NHS pension

bshan

I have recently returned to NHS employment after approximately 17 years away working in the education sector under the Local Government Pension Scheme. I have been offered the chance to either retain the benefits accrued under the 1995 Scheme or transfer them on CETV basis to the 2015 one. 
I am certain that I will not retire prior to the state pension age (67) and have been provided with the following figures about the benefits earned under the 1995 Scheme:
 
Pensionable earnings: £129,271.40
Final pensionable pay: £35,798.44
Pensionable membership: 7 years and 284 days
 
Entitlement at date of calculation under the 1995 Scheme:
Pension: £5631,51 (3480 at date of leaving)
Lump sum: £16,894.54 (10441 at date of leaving)
 
Under a transfer to the 2015 Scheme the benefits are estimated as a yearly pension of £7768.72 or £419,511 in pensionable earnings credit with a qualifying membership of 10 years and 292 days.
 
Seeing as the pension seems to be around £2,000 higher and I am sure that I will not retire until the state retirement age are there any other benefits to remaining under the old scheme? Any advice would be greatly appreciated.”

Marcon

bshan said:

I have recently returned to NHS employment after approximately 17 years away working in the education sector under the Local Government Pension Scheme. I have been offered the chance to either retain the benefits accrued under the 1995 Scheme or transfer them on CETV basis to the 2015 one. 
I am certain that I will not retire prior to the state pension age (67) and have been provided with the following figures about the benefits earned under the 1995 Scheme:
 
Pensionable earnings: £129,271.40
Final pensionable pay: £35,798.44
Pensionable membership: 7 years and 284 days
 
Entitlement at date of calculation under the 1995 Scheme:
Pension: £5631,51 (3480 at date of leaving)
Lump sum: £16,894.54 (10441 at date of leaving)
 
Under a transfer to the 2015 Scheme the benefits are estimated as a yearly pension of £7768.72 or £419,511 in pensionable earnings credit with a qualifying membership of 10 years and 292 days.
 
Seeing as the pension seems to be around £2,000 higher and I am sure that I will not retire until the state retirement age are there any other benefits to remaining under the old scheme? Any advice would be greatly appreciated.”

Are you sure these figures are correct? Pensionable Earnings and Final pensionable pay are radically different.

ggmf

"I am certain that I will not retire prior to the state pension age (67)"

You do not state how old you are, but you are aware that the 1995 scheme is payable from age 60? Transferring to the 2015, will I believe, lock you in until whatever your state pension age is.

bshan

I am 56 now and hoping to work till 67

ggmf

What does your TRS statement show for the 1995?

Personally (depending on the TRS figures), I'd leave the 1995 where it is, it will still increase with the annual uplift. Whilst you may currently wish to work until 67, you may well change your mind or be unable too, and wish that you taken the 1995 when it was due.

If you are married, then the survivor pension is 50% in the 1995, the 2015 is (or was) 33.75%. However check these figures are current, do your own calculations and research. 

facade

The 1995 scheme is more generous, which is why they killed it and created the 2015 one.

The scheme prior to that was even better.

I'd leave it, and look at taking it age 60- you can still work as long as you don't exceede your salary of reference, which will be the average of your salary for your last 3 years in teaching, compounded by all that lovely inflation in the intervening time.

saucer

facade said:

The 1995 scheme is more generous, which is why they killed it and created the 2015 one.

The scheme prior to that was even better.

I'd leave it, and look at taking it age 60- you can still work as long as you don't exceede your salary of reference, which will be the average of your salary for your last 3 years in teaching, compounded by all that lovely inflation in the intervening time.

It is not strictly true that the 1995 scheme is more generous. In this case the OP may well be better retaining their 1995 benefits but for people starting out, and intending to work beyond the 1995 NRA of 60, the 2015 will result in a bigger pension based on a generous accrual rate but a later retirement. 

I’d also correct you that the 1995 it is not based on the average of 3 years but the best of the last 3 years. 

As ggmp suggests the OP will need to do some more research, factor in inflation to the 1995 bit against how the pension would grow in the 2015 and the additional benefits that come with the 1995

Dazed_and_C0nfused

facade said:

The 1995 scheme is more generous, which is why they killed it and created the 2015 one.

The scheme prior to that was even better.

I'd leave it, and look at taking it age 60- you can still work as long as you don't exceede your salary of reference, which will be the average of your salary for your last 3 years in teaching, compounded by all that lovely inflation in the intervening time.

Got to agre with @saucer on this, not sure how you can see 1/80th as being more generous than 1/54th 🤔.

And the 1995 scheme is based on final salary, which I'm sure the majority of NHS staff would say is being restrained by government policy.

Whilst the 1/54th accrued under the 2015 scheme will get a 12.6% increase next April 😊

The 1995 scheme does have other advantages, particularly being able to take it at 60.  But in monetary terms I don't see it as more generous.

bshan

So sorry if my figures are out! Basically I’m going back into nursing next year after 17 years spent in the education system as my nursing salary will be higher than a teaching assistant salary. I have spent a lot of time trying to decide whether to transfer over to the new scheme and seemed professional advice but there doesn’t seem to be a clear answer. I don’t think I will be able to afford to retire until I’m 67. 

ggmf

bshan said:

 I don’t think I will be able to afford to retire until I’m 67. 

No, but health or any other current unknown may dictate that you do. Do you have an up to date TRS? You can still take your 1995 when it is due and continue working or reduce hours.

facade

bshan said:

So sorry if my figures are out! Basically I’m going back into nursing next year after 17 years spent in the education system as my nursing salary will be higher than a teaching assistant salary. I have spent a lot of time trying to decide whether to transfer over to the new scheme and seemed professional advice but there doesn’t seem to be a clear answer. I don’t think I will be able to afford to retire until I’m 67. 

You can start your teachers pension at 60, and use the income to reduce your hours, it is more generous because you have all those extra years when it is paying out, but still increasing with inflation.

I don't see any reason not to claim it at 60, it increases with inflation at the same rate whether it is paying out or not.

You don't want to be working your row out at 66 hoping to live long enough to claim your pension.

Just doing the sums isn't the whole picture. I couldn't cope with the stress of working full time after 55 as a teacher so I went part time and used some savings for a few years, then started my pension early and finished working at 60.

My regret is not finishing at 55.