When NHS pension uplift is applied and Total Reward Statement

Moonwolf

This is a bit niche but I wondered if someone could check my thinking,

I've been trying to work out when uplifts are applied to NHS pensions.  So for the 2015 scheme, this year's revaluation figure is 11.6% (10.1% + 1.5%).  For a deferred pension the uplift is 10.1%. 

I thought they were applied a year in arrears but now I'm guessing that these are applied from the new financial year, around 6th April.

The Total Reward Statement (TRS) is a personalised NHS statement of salary and benefits released each year as at 31st March.  This is published in August so will always be out of date.

However, because the inflation multiplier is so high this year, the fact that the TRS is dated a few days before a revaluation is applied means that pension figures are effectively around 10% less
than the real world.  Am I correct n thinking this?  I'm not saying they are wrong, just the proximity to the inflation revaluation is close enough that if feels a bit like under-reporting.

For example, I have a deferred NHS 1995 pension.  On 18th January 1998 when I left my salary was £21,892.23.  I had 9 years 269 days of pensionable service.  This equates to 9.737/80ths of the £21k or an annual pension of £2,664.68 as at 18th January 1998.

The pension multiplier for 2122 from that date is 1.789 which gives an inflation adjusted pension of £4,768.44, this is the figure as at 31/3/2023 on my just published TRS.  I think, had the TRS been set two weeks later the 2223 multiplier of 1.970 would have been used giving a figure of  £5250.06, if I was 60 today, that is the figure I would be getting.  

Is this important?  Only in the sense that I will be 60 in a little over 2 years, if I'm right my predicted pension at 60 is £500 a year more than the figure I am using at the moment.

thanks 

Moonwolf

hyubh

Moonwolf said:

I've been trying to work out when uplifts are applied to NHS pensions.  So for the 2015 scheme, this year's revaluation figure is 11.6% (10.1% + 1.5%).  For a deferred pension the uplift is 10.1%. 

I thought they were applied a year in arrears but now I'm guessing that these are applied from the new financial year, around 6th April.

Public sector pensions in deferment or payment increase on the first Monday of the tax year (with the first increase being pro-rated for the part year). Active member revaluation, in contrast, was at the start of the scheme year, which for the NHS and other schemes is 1 April. However from this year onwards the revaluation date is now aligned with the start of the tax year (6th April) to avoid unintended Annual Allowance issues.

cmundo

I left the NHS 3 years ago but my TRS doesn’t reflect inflationary uplifts since that time,  I’ve been told by NHS pensions that they are calculated and applied retrospectively when I claim at 60.  Does your TRS show these increases annually? 

Moonwolf

cmundo said:

I left the NHS 3 years ago but my TRS doesn’t reflect inflationary uplifts since that time,  I’ve been told by NHS pensions that they are calculated and applied retrospectively when I claim at 60.  Does your TRS show these increases annually? 

Mine does but I am back working for the NHS and in the 2015 scheme, I had a break of more than 5 years.

Scarum

I left NHS 2 years ago and last year the value increased with inflation. Looking at my deferred TRS statements just now they have increased by some 3.5% (average of two NHS schemes), well off the 10.1% which is a bit odd.

cmundo

Scarum said:

I left NHS 2 years ago and last year the value increased with inflation. Looking at my deferred TRS statements just now they have increased by some 3.5% (average of two NHS schemes), well off the 10.1% which is a bit odd.

Well I can’t even access my statements now as they have removed access to gov verify service, and are in early stages of rollout of the “my nhs pension” online portal. I do find the nhs pension admin side very shoddy! The advice given when you call or email can be quite ambiguous.

jeelz

Scarum said:

I left NHS 2 years ago and last year the value increased with inflation. Looking at my deferred TRS statements just now they have increased by some 3.5% (average of two NHS schemes), well off the 10.1% which is a bit odd.

As Moonwolf is pointing out your latest TRS statements are based on estimates of benefits on the 31st of March 2023 which is before the big 10.1% inflationary increase is applied. 

So you will see the increase based on September 2021 CPI increase (3.1%) but not the 10.1% increase based on September 2022 which wasn’t applied till April. The 10.1% will show up on next year’s statement.

Moonwolf

jeelz said:

Scarum said:

I left NHS 2 years ago and last year the value increased with inflation. Looking at my deferred TRS statements just now they have increased by some 3.5% (average of two NHS schemes), well off the 10.1% which is a bit odd.

As Moonwolf is pointing out your latest TRS statements are based on estimates of benefits on the 31st of March 2023 which is before the big 10.1% inflationary increase is applied. 

So you will see the increase based on September 2021 CPI increase (3.1%) but not the 10.1% increase based on September 2022 which wasn’t applied till April. The 10.1% will show up on next year’s statement.

Yes. It is *just* before the big 10.1% inflationary increase is applied.  In effect, if you retired on the 31st March 2023, by May your monthly pension would be 10.1% bigger than 1/12th the figure on your TRS.

It has taken me ages to realise this, but it was probably less important when inflation was lower.