NHS Pension Scheme

1
NHS Pension Scheme

• A brief overview of NHS Pension Scheme

2
Topics Covered in this Presentation

• 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

3
Guide to the NHS Pension Scheme

• 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

4
Eligibility

• Eligibility from ages 16 75 (although Trust
  retirement age is 65)
• Automatic membership
• Choice to Opt out of the scheme (SD 502)

5
Contributions

• 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

6
NEW CONTRIBUTION RATES
Annual pensionable pay (full time equivalent) 2008 Current contribution rate Contribution rate from 1 August 2008 Contribution rate from 1 April 2009
Up to 20,224 5 (manuals) 6 5 (manuals) 5 5
20,225-66,789 5 (manuals) 6 5 (manuals) 6.5 6.5
66,790-105,318 6 7.5 7.5
105,319 plus 6 8.5 8.5

• The annual pensionable pay will be uplifted with
  AfC pay awards.
• Anyone classed as a manual worker on 1.04.08 will
  continue to pay 5 regardless of pay until
  01.04.09

7
What Do You Get For Your Contributions

• Age Retirement Benefits
• Life Assurance Cover
• Family Benefits
• Ill Health Retirement Benefits
• Redundancy Benefits
• Voluntary Early Retirement Benefits

8
Age 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)

9
Age Retirement Continued

• 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.

10
Ill Health Retirement

• 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

11
Voluntary Early Retirement

• 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

12
Draw Down

• 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

13
Life Assurance and Family Benefits

• From 1st day of joining a Death Gratuity Lump Sum
  is payable equal to 2 years pensionable pay
• Survivor benefits for members with over 2 years
  membership
• Widow(er)s and Civil partners automatically
  recognised for benefits
• Partners 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
• Survivors benefits
• Initial Survivors pension paid for 6 months
  through payroll for all members
• Widows continuous pension based on all
  membership
• Widowers/Civil partners/Nominated partners
  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)

14
Increasing Your Benefits

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

15
Transfer of Pension Rights

• 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

16
Refunds

• 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

17
Pension Queries

• All NHS Pension queries should be addressed to
• Joe Bloggs
• Senior Pensions Officer
• Any Hospital Trust
• Anywhere Road
• Freedom City
• Lostville T20 OWL
• Contact times Monday Thursday (7.30am
  4.00pm)
• Telephone [phone]
• Fax [phone]
• E-mail Joe.Bloggs_at_anytrust.nhs.uk