NHS Pension 2015

MEEKUS

Hi
My wife has recently joined the NHS as a mental health nurse.

We are currently looking into her pension and she is part of thr 2015 scheme.

What we don't understand is I believe it is an DB scheme, but money gets deducted from her payslip for a pension. It is £207 a month. Why is that?

Dazed_and_C0nfused

MEEKUS said:

Hi
My wife has recently joined the NHS as a mental health nurse.

We are currently looking into her pension and she is part of thr 2015 scheme.

What we don't understand is I believe it is an DB scheme, but money gets deducted from her payslip for a pension. It is £207 a month. Why is that?

Because that is how most modern DB schemes work.

Say her salary is £30,000 and she pays the £2,484 in pension contributions.  That is pre tax relief so the real cost is likely to be just £1,987 (£165.60/month) in reduced take home pay.

In return she earns a pension of £555.  Which has a generous in service revaluation rate of CPI + 1.5% 😊

She is in a pension scheme that a lot of people outside the NHS wish they could have.

Flugelhorn

MEEKUS said:

Hi
My wife has recently joined the NHS as a mental health nurse.

We are currently looking into her pension and she is part of thr 2015 scheme.

What we don't understand is I believe it is an DB scheme, but money gets deducted from her payslip for a pension. It is £207 a month. Why is that?

you do have to pay for DB schemes!

see page 6 https://www.nhsbsa.nhs.uk/sites/default/files/2024-05/2015 Members Guide (V13) 05.2024.pdf

the 2015 scheme allocates 1/54th of salary (not the same as the £220 a month she is paying - which is a contribution to the scheme) -this 1/54th would be paid out every year at retirement - the amount is is revalued by CPI + 1.5% each year going forward and each year adds another 1/54th and so on

crv1963

Her deduction bears no relationship to what she will get. It is a percentage deduction to pay existing pensioners, with a promise that when it is her turn she will get 1/54th of her salary added each and every year to her eventual pension this is uprated annually by 1.5% plus CPI.

There are other benefits- six pay 6 months full pay, 6 months half pay, death in service of twice annual salary and a survivors pension of roughly one third of what her pension would have been.

Couple of points these additional benefits arrive after two years membership of the scheme and her TRS won't show her pension accrued until next year as it is always a year behind actual pension forecast.

SacredStephan

crv1963 said:

There are other benefits- sick pay 6 months full pay, 6 months half pay... 

I'm not sure that this is a benefit of the pension scheme. Doesn't it apply to all employees whether in or out of the scheme?

Aretnap

Defined benefit doesn't mean that it's free. Scheme members pay a "contribution" for membership of the scheme, though as it's an unfunded scheme the contribution doesn't actually go into a fund as such. Current NHS pensions are paid by a combination of current members' contributions and government/taxpayer funding - more of the latter than the former.

Scheme membership isn't compulsory so she could save herself the £207/month by opting out. It wouldn't be a good idea though, as the value of the pension benefits she gets from being a member of the scheme will be many times the contribution that she pays 

crv1963

SacredStephan said:

crv1963 said:

There are other benefits- sick pay 6 months full pay, 6 months half pay... 

I'm not sure that this is a benefit of the pension scheme. Doesn't it apply to all employees whether in or out of the scheme?

I may well be wrong but I was informed by Pension Officer this is a scheme benefit.

Flugelhorn

crv1963 said:

SacredStephan said:

crv1963 said:

There are other benefits- sick pay 6 months full pay, 6 months half pay... 

I'm not sure that this is a benefit of the pension scheme. Doesn't it apply to all employees whether in or out of the scheme?

I may well be wrong but I was informed by Pension Officer this is a scheme benefit.

you get the sick pay whether you are in the pension scheme of not - also note takes a bit of time to get to 6 months full / six months half 

MEEKUS

Ah I see. Thanks for the replies, I always thought DB pensions were totally free - I didn't realise there was such cost. Like you all said, it would stupid to save the £207 and opt out. Thank you again everyone 

Flugelhorn

MEEKUS said:

Ah I see. Thanks for the replies, I always thought DB pensions were totally free - I didn't realise there was such cost. Like you all said, it would stupid to save the £207 and opt out. Thank you again everyone 

never opt out of the NHS pension!!! you get far more out of it than you had deducted from your salary 

MX5huggy

@MEEKUS your wife should investigate transferring in any other previous pensions she has, thus can only be done during the first year nhs employment. She needs to get a quote then she can decide. There’s not much point thinking about it until she has a quote.