NHS Pension 1995 Scheme/ 2015

ttossi

my wife is a member of the 1995 scheme, with Special Class, so she can retire @ 55. she has built up 35 years of reckonable service out of a maximum 40.
she's now 55 but the pension is not sufficient to live on. she is now paying into the 2015 scheme and expects to work for another 3-5 years

we have looked online and spoken to an advisor at work and Im still not clear, please help

As she has been transferred to the 2015 scheme, what is the impact on the 1995, I,e is it based final salary based on when she was transferred over or when she actually retires ? Reckonable service is this when she retires or when was transferred over?

Can she claim her1995 scheme now and continue working and paying into 2015 ? Can she partial retire and claim her 1995 pension and work part time paying into the 2015 pension , if so what is the impact?


thanks in advance

spaniel101

If the current pension value is not sufficient to live on, you can continue working and accruing further pension.


1995 scheme - scheme accrual has now seized - no futher 'years' credit (reckonable/calendar) can be built up.

2015 scheme - The only membership 'limit' here is you can contribute up to Aged 75 (no number of years limit). 

https://www.nhsbsa.nhs.uk/sites/default/files/2019-08/MHO Max Service-Maximum pensionable membership-20190814-(V4) .pdf


1995 scheme calculation will be based on best of the last 3 years salary, at Date of Retirement (accrual is 1/80 of final salary X Reckonable years).

https://www.nhsbsa.nhs.uk/sites/default/files/2019-11/Final Salary Linking Turning Point Presentation 2018.pdf


2015 scheme calculation is based on Actual Pensionable Pay, 1/54 accrued for each year of membership, annual revaluation is CPI + 1.5% 'active' membership.   CPI  only during deferred or pension in payment.


You cannot put your 1995 scheme into payment and continue paid membership of the 2015 scheme (unless you had a 5 year gap breaking the final salary link).   You would be auto-enrolled into the governments 'Nest' pension scheme (non NHS).




Oh...and read up on McCloud:-

https://faq.nhsbsa.nhs.uk/knowledgebase/article/KA-25794/en-us#:~:text=The Court of Appeal later,as the 'McCloud Judgement'.

tacpot12

Best advice for her is to continue working as long as she can and to try to increase her final salary (in her last three years) as this will have a big impact due to the length of service she has in the 1995 scheme, and it will also feed into the 2015 scheme and get the 1.5% boost that is added on top of CPI. 

She should also consider spending the lump sum from the 1995 scheme on covering the gap between the claiming the 1995 scheme pension and the 2015 scheme pension and/or her state retirement age. She can retire now, and claim the 1995 scheme, but leave the 2015 scheme benefits deferred. This would means that the 2015 benefits would be paid without (or with less) reduction. She can draw on both schemes now if she wants to, but the penalty for retiring early on the 2015 is much more severe. She should try to avoid drawing on either pension as long as possible, but avoiding early retirement on the 2015 scheme is more beneficial.

This document indicates the approximate reductions she can expect on early retirement for all the  NHS pension schemes: NHS Pensions factsheet template V1 (nhsbsa.nhs.uk)

If she can work till 60, she will be able to take the 1995 scheme without any early retirement penalty, and the full lump sum will only have to last 7 years to avoid her having to take the 2015 scheme benefits early.

You can get a good idea of what her lump sum will be, and hence how long it will last if it has to cover some of the difference between her income now and her income from the  1995 scheme. She should also think about ho wmuch money she might save by not going to work. Often there are costs of travel, meals and other employement related expenses that will drop away when she retires.

McCloud might increase the lump sum and add a significant amount of service (years) to the 1995 scheme at the expense of losing the 2015 scheme pension. She should be sent information to allow her to decide which is the better option for her. As she wants to retire before she is 61, I think it likely that having as much of her service in the 1995 scheme is likely to be better for her, but she needs to wait to see the numbers.   

Stubod

I have recently been through the "pain" of trying to claim my 2008 nhs pension, and continue to work and pay into the 2015 scheme for which I am also a member.

If you are in the 1995 scheme I don't think you can retire and return and continue to pay into any NHS scheme, although you can contribute to the "nest" scheme. Always worth a call to the NHS Pensions member help line, but be prepared for a 30min wait to get answered.

Originally I was told I could not claim my 2008 pension and continue to work and pay into the 2015 sceme, but after 2 days and 4 other NHS pension advisors + quoting their website I was finally assured that I could!

I believe the 1995 scheme is based on your pay during the last few years of employment.

NB My OH had been taking their NHS pension for 3 years when they wrote to advise us that both the monthly pension and the lump sum had been overpaid and wanted us to pay it back within 2 weeks! Despite repeated requests they were unable to provide any figures to support this request.

There is a compulsory lump sum included in the 1995 scheme which is tax free and is equivalent to 3 years pensionable pay. The general advice, (assuming health is OK), is to only ever take the minimum lump sum. (Unlike the 2008 and 2015 schemes a lump sum is compulsory for the 1995 scheme).

Bobinyorkshire

‘…… If she can work till 60, she will be able to take the 1995 scheme without any early retirement penalty……’ If she has special class status, she will have no penalty at 55. She would however accumulate more pension in the 2015 scheme if she stays working until 60. She would also keep the ‘final salary link’ by continuing to work, which will increase the calculation used for her 1995 scheme if her salary increases. Not sure what the current status is re taking 1995 pension and continue paying into 2015 scheme. I thought that was not possible, only because when I started a new job I was enrolled into NEST when they thought I’d started taking my 1995 pension (I’d hadn’t started taking my pension and it was reversed). I have also had conflicting advise when phoning the pension team too, as I have 2 periods of protected pay. This was eventually clarified after a formal complaint and I now have that information in writing. It seems incredible how difficult it is to get an accurate estimates in advance (if the TRS is not available) bearing in mind the decision to retire if largely based on these figures. I suggest doing the maths independently if possible and comparing this to the estimates, only if it’s to ensure the figures are in the right ball park

Blue_Butterfly

I retired from the NHS 1995 scheme in the summer of 2015 and wasn't allowed to rejoin an NHS pension scheme only NEST. An important issue I had was the earnings margin rule. Whilst I was under 60 if my NHS earnings + NHS pension were greater than my pre retirement earnings the difference would be clawed back from my pension. If you earn £30,000 pa gross pre retirement, then got a pension of £15,000pa plus £16,000 pa gross earnings you would have to pay £1000 back to NHS pensions! It only applies to NHS employment, you can work for anywhere else without any limits including nursing agencies or private hospitals. The rule ceases to apply on your 60th birthday.

spaniel101

I retired from the NHS 1995 scheme in the summer of 2015 and wasn't allowed to rejoin an NHS pension scheme only NEST. An important issue I had was the earnings margin rule. Whilst I was under 60 if my NHS earnings + NHS pension were greater than my pre retirement earnings the difference would be clawed back from my pension. If you earn £30,000 pa gross pre retirement, then got a pension of £15,000pa plus £16,000 pa gross earnings you would have to pay £1000 back to NHS pensions! It only applies to NHS employment, you can work for anywhere else without any limits including nursing agencies or private hospitals. The rule ceases to apply on your 60th birthday.

1995 scheme NHS 'Special Class/MHO abatement' is currently suspended until 31/03/2025:

https://www.gov.uk/government/consultations/nhs-pension-scheme-proposed-amendments-to-continue-the-suspension-of-restrictions-on-return-to-work



There is no 'abatement' for any standard Actuarial Early Retirement prior to NRA  (no special class/mental health officer status).