Proposed changes to the
NHS Pension Scheme – what
you need to know
What would the scheme look like
from April 2015?
• Career average pension scheme (CARE)
• Annual accrual rate of 1/54th
• Pension earnings uplifted by Consumer Price Index
(CPI) plus 1.5%
• Normal Pension Age (NPA) of 65 or the state pension
age (rising to 66 by 2020,67 by 2028, and 68 by 2046)
• Pensions in retirement increased by CPI
• Access to NHS pension scheme for those TUPE’d out of
the NHS
• The Government has pledged that there will be no more
fundamental changes to the scheme for 25 years from 1
April 2012.
Increase in employee contributions
• Average contributions of 9.8% by 2014
• Increase to 9.8% average over 3 years ;
2012/13, 2013/14, and 2014/15
• Higher paid to pay more and lower paid to
be protected
• Nurse on £30,000 now pays around
£1950pa (gross). By 2014, this will be
around £2940 (gross) - an increase of
£970.
What is ‘Full Protection’?
• Those due to reach pension age within ten
years from 1 April 2012 will remain in their
current scheme and be able to retire at their
normal pension age (NPA).
• MHOs will continue to ‘double up’.
• Everyone will have to pay any expected increase
in employee contributions.
• NPA is either 55 (Special Class and MHO) or 60
in the 1995 section and 65 in the 2008 section.
The ‘taper’
• Those that are due to reach their pension age 3.5 years
after the ten years from 1 April 2012 have expired will
also receive some protection.
• Effectively those in the taper will move to the new
scheme at some point after 1 April 2015 – when the
new arrangements are scheduled to take affect.
• Unlike those receiving full protection, MHOs will not
continue to ‘double up’ but will get some benefit from
‘Uniform Accrual’
• The nearer someone is to the ten years from 1 April
2012, the later they will transfer to the new scheme.
• All service until transferring to the new scheme will be
‘fully protected’ at current NPA. The ‘final salary’ that
will be used to calculate this element of their service will
be the ‘final salary’ at actual retirement.
Examples of the ‘taper effect’
Years to pension age after ten years
from 1 April 2012
Date of switch to the new pension
scheme
3.5 years and over
Move to the new section on 1/04/ 2015
3 years
1/04/2016
2.5 years
1/04/2017
2 years
1/04/2018
1.5 years
1/04/2019
1 year
1/04/2020
O.5 years
1/04/2021
What happens when I retire?
• If you are ‘fully protected’ you will retire as planned on
your current arrangements
• If you are in the current scheme and transfer to the 2015
section and then retire….
…your pension will be made up by:
– Service in the old section: fully protected at the NPA and
calculated at your final salary, plus...
– Service in the 2015 section: built up on CARE at 1/54th with NPA
65 (or equal to the state pension age)
– If pension in the 2015 section is taken before age 65 it will be
actuarially reduced for taking it early.
– When you retire you will take your pension all in one go. You
can't take one pension (pre 2015) without taking the other (post
2015)
What if you are not in the
protected groups?
• You will move to the new scheme for ‘future
pensionable service’ on April 1 2015.
• This pensionable service will have a normal
pension age of 65 (or equal to the state pension
age)
• The pension value you accrue up to 2015 will be
fully protected as will the pension age for this
service.
• Your final salary on actual retirement will be
used to calculate this part of your pension.
Important information
• RCN Council believes that these
proposals are the most that can be
achieved through negotiation.
• Members are being asked to vote on
whether to accept or reject the proposals.
• Members have until 4pm on 27 February
to return their voting paper.
• Council will meet on 28 February to decide
the next steps.
More available information:
• A ‘Contribution’ calculator: enabling you to work
out how much extra you will pay in contributions
from 2012.
• A ‘Retirement’ calculator: enabling you to
calculate your pension on retirement.
• A number of Q&As on the proposals.
• Detail on the transition dates to the new section.
• A number of films on the proposals and
background.
www.rcn.org.uk