NHS Pension Revaluation

Xenocyde

Hi,

I've been in the NHS Pension scheme since 2016 and still an active member. I wondered if anyone knew whether the revaluation figure should show each year on the total reward statement?

As an example, my 2019 statement for the 2019 year says:

Pension earned = £704.66
Revelation = 3.9

Fast forward to the 2022 statement, the 2019 column still says exactly the same. Is it meant to show the figure revalued since 2019? 

Hope that makes sense. If anyone can compare their statements that would be great.

Thanks

spaniel101

TRS updates each year mid August, 18 months behind.


For example, the current August 2022 update shows:

* Revaluations up to and including 1st April 2021.   
* Plus, Pension Accrual Only up to end March 2022  (because revaluation takes place afterwards on (now) 6th April each year)


In your example above:

Pension Accrued 2018-2019 = £704.66
Accrual Only, viewable on TRS August 2019 statement.

CPI September 2018 = 2.4%
Plus + 1.5% 
= Total Revaluation Applied 1st April 2019 = 3.9% (for Year 1)

Updated and viewable on TRS statements at the earliest, August 2020.


Subsequent years 2, 3, etc are Revalued each year on 1st April at the appropriate previous September CPI + 1.5%, that is each Individual Pension Accrual (the statements do not show continuous yearly revaluation of each, you have to figure this out for yourself, they only show your Initial base Accrual for that year).


The TRS 2015 statements leave a lot to be desired.    The Pension Accrued and the Revaluation 'rate' in my view, should be shown on entirely different tables.  They do not correspond with each other in the way that they have set them out at all.


I have managed to do a rolling 'colourful' spreadsheet that corresponds with each years revaluation and now achieve to the penny. 


This August 2023 TRS update will show:

Pension Accrual up to 2021-2022
Revaluation up to and including 1st April 2022
Plus 2022-2023 Pension Accrual only (revaluation 6th April 2023, will show on next years August 2024 update) 

Xenocyde

spaniel101 said:

(the statements do not show continuous yearly revaluation of each, you have to figure this out for yourself, they only show your Initial base Accrual for that year).

Ah right yeah that's annoying. So there's not really a way to work out your true pension value with revaluation unless you work it out manually like you have done then I guess

spaniel101

Yes, they will not show you each years individual revaluation (just the rolling revaluation Total up to the previous April), although as I say my spreadsheet works perfectly now.   I've added 6th April 2023 revaluation (10.1% + 1.5%) to it but I know this will not show 'live' on TRS until August 2024 - along with my 2023/24 Accrual only.

The right hand side of the table is really just a guide for the Revaluation % used for that year alone, along with your base Accrual for that year alone on the left hand side.   

Xenocyde

spaniel101 said:

Yes, they will not show you each years individual revaluation (just the rolling revaluation Total up to the previous April), although as I say my spreadsheet works perfectly now.   I've added 6th April 2023 revaluation (10.1% + 1.5%) to it but I know this will not show 'live' on TRS until August 2024 - along with my 2023/24 Accrual only.

The right hand side of the table is really just a guide for the Revaluation % used for that year alone, along with your base Accrual for that year alone on the left hand side.   

Yes the way they do the revaluation process isn't explained very clearly. I've just been doing some calculations and it looks like they just potentially revalue your entire pot once per year by the revaluation figure. Then all the calculations on the statement would add up. I was thinking with high inflation, revaluating this years pension pot by over 10% each year until retirement sounds too good to be true. I predict my 2023 pot will close to £1000. Would i really benefit from an extra £100 a year into that pot for the next 20-30 years worth or working?

Example:

On my 2021 statement my pension value was £3507.27 and the revaluation percentage for 2021 was 2%.

Add 2% onto £3507.27 and you get £3577.41

On my 2022 statement my pot for 2022 was £921.56

Add £921.56 to £3577.41 and you get £4498.97. This figure is identical to what the 2022 pension value is on my 2022 statement.

i.e. This implies that the pots are still getting revalued but only in their entirety at the most recent revaluation figure rather than historic ones individually on each pot?

spaniel101

Yes.  Each year accrued, is revalued by the previous years Relevant September CPI + 1.5%.   Giving your subsequent Total Annual Pension Accrued to date (not 'pot').

Each TRS statement Total Pension accrued, will have Revaluation up to the April (of the previous year) plus the most recent last year accrual only (as this last year is not revalued until after the statement is produced), as in your last example above.

Your 2021/2022 earned accrual of £921.56 was revalued on 1st April 2022  (after 31/03/2022 TRS statement was produced and viewable August 2022).   Thus, you wont be able to 'view' your 1st April 2022 revaluation until August 2023 TRS update for 2021/2022 earned accrual.