NHS PENSION AWARD

bkmla

My friend, who lives in Scotland and has recently retired early on the grounds of ill health, has received a letter from the Scottish Public Pensions Agency (SPPA) awarding him a lump sum and an annual pension.

He would like a qualifiied person to check that the award is coorect, in terms of the contributions he has made. Can anybody recommend such a body?

As far as I am aware the Citizens Advice Bureau (CAB) doesn't offer this service. It has a connection to a body called Pension Wise, but it only gives advice on defined contribution pensions. My friend has a defined benefit pension.

Also, can anyone offer information on the following two points?

Will the lump sum, or any part of it, be taxable?

Part of the award is ‘Partner’s’ benefits. As far as I know this is an annual pension paid to the pensioner's partner on his/her death.

As my friend has no partner and is unlikely to have a partner in the future, this component of the award appears to be of no benefit to him. In this regard, could an adjustment be made to his annual pension to compensate for this?

Flugelhorn

the lump sum in NHS pensions is not taxable 

partner's benefits (and dependants) are always quoted but if you have no partner then no-one will get the benefit, there is no amendment if you have no partner of children. 

Is he in a union? they may have people who specialise in pensions

Dazed_and_C0nfused

Will the lump sum, or any part of it, be taxable?

Assuming you are referring to the PCLS then no.

And re the point below, I would be very surprised if that also wasn't a simple no.

Part of the award is ‘Partner’s’ benefits. As far as I know this is an annual pension paid to the pensioner's partner on his/her death.

As my friend has no partner and is unlikely to have a partner in the future, this component of the award appears to be of no benefit to him. In this regard, could an adjustment be made to his annual pension to compensate for this?

Marcon

bkmla said:

My friend, who lives in Scotland and has recently retired early on the grounds of ill health, has received a letter from the Scottish Public Pensions Agency (SPPA) awarding him a lump sum and an annual pension.

He would like a qualifiied person to check that the award is coorect, in terms of the contributions he has made. Can anybody recommend such a body?

As far as I am aware the Citizens Advice Bureau (CAB) doesn't offer this service. It has a connection to a body called Pension Wise, but it only gives advice on defined contribution pensions. My friend has a defined benefit pension.

Also, can anyone offer information on the following two points?

Will the lump sum, or any part of it, be taxable?

Part of the award is ‘Partner’s’ benefits. As far as I know this is an annual pension paid to the pensioner's partner on his/her death.

As my friend has no partner and is unlikely to have a partner in the future, this component of the award appears to be of no benefit to him. In this regard, could an adjustment be made to his annual pension to compensate for this?

The contributions he has made aren't relevant unless he has made some sort of voluntary contributions over and above the basic contributions required for membership. Has he - and if so, why is he concerned that the award is wrong? Is there a particular reason he's worried? If so, maybe his union could help, assuming he was a member of course.

The tax free lump sum is just that: tax free. The paperwork should confirm the amount.

The rules of the scheme require a partner's pension to be paid should the need arise, so no, his pension can't be adjusted.

Silvertabby

The lump sum is tax free.

As this is a defined benefit scheme, the amount of contributions paid is irrelevant.  The entitlement is based on salary, service and (in this case) enhanced service appropriate to the level of ill health awarded.

In the case of the NHS, spouse's pension benefits are included as part of the overall package and cannot be exchanged for higher personal benefits.

In addition to survivor's pensions, the NHS has a 5 year guarantee period, and any benefits payable under this rule (a one-off lump sum) may be paid to anyone, including those who don't qualify for an actual survivor's pension.  Your friend's paperwork should include a nomination form for him to complete.

DRS1

Lump sum - is it tax free?  Well that can get complicated.  This page may be relevant
Maximum lump sum | NHSBSA

Partner's benefits where no partner? I doubt if your friend can get higher benefits themselves to account for the lack of a partner.  You could ask SPPA though.

bkmla

Flugelhorn said:

Is he in a union? they may have people who specialise in pensions

He was a member of Unison, but after his employment terminated back in August he resigned his membership.

bkmla

Re '...why is he concerned that the award is wrong? Is there a particular reason he's worried?'

There's nothing obvious to point to the award being wrong. The reason why I would like it to be checked is that sometimes public bodies make errors. Therefore, if at all possible, it would be a good idea to have an independent qualified person review the award.

Sarahspangles

bkmla said:

My friend, who lives in Scotland and has recently retired early on the grounds of ill health, has received a letter from the Scottish Public Pensions Agency (SPPA) awarding him a lump sum and an annual pension.

He would like a qualifiied person to check that the award is coorect, in terms of the contributions he has made. Can anybody recommend such a body?

As far as I am aware the Citizens Advice Bureau (CAB) doesn't offer this service. It has a connection to a body called Pension Wise, but it only gives advice on defined contribution pensions. My friend has a defined benefit pension.

Also, can anyone offer information on the following two points?

Will the lump sum, or any part of it, be taxable?

Part of the award is ‘Partner’s’ benefits. As far as I know this is an annual pension paid to the pensioner's partner on his/her death.

As my friend has no partner and is unlikely to have a partner in the future, this component of the award appears to be of no benefit to him. In this regard, could an adjustment be made to his annual pension to compensate for this?

He should have been receiving an Annual Benefit Statement annually while he was working in the NHS. Has he previously checked those?

Marcon

bkmla said:

Re '...why is he concerned that the award is wrong? Is there a particular reason he's worried?'

There's nothing obvious to point to the award being wrong. The reason why I would like it to be checked is that sometimes public bodies make errors. Therefore, if at all possible, it would be a good idea to have an independent qualified person review the award.

You want it checked? If your friend isn't worried - or wasn't until you raised the issue - is it fair to put him to the expense of paying someone to check the figures? 

bkmla

Re 'You want it checked? If your friend isn't worried - or wasn't until you raised the issue - is it fair to put him to the expense of paying someone to check the figures?' 

I was looking for a body that would offer this service free of charge.