1. NHS Pension Scheme 2015 Presentation prepared by the Scottish NHS Pensions Group

2. 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)

3. 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

4. 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 1/54 th 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.

5. CARE means scheme members earn a percentage of your salary as pension for each year you work

6. The year 1 pot is then “revalued” in year 2 to take account of inflation

7. And again in each subsequent year until retirement

8. Members receive a new retirement “pot” for each year they are in the scheme Which goes through the same year on year revaluation process

9. Annual pension at retirement is made up of the sum of all the pension pots from each year of scheme membership

10. “Tom” gets a pension of £13,422 after 20 years service.

11. 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.

12. Other Features of the 2015 Scheme (continued) 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

13. Contributions Employee contributions will be on a tiered basis. Must achieve a 9.8% yield overall.

14. 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.

15. “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.

16. 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.

17. 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. See www.sppa.gov.uk - Changes to the NHS (Scotland) Pension Scheme from April 2015See www.sppa.gov.ukChanges to the NHS (Scotland) Pension Scheme from April 2015 Email nhspensionsreform@scotland.gsi.gov.uk Telephone – SPPA 01896 893000 You can speed up any contact with SPPA by providing your: –Name, –Date of birth, –National insurance number and –Superannuation number. Alternatively they can contact SPPA via “My Pension - Online Member Services”, which you will find on their site. Trade Unions, Professional organisations Employers