NHS pension query - effect of reducing houra

techwatcher

Hi,

Asking on behalf of a friend. She has worked full time as a nurse in the NHS since 1986 and is a member if the NHS Pension Scheme.

She is considering reducing her working hours and is interested in how such a move would edict her pension?

Are the 1995/2008 Scheme and the 2015 Scheme considered as separate schemes? Would a reduction in working hours now just affect the benefits accrued under the 2015 Scheme?

Any insights would be much appreciated.

Dazed_and_C0nfused

techwatcher said:

Hi,

Asking on behalf of a friend. She has worked full time as a nurse in the NHS since 1986 and is a member if the NHS Pension Scheme.

She is considering reducing her working hours and is interested in how such a move would edict her pension?

Are the 1995/2008 Scheme and the 2015 Scheme considered as separate schemes? Would a reduction in working hours now just affect the benefits accrued under the 2015 Scheme?

Any insights would be much appreciated.

Yes.  The 1995 and 2008 schemes are final salary and it is the full-time equivalent salary that counts.

https://www.rcn.org.uk/Get-Help/RCN-advice/nhs-pension

Purplelady65

For the purpose of calculating the pension the full-time salary is used but the service is compressed. Additional service can’t now be added to the 1995 or 2008 schemes so when the pension is calculated for these pensions they will calculate it on the whole time equivalent salary (assuming the final salary link applies) when your friend retires and for the 1995 scheme will calculate the best year from the previous 3 years. For the 2015 scheme if your friend had 5 years service in the pension scheme and then reduced her hours to half time if she then worked for five years this would be the equivalent of 2.5years service so a total of 7.5 years compared to 10 years if she continued to work full time. 

techwatcher

Purplelady65 said:

For the purpose of calculating the pension the full-time salary is used but the service is compressed. Additional service can’t now be added to the 1995 or 2008 schemes so when the pension is calculated for these pensions they will calculate it on the whole time equivalent salary (assuming the final salary link applies) when your friend retires and for the 1995 scheme will calculate the best year from the previous 3 years. For the 2015 scheme if your friend had 5 years service in the pension scheme and then reduced her hours to half time if she then worked for five years this would be the equivalent of 2.5years service so a total of 7.5 years compared to 10 years if she continued to work full time. 

Many thanks for the very clear explanation - appreciate it. I will pass this on to my friend.

rockers

It sounds like your friend is in the Special Class status of NHS pension.

For Mrs Rockers, this meant that there was little difference between taking her pension at age 55 or age 60.; so she took it at age 55.

There were two options of either a higher lump sum and lower pension or lower lump sum and higher pension.
She chose the former.
Originally, if she chose to take the pension but continued to work for the NHS then her pension would be counted as part of her salary but they have changed this so anything she earns is in addition to her pension.

So she continues to work for NHS but reduced her hours from 30 hours per week to 22.5 hours per week.

There is also the Mccloud judgment on her remaining pension. I'm not sure yet if this has reached a conclusion but here is some information from NHSBA from 2022.

I have provided information below how the 1995 Section and 2015 Scheme Pension is calculated.

Each pension pot is calculated differently. 

Read how an NHS pension is calculated for officer members of the 1995 Section on our online knowledge base.

In a Career Average Revalued Earnings (CARE) scheme, your pension is based on your pensionable pay throughout your career.

Your pension is calculated for each year separately then increased by a set revaluation rate which is linked to inflation.

Read more on our online knowledge base.

If you’re affected by the changes to public service pension schemes, your service between 1 April 2015 and 31 March 2022 will be placed into your legacy scheme. This will happen in October 2023.

When it’s time for you to claim your pension benefits, you’ll be asked if you want to receive legacy scheme or reformed scheme pension benefits for your service between 1 April 2015 and 31 March 2022.

We’ll contact all affected members directly when action needs to be taken.

Read more about the changes to your pension on our website.