NHS additional pensions and ERRBO

1970Michael

Apologies in advance for anyone not mired in NHS pensions quagmire, that while amazing value needs a degree in Economics and Finance to make sense of sometimes....

I've got approx £10000 pa in the 1995 scheme I can take at 60 (includes McCloud sum).
I made payments for an additional pension to the max of £5000 in 1995, which I get from 65 and is linked to inflation.
I'll likely have around £6000 approx in the 2015 scheme, which I can take at my SPA.

I'm not in a clinical job, so no overtime/ unsocial hours payments etc..

I'm hoping to make payments for another additional pension under the 2015 scheme, this would give me up to £6565 pa (working out what I can afford). This  starts at your SPA date. As I've hit the 40% tax my plan is to make the payments map on to what I earn over this, so making it better value.

My questions, I'm also looking at ERRBO- does anyone know if making these payments would also mean that the additional pension start date comes down, as well as my pension in the 2015 scheme? 

ERBBO payments would be around 4.6% of my salary- if this is only reduces the 2015 scheme pension date (given that I'll only have around £6000) it potentially doesn't seem worth it? 

Another option I wondered about was to compress the time period I'd pay the additional pension in for up to 60 (when I can take my 1995 pension), at which point I'll reduce my hours so making ERBBO then would be lower payments as my salary would be lower overall?

Any advice from anyone who has also grappled with getting their head round this welcome!

1970Michael

Hi, just thought I should add ERRBO is an early retirement buyout, so I can reduce the age I can take the 2015 pension by up to 3 years. 

Moonwolf

I don't know if the ERRBO brings forward the additional pension and I've had a look and cannot see. 

Logically if your percentage matches the figure on page 3 of the ERRBO guide I would say that it doesn't bring forward your additional pension, there would have to be some cost to getting the money two years earlier as you will effectively be paid for two years more.

However it is worth knowing that you can't do the full additional pension and ERRBO.   

It states this on the first page here https://www.nhsbsa.nhs.uk/sites/default/files/2021-12/Early retirement reduction buy out (ERRBO) factsheet-20211214-(V11).pdf

 "If you have bought or are buying additional pension (AP) this may limit the scope of the ERRBO agreement available. We will tell you if this applies if you make an application."

and in the AP guide: "If you are a member of the 2015 Scheme and have already commenced an early retirement buy out (ERRBO) agreement, your purchase of additional pension may be limited. There is an overall limit on the total value of additional benefits that can be bought in this Scheme by the payment of additional contributions of £6,500 annual pension. If you have purchased or are currently purchasing ERRBO or additional pension in the 2015 Scheme we must take the value of those existing purchases into account when deciding how much additional pension you can buy. On receipt of your application we will tell you whether the amount of additional pension you can buy must be limited"

https://www.nhsbsa.nhs.uk/sites/default/files/2021-04/Added Benefits-Additional Pension factsheet-20210423-(V9)_0.pdf

Moonwolf