

Dazed_and_C0nfused said:

Aretnap said:

I was somehow under the impression that the "final salary" part of the 1995 scheme now effectively means the salary you were on at the time you left the 1995 scheme and joined a new scheme.

Have I got that wrong? Is it still linked to your final salary when you leave the NHS, full stop?

(This may influence my wife's career plans for the next few years). 

Not sure where you've got that idea from!

https://www.nhsbsa.nhs.uk/changes-public-service-pensions/your-nhs-pension-after-1-april-2022

Me neither. Probably pure stupidity.  Just as well I asked.

Will look up the McLoud judgement. Thanks! 

Thrugelmir

Lowtrawler said:

Flugelhorn said:

I don't know - things change all the time, but suspect something would have to be done to make it fairer. I stayed in 1995  and retired before McLoud was a thing 

the 2015 was incredibly unpopular with those of us with not long left to work, Many opted not to contribute to 2015 and went for private pensions / ISAs instead but they will have missed out on revaluation etc. 

 After I left scheme and then later took pension,  employer tried to "automatically enrol" me again... got some choice comments about lifetime allowances etc etc and then muttered that she hadn't realised  I had taken my pension and couldn't re-enrol me anyway   

bit of explanation here McCloud judgement | NHS Employers

The way the numbers work out for my wife, she is building up around £8k of employer contribution benefits per year from age 60 but losing £7k of pension payments that she would otherwise be entitled to at 60. Hence, it is not worthwhile her leaving the NHS scheme to take her 1995 benefits as she would be £1k p.a. worse off by doing so. However, it means the pension scheme is only benefitting her by that £1k per year rather than the £8k per year it should be. Effectively, at age 60 she takes a £7k benefits cut.

The accrued pension to date continues to grow though. As it's CPI plus 1.5%.  You are underestimating the employer benefit. 

spaniel101

Its like comparing apples with pears....

This link gives a very broad description of the NHS Choice 1 Exercise and Choice 2 Exercise given to members between 2009 - 2012 ...

https://www.bmj.com/content/349/bmj.g4618

...and subsequently McCloud Judgement post 2015 - 1 April 2022.



1995 FINAL SALARY scheme accrual is on going 1/80 of salary, increasing by CPI after 55 / deferment / and during retirement.

2015 CARE scheme accrual is 1/54 of salary, increasing by CPI + 1.5% during 'active membership' / CPI deferment / CPI during retirement.

A certain amount of 'carrot' & 'sticks' is reflected in the significantly better accrual rate of 1/54 2015 scheme, and CPI +1.5% whilst an 'active' member.    

If you have 'linked' 1995 and 2015 schemes, yes you cannot continue to contribute to your 2015 having opted to draw your 1995 scheme (unless you have had a break in scheme membership of 5 years or more = 'unlinked' - in which case you can) and subsequently your 2015 would go into deferment until you decide to take it either before NPA or at (67/68 = to state pension age) with/without reduction, increasing at CPI only in deferment.   ERRBO is available at an additional monthly contribution rate  (again saves on tax/NI also) to enable you to take your 2015 scheme earlier (up to 3 years but not before 65) without reduction.


Some people will be better off, others not, depending on your choices.


If you draw your 1995 scheme at age 60, you will become ineligible to continue paying in to the 2015 scheme (unless unlinked), however you are then subsequently offered a 'NEST' (government) Pension (again, another entirely different 'money purchase' scheme - not part of NHS at all), to enable you to continue accruing approx 8% contributions (including yours & your nhs employers contributions).   This would enable you to continue employment in the nhs and not lose out on employer contributions entirely.