2015 NHS options Confusion

buyhighselllow

My OH is in the process of taking her NHS pension ( early retirement 57yo).. retires end of this month but is doing retire and return, so will rejoin the 2015 scheme)

She had a pension statement in June that outlined her 1995 benefits and 2015 benefits as she was forced across in 2015. 

On applying for her pension she elected for maximum pension/minimum LS from both schemes

However she has now received a letter " Retirement Benefits ( AWTC1(SLSP))" relating to her 2015 benefits BUT only related to earnings and pension earned for years ending 2023 and 2024.

it then asks for her to decide wrt these if she wants 

Pension Payment for Life £213/yr
One off Payement No PCLS ..total LS payment £5392
One off Payment Maximum PCLS £3466

If no reply within 28 days Pension Payment for Life will be deferred option

The amount of pension earned for 2023 ties in with her earlier statement. 

So..why are we being asked to decide like this about the last 18 months of her 2015 membership ?

Which is the best option ?

If we make a decision on this 18 month period, will it affect her 1995 review wrt McCloud Remedy..

its a bit annoying to be thrown these extra options with no real explanation or context. My gut feeling is just to leave things as they are, get max ( albeit actuarily reduced 95 and 2015 and see what the McCloud remedy do for the figures in due course)

Afterthought : Could this tie in with the due process of the Mcleod remedy as its for all contributions after April 2022 when 2015 become the default scheme. Its a small amount in terms of contributions and I suspect  when her 1995 recalculation is done ( April 2024 onwards ? ) it will be better than a pension split into 1995 plus 7 years in 2015. 

GrubbyGirl_2

Sorry I can't answer your question but have you told them that she intends to continue paying into the 2015 section and therefore don't wish to touch it at all?

buyhighselllow

After further investigation, its down to Mcleod remedy. All pension except last 18/12 paid as 1995. So the remaining 18/12 that was 2015 can either be paid as £213/yr or a lump sum of 5K. 

swindiff

If it were me I think I would take the lump sum.  Assuming she will be paying 20% tax on her pension that £213 is only worth £170 in her pocket.  That makes the breakeven point nearly 32 years.

LightFlare

At retirement (if eligible) the years 2015 to 2022 can be taken as either 1995 OR 2015 due to the McCleod judgement

Anything from 2022 onwards has to be taken within the 2015 scheme which allows for sacrifice of annual pension for an increased lump sum

Personally, if she is only 57 and is planning on resuming work, then I would leave anything after 2022 in the 2015 scheme (if that is allowed) and continue to contribute to that.

The reduction for taking the 2015 portion effectively 10years early will attract an approx 40%+reduction in value