NHS Pension Scheme 2015
Presentation prepared by the
Scottish NHS Pensions Group
What is happening?
• From 1 April 2015, the current NHS superannuation scheme will be
closed to new members and existing members will move to a new
scheme except:
– Active members within 10 years of their Normal pension age as
at 1 April 2012 (who will be fully protected and will not have to
move)
Also:
– Active members within a further 3 years 5 months of normal
pension age as at 1 April 2012 (who will have some protection
and will move to the 2015 Scheme at a later date)
How is the new NHS scheme different?
Main changes:
• Career Average Revalued Earnings
(CARE)
• Normal pension age will be linked to
member’s state pension age
What is a “CARE” scheme?
• In a CARE scheme, pension is based on pensionable
pay right across a career.
• Pension is built up year on year according to the “accrual
rate” and the “revaluation rate”
• In the 2015 NHSScotland scheme, the “accrual rate” will
be 1/54th and the “revaluation rate” will be CPI plus
1.5%,
• The final pension is calculated by adding together the
pension earned in each year of membership.
CARE means scheme members earn a percentage
of your salary as pension for each year you work
The year 1 pot is then “revalued” in
year 2 to take account of inflation
And again in each subsequent year
until retirement
• Members receive a new retirement
“pot” for each year they are in the
scheme
• Which goes through the same year
on year revaluation process
Annual pension at retirement is made up of the
sum of all the pension pots from each year of
scheme membership
“Tom” gets a pension of £13,422 after 20 years
service.
Other Features of the 2015 Scheme
• Option to pay additional contributions to fund early
retirement.
• Added years and Additional Pension contracts from
1995 section will continue on compulsory transfer to
2015 scheme.
• Ill health pensions based on current arrangements but upper tier based on enhancement of 50% of
prospective service to normal retirement age.
Other Features of the 2015 Scheme
(continued)
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Early and late retirement factors
Option for partial retirement available as 2008 section
“Additional Pension” facility
Optional lump sum commutation at rate of £12 of
lump sum for every £1 per annum pension given up (up
to HMRC limit of 25%)
• Lump sum on death in service 2 x actual pensionable
pay
• Spouse and partner pension as they are now
• See SPPA website for full details of the 2015 scheme
Contributions
• Employee contributions will be on a
tiered basis.
• Must achieve a 9.8% yield overall.
What about the benefits members have
already accrued in the 1995/2008 scheme?
• Benefits accrued will be “preserved”.
• Linked to final salary at time of leaving 2015 scheme.
• Can be taken at 1995/2008 scheme NPA, but must retire from
NHS employment.
• If 1995 section benefits are taken, member cannot rejoin the
2015 scheme.
• 2008 section members who take their 2008 benefits can,
however, re-join the 2015 scheme and accrue further benefits.
• 2015 benefits can be taken at same time as previous scheme
benefits, but will be actuarially reduced.
“Choice”
• A second “choice” exercise for certain members in the 95
Section of the current Scheme will take place towards the end
of 2015.
• This will be known as the “95 Section Choice Exercise” in
Scotland.
• Those eligible will be 95 Section members who:
- Do not have full protection
- Were eligible for the last exercise
• Eligible members will be contacted by SPPA directly at the
appropriate time in late 2015.
Opting out of Protection
• Members of the 2008 section who are within the protection
period will be given a choice to opt out of protection and move
direct to the 2015 scheme.
• This is because, depending on their retirement plans, they may
be better off moving directly to the 2015 scheme on 1 April 2015.
• An exercise offering members this option will take place after
1 April 2015.
• Eligible members will be contacted by SPPA directly at the
appropriate time.
Where can I get further information?
•
SPPA website - Framework Document, FAQ, Protection Calculator and other docs to
be added as developed.
•
Scheme Guides and further communication products will be released in the run up to
1 April 2015.
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See www.sppa.gov.uk - Changes to the NHS (Scotland) Pension Scheme from April
2015
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Email nhspensionsreform@scotland.gsi.gov.uk
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Telephone – SPPA 01896 893000
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You can speed up any contact with SPPA by providing your:
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Name,
Date of birth,
National insurance number and
Superannuation number.
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Alternatively they can contact SPPA via “My Pension - Online Member Services”,
which you will find on their site.
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Trade Unions, Professional organisations
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Employers