NHS Pension Scheme

A brief overview of NHS Pension Scheme

• Guide to the Scheme

• Eligibility

• Contributions

• Age Retirement Benefits

• Ill Health Retirement Benefits

• Voluntary Early Retirement

• Draw Down

• Life Assurance and Family Benefits

• Increasing Your Benefits

• Transfer of Pension Rights

• Refunds

• A starter pack is given to all joiners including the guide to the NHS Pension Scheme

• You are automatically entered into the NHS Pension Scheme

• Two Sections of the Scheme from 01.04.08

• 1995 Section – Based on 80ths for scheme members at 31.03.08 & re-entrants with less than 5 years break in membership.

• 2008 Section – Based on 60ths for all new starters from 01.04.08 & re-entrants with 5 years or more break in membership.

• Both sections provide index linked pensions

• Both sections are based on Final Salary

• Eligibility from ages 16 – 75 (although Trust retirement age is 65)

• Automatic membership

• Choice to Opt out of the scheme (SD 502)

• New contribution rates

• New rates commenced 1 April 2008 and are same for both Sections

• Contributions linked to your earnings

• Rate of contributions dependant on full time earnings, or equivalent amount if working part time

• Employer will continue to pay 14%

New Contribution Rates

•Officer and Practice Staff Scheme members who have had a change in circumstances on, or after, the 1 April 2009 or who are new starters.•The annual pensionable pay will be uplifted with AfC pay awards.

TierAnnual Pensionable Pay (full time

equivalent) – 2009/10Contribution Rate in

2009/10

1 Up to £20,709 5%

2 £20,710 to £68,392 6.5%

3 £68,393 to £107,846 7.5%

4 £107,847 plus 8.5%

• Age Retirement Benefits

• Life Assurance Cover

• Family Benefits

• Ill Health Retirement Benefits

• Redundancy Benefits

• Voluntary Early Retirement Benefits

• Normal retirement age is 60 for 1995 section (55 for special classes) & 65 for 2008 section

• 1995 Section – Pension & Lump Sum based on best of last 3 years pensionable pay with option to take an increased lump sum by giving up part of the pension

• 2008 Section – Pension based on average of the best 3 consecutive years in the last 10. No automatic lump sum but an option to give up some of the annual pension in exchange for a lump sum (forego £1 of annual pension (taxable) for every £12 of Lump Sum (non taxable) within stated limits)

Special Class Status

1995 section only;• Special class status is given to the following groups providing they were

in these groups prior to 06.03.95 and they have not had a break in membership of 5 years or more. • Female Nurses• Health Visitors• Midwifes• Physiotherapists• Male Nurses (membership from 17/5/1990 only)

• If you have special class status your Normal Retirement Age is 55.

For Both Sections:

• Must have 2 years pensionable service to qualify

• 2 Tier arrangement

• Tier 1 – Unable to carry out current duties – can receive pension benefits accrued without enhancement – subject to abatement if re-employed in NHS

• Tier 2 – Unable to engage in any regular employment – can receive an enhanced pension & would be subject to abatement

• Voluntary Early Retirement (VER) is available to anyone over the minimum retirement age providing their pension exceeds the Guaranteed Minimum Pension (GMP)

• 1995 Section – Minimum retirement age is 50 except for members who joined the Scheme on or after 06.04.2006, the minimum retirement age will increase from 50 to 55 from 06.04.2010

• 2008 Section – Minimum retirement age is 55

• Actuarial reduction in both sections

2008 Section Only;

• Option to take partial retirement from age 55 and take some of your benefits if you reduce your pensionable pay by 10% by;• Reducing working time or • switching to a less demanding role

• You can take between 20% and 80% of your pension entitlement and continue to build up future membership

• The benefits would be reduced if they are taken before your 65th birthday

• Option to drawn down benefits twice before retiring completely

• From 1st day of joining a Death Gratuity Lump Sum is payable equal to 2 years pensionable pay

• Survivor benefits for member’s with over 2 years membership

• Widow(er)s and Civil partner’s automatically recognised for benefits.

• Partner’s must be nominated for Lump Sum (DB2) & Pension (PN1) – (Forms available from myself and on the website. www.nhsbsa.nhs/pensions). Financial interdependency for 2 years must be proven on the death of the member.

• Survivor’s benefits;

• Initial Survivor’s pension paid for 6 months through payroll for all members.

• Widow’s continuous pension based on all membership.

• Widower’s/Civil partner’s/Nominated partner’s continuous pension based on membership from 06.04.1988.

• Dependant/Child benefits may be payable

• Dependant child allowance paid until age 23 (subject to dependency rules).

• Additional Pension – Increases scheme pension only but can be exchanged for lump sum at retirement. Bought in blocks of £250 annual pension up to a career maximum of £5,000. Option to include cover for dependants pension. Spread cost over 1 to 20 years, or pay a one-off lump sum contribution.

• Additional Voluntary Contributions (AVC’s) – Contributions invested in a separate fund used to buy a top up pension. Option to take up to 25% of fund as cash. NHS Scheme cannot guarantee the fund or pension it will provide. Special terms from appointed NHS Scheme providers but you can choose your own provider.

• Stakeholder Pensions – A type of personal pension. Contributions invested in a

separate fund used to buy a top up pension. Option to take up to 25% of fund as cash. NHS Scheme cannot guarantee the fund or pension it will provide. Available through the NHS Scheme or choose your own provider.

Continued…

• Buying back previously refunded membership - If you had a refund of contributions for any membership before 6 April 1978, or for practitioners at any time, you may be able to buy this membership back at half the normal cost.

• Added years - Members of the 1995 section who took out or elected to take out an added years contract before 1 April 2008 may also be buying additional Pensionable Service . These contracts my continue whilst members are in the 1995 section. The option is no longer available for new contracts in either section

• Tax relief is normally available on contributions paid to any of the above top up options.

• Pensions can be transferred in/out of approved pension schemes

• Transfer in to NHS Scheme must be initiated within first 12 months of joining

• Transfer out – Contact the pension officer of new employer for information

• Before transferring out of the NHS Pension Scheme seek independent financial advice

• If less than 2 years contributing membership a refund can be requested. (Form RF12 available from Pensions Office)

• All contributions will be repaid less Tax & NI adjustment

All NHS Pension queries should be addressed to:

Joe BloggsSenior Pensions Officer

Any Hospital TrustAnywhere Road

Freedom CityLostville T20 OWL

Contact times: Monday – Thursday (7.30am – 4.00pm)

Telephone: 01234 567890Fax: 02345 678901

E-mail: Joe.Bloggs@anytrust.nhs.uk