Can someone help explain transfering into NHS?

MakingUpGround

I have a transfer figure to transfer in I'm trying to understand. 
Its a private pension worth about 15.5k. 
I have been offered 4 years worth of transfer. I'm part time admin, I think i build up about £225 pension per year. I'm only in the 2015 scheme. 
So does this mean they are offering £900 per year? 
Thank you 

MX5huggy

4 years worth seems a funny way of putting it. It should be a figure. If it’s £900 pension that means they will pay you £900 per year from your set retirement age. This is index linked so will increase with inflation (it maybe CPI +1.5% as per main benefits or just CPI as a transfer). You can take it earlier but will get less per year but for more years.

Annual pension of £225 says your paid £12150 per year (because NHS pension is accrued at the rate of 1/54ths).

I would take the offer if it is £900, you won’t have the chance to buy guaranteed retirement income again. 

JoeCrystal

MakingUpGround said:

I have a transfer figure to transfer in I'm trying to understand. 
Its a private pension worth about 15.5k. 
I have been offered 4 years worth of transfer. I'm part time admin, I think i build up about £225 pension per year. I'm only in the 2015 scheme. 
So does this mean they are offering £900 per year? 
Thank you 

What does the paperwork say specifically? As MX5huggy say, it seems odd that they offered years since it is normally it is fixed income you are buying after all. Always ask to double-check and clarify, do not assume anything about this.

MakingUpGround

The paperwork is more confusing!  yes you are correct re my annual salary at around 12.15k. 
But if I take this and my husband survives me he only gets a 1/3, whereas he'd have all the private pot left over? 
That's my biggest worry as he has nothing above state pension at the moment 

Yes, it says it increases by Treasury Orders plus 1.5%
I've only been with the NHS for 6 months so 4 years is not my existing membership 

hyubh

MakingUpGround said:

Yes, it says it increases by Treasury Orders plus 1.5%
I've only been with the NHS for 6 months so 4 years is not my existing membership 

The 'pensionable membership' figure quoted isn't very material as it doesn't relate to actual pension, just if there's any subsidiary benefit where eligibility depends on length of membership.

For a 'non-Club' transfer in like yours (i.e. you aren't transferring in from another public sector scheme), the transfer value purchases you notional pensionable pay to go with your actual pensionable pay from your first year in the NHS scheme. Given the NHS scheme's accrual and revaluation rates, this means from a CETV of £15902.72, you are purchasing an annual pension of 54977.43 x 1/54 = £1,018.10 pa that rises by CPI+1.5% on each 1st April while you remain an active member of the scheme, then by CPI at the start of each April once you are not. So were you to be 20 years an active member, that £1018.10 pa would have become £1,371.23 in today's money by the end, stay 30 years and it would become £1,591.37 in today's money,

But if I take this and my husband survives me he only gets a 1/3, whereas he'd have all the private pot left over?

We're talking about two very different things, a guaranteed annual income for life (indeed one that will increase by inflation each year) vs. a pot of money. If you were to die before the scheme's normal retirement age, then the survivor pension would also be 33.75% of the notional tier 2 ill health pension, not just 33.75% of your pension accrued and revalued to date.

hyubh

JoeCrystal said:

MakingUpGround said:

I have a transfer figure to transfer in I'm trying to understand. 
Its a private pension worth about 15.5k. 
I have been offered 4 years worth of transfer. I'm part time admin, I think i build up about £225 pension per year. I'm only in the 2015 scheme. 
So does this mean they are offering £900 per year? 
Thank you 

What does the paperwork say specifically? As MX5huggy say, it seems odd that they offered years since it is normally it is fixed income you are buying after all. Always ask to double-check and clarify, do not assume anything about this.

The presentation follows how the scheme regulations specify the nature of the credit purchased by a non-Club transfer in (https://www.legislation.gov.uk/uksi/2015/94/regulation/143/made). Of course the statement could go beyond that, however I suppose from a presentational point of view giving an annual pension could be considered slightly misleading given the active member revaluation rate is important in determining the credit's final value.

That said, I would still show it personally, in the same way it was common to show the immediate impact of a reckonable service credit back in the final salary pension days...

MakingUpGround

Thank you both, your insights help me make more sense of it. 

I possibly have a different local government pension (very small) to transfer in as well. 
I think I've realised if I didn't go back to local government employment within 5 years it automatically refunds me my contributions. At the moment it's in deferment and not increasing at all annually. 

Will that change any of the above transfer? 

hyubh

MakingUpGround said:

Thank you both, your insights help me make more sense of it. 

I possibly have a different local government pension (very small) to transfer in as well. 
I think I've realised if I didn't go back to local government employment within 5 years it automatically refunds me my contributions. At the moment it's in deferment and not increasing at all annually. 

Will that change any of the above transfer? 

That would be a separate, Club transfer in. With a Club transfer, you keep the revaluation rate of the previous scheme, which is just CPI for the LGPS (compared to the NHS scheme, the LGPS has a better accrual rate instead of the better revaluation rate).

Silvertabby

MakingUpGround said:

Thank you both, your insights help me make more sense of it. 

I possibly have a different local government pension (very small) to transfer in as well. 
I think I've realised if I didn't go back to local government employment within 5 years it automatically refunds me my contributions. At the moment it's in deferment and not increasing at all annually. 

Will that change any of the above transfer? 

A refund is only on the cards if you have less than 2 years membership (the vesting period).  A transfer to the NHS is a much better option than taking a refund of your own contributions (less tax).

Transferring your LGPS benefits into the NHS won't stop or affect your private pension transfer in any way.

Andy_L

MakingUpGround said:

Thank you both, your insights help me make more sense of it. 

I possibly have a different local government pension (very small) to transfer in as well. 
I think I've realised if I didn't go back to local government employment within 5 years it automatically refunds me my contributions. At the moment it's in deferment and not increasing at all annually. 

Will that change any of the above transfer? 

It will be increasing in line with (cpi) inflation

MakingUpGround

Andy_L said:

MakingUpGround said:

Thank you both, your insights help me make more sense of it. 

I possibly have a different local government pension (very small) to transfer in as well. 
I think I've realised if I didn't go back to local government employment within 5 years it automatically refunds me my contributions. At the moment it's in deferment and not increasing at all annually. 

Will that change any of the above transfer? 

It will be increasing in line with (cpi) inflation

Thank you, yes, just realised the headline figure is what it started at, turn over to smaller print for what it is now! 
Gosh pensions are sooo complicated