McCloud Judgement - Moved from NHS Pension to Civil Service Pension

Bananas_1

Hi all

Hoping someone who is in a similar situation and imminently retiring or just retired may be able to help.

I and several of my colleagues were moved from the NHS 1995 pension scheme to the civil service Alpha pension as part of the TUPE process. Our contracts were moved from being NHS to civil service. We think we fall under the McCloud judgement as both are government pension schemes and understand actual figures will be given to us at the point of retirement. 

We have several unanswered questions. We have tried asking our HR department, Civil Service Pension and NHS Pension but never receive clear answers back from them.  Our main questions are:

• I plan to retire at 60 and claim my NHS pension at that point. I do not intend taking my civil service pension at the same time, know this would classify as early retirement and incur penalties, so will leave that for a further 7 years (67 being my state pension age). Will I be entitled to take the 7 years Remedy at 60 without any penalties for early retirement (my CS retirement age being 67), or do I need to take it at the same time as my remaining years in the Alpha scheme? When I do take the Remedy payment is it under exactly the same terms as my 1995 NHS pension (1/80th of the best of the last three years' pensionable pay for each year of membership in the scheme)?
• If I opt to take the Remedy payment under the final salary terms rather than the career average will I need to pay anything into it? Confused by how it can pay out in the same way as the NHS 1995 scheme when my monthly payments into this were higher than those I’ve made in Alpha since transferring over on 1 April 2015.
  
• Will we have to pay money in if we wish to move our 7 years of civil service back to the NHS 1995 scheme (many of us will want this option as it means retire at 60 rather than 67/68).

 Thank you in advance for any advice given.

Dazed_and_C0nfused

Just to clear up one thing, there are no penalties for taking Alpha at age 60.

The amount of the pension would be reduced to reflect the fact it was being paid for an additional 7 years but there is no penalty for doing that.

hugheskevi

When was the TUPE transfer, and did you transfer your NHS pension (it sounds as though you did not, but just to be sure)?

Bananas_1

hugheskevi said:

When was the TUPE transfer, and did you transfer your NHS pension (it sounds as though you did not, but just to be sure)?

TUPE transfer was in 2015. We didn't transfer our NHS pension, we all left as was and we were moved to the new civil service alpha scheme.

NHS was a final salary (retire at 60). Civil service is a career average (retire at state pension age).

Moonwolf

I'm confused.  It sounds like you have only 1995 scheme NHS pension and that this is deferred.  This will commence 60 based on your final salary at the time you left the NHS, with CPI increases.  I can't see where the McCloud judgement applies?

Bananas_1

Moonwolf said:

I'm confused.  It sounds like you have only 1995 scheme NHS pension and that this is deferred.  This will commence 60 based on your final salary at the time you left the NHS, with CPI increases.  I can't see where the McCloud judgement applies?

We've been told McCloud Judgement applies to us, it's just unclear how and when the 7 years will get paid to us.

hugheskevi

McCloud applies to you. If you have any post 1 April 2015 NHS benefits you will be offered a choice between 1995 scheme membership throughout, and an alternative of CARE scheme for the tiny bit of service after 1 April 2015. Obviously the value of these options would be very similar.

Your options in the Civil Service when you come to commence the pension will be alpha for the period between 2015-22, as you have now, and an alternative based on the scheme you would have entered had alpha not been introduced. It would be prudent to get quotes for retirement at age 60 to understand how the options compare, as some of the legacy schemes won't enhance benefits due at 60 or pay backdating if they are not claimed - they are simply forfeited until such time as a claim is made.

If you have NHS service post 1 April 2015 then your choice between legacy scheme or new scheme will have to be consistent for both schemes, eg, you couldn't choose legacy scheme for NHS but reformed scheme for Civil Service.

As Dazed_and_C0nfused says above, forget thinking about penalties for taking pension before age 67. You may well find alpha pension paid with reduction at age 60 gives a higher pension than a Normal Pension age 60 scheme paid at 60 with no reduction, due to the higher accrual rate in alpha which reflects the higher Normal Pension age.

Bananas_1

hugheskevi said:

McCloud applies to you. If you have any post 1 April 2015 NHS benefits you will be offered a choice between 1995 scheme membership throughout, and an alternative of CARE scheme for the tiny bit of service after 1 April 2015. Obviously the value of these options would be very similar.

Your options in the Civil Service when you come to commence the pension will be alpha for the period between 2015-22, as you have now, and an alternative based on the scheme you would have entered had alpha not been introduced. It would be prudent to get quotes for retirement at age 60 to understand how the options compare, as some of the legacy schemes won't enhance benefits due at 60 or pay backdating if they are not claimed - they are simply forfeited until such time as a claim is made.

If you have NHS service post 1 April 2015 then your choice between legacy scheme or new scheme will have to be consistent for both schemes, eg, you couldn't choose legacy scheme for NHS but reformed scheme for Civil Service.

As Dazed_and_C0nfused says above, forget thinking about penalties for taking pension before age 67. You may well find alpha pension paid with reduction at age 60 gives a higher pension than a Normal Pension age 60 scheme paid at 60 with no reduction, due to the higher accrual rate in alpha which reflects the higher Normal Pension age.

Thank you for your response. This clears up a few of our questions.  

Is it clear if we'll be expected to pay more money to move our 7 years of civil service back to the NHS 1995 scheme?

hugheskevi

Bananas_1 said:

hugheskevi said:

McCloud applies to you. If you have any post 1 April 2015 NHS benefits you will be offered a choice between 1995 scheme membership throughout, and an alternative of CARE scheme for the tiny bit of service after 1 April 2015. Obviously the value of these options would be very similar.

Your options in the Civil Service when you come to commence the pension will be alpha for the period between 2015-22, as you have now, and an alternative based on the scheme you would have entered had alpha not been introduced. It would be prudent to get quotes for retirement at age 60 to understand how the options compare, as some of the legacy schemes won't enhance benefits due at 60 or pay backdating if they are not claimed - they are simply forfeited until such time as a claim is made.

If you have NHS service post 1 April 2015 then your choice between legacy scheme or new scheme will have to be consistent for both schemes, eg, you couldn't choose legacy scheme for NHS but reformed scheme for Civil Service.

As Dazed_and_C0nfused says above, forget thinking about penalties for taking pension before age 67. You may well find alpha pension paid with reduction at age 60 gives a higher pension than a Normal Pension age 60 scheme paid at 60 with no reduction, due to the higher accrual rate in alpha which reflects the higher Normal Pension age.

Thank you for your response. This clears up a few of our questions.  

Is it clear if we'll be expected to pay more money to move our 7 years of civil service back to the NHS 1995 scheme?

You cannot move any service back to the NHS. Your NHS service ended in 2015 and that remains unchanged.

You will be given a choice of Civil Service schemes for the 2015-22 period, either alpha or the scheme you would have been placed in had alpha not been introduced.

Bananas_1

hugheskevi said:

Bananas_1 said:

hugheskevi said:

McCloud applies to you. If you have any post 1 April 2015 NHS benefits you will be offered a choice between 1995 scheme membership throughout, and an alternative of CARE scheme for the tiny bit of service after 1 April 2015. Obviously the value of these options would be very similar.

Your options in the Civil Service when you come to commence the pension will be alpha for the period between 2015-22, as you have now, and an alternative based on the scheme you would have entered had alpha not been introduced. It would be prudent to get quotes for retirement at age 60 to understand how the options compare, as some of the legacy schemes won't enhance benefits due at 60 or pay backdating if they are not claimed - they are simply forfeited until such time as a claim is made.

If you have NHS service post 1 April 2015 then your choice between legacy scheme or new scheme will have to be consistent for both schemes, eg, you couldn't choose legacy scheme for NHS but reformed scheme for Civil Service.

As Dazed_and_C0nfused says above, forget thinking about penalties for taking pension before age 67. You may well find alpha pension paid with reduction at age 60 gives a higher pension than a Normal Pension age 60 scheme paid at 60 with no reduction, due to the higher accrual rate in alpha which reflects the higher Normal Pension age.

Thank you for your response. This clears up a few of our questions.  

Is it clear if we'll be expected to pay more money to move our 7 years of civil service back to the NHS 1995 scheme?

You cannot move any service back to the NHS. Your NHS service ended in 2015 and that remains unchanged.

You will be given a choice of Civil Service schemes for the 2015-22 period, either alpha or the scheme you would have been placed in had alpha not been introduced.

Thank you so much, this now makes more sense.  They need to employ you!  We've been going around in circles between NHS Pensions and Civil Service Pensions with no clear answers.

Universidad

Bananas_1 said:

Thank you so much, this now makes more sense.  They need to employ you! 

Frankly we'd all be worse off here if @hugheskevi used their free time to take on another job!