1. NHS Shared Business Services NHS Shared Business Services

2. NHS Pensions Scheme
By the end of this presentation you should be able to answer the following questions:
Which section/s of the NHS Pension Scheme am I in?
The normal retirement age for NHS Pension Scheme Benefits?
Do I have full, tapered or no protection?
If I have tapered or no protection. Do I know the date I will join the 2015 NHS Pension Scheme?

3. Topics Checking your payslip NHS Pension Schemes Contributions
Pensions Scheme Benefits
Pensions changes if you do not meet normal retirement age
Additional Pensions Benefits
Applying for retirement benefits
Working after retirement
2015 Scheme
Choice 2
Questions

4. Checking your payslip

5. NHS Pension Schemes Two Sections of the Scheme from 1 April 2008
1995 Section – Based on 80ths for scheme members at 31 March 2008 and re-entrants with less than 5 years break in membership.
2008 Section – Based on 60ths for all new starters from 1 April 2008 and re-entrants with 5 years or more break in membership.
New NHS Pension Scheme from 1 April 2015
Both sections and the 2015 Scheme provide index linked pensions
1995 and 2008 sections are based on Final Salary
2015 Scheme is a career average revalued earnings (CARE)

6. NHS Pensions Scheme - Contributions
Earnings 1
Rate 2
Relief 3
14.3% 4
Contributions are linked to your earnings
Rate of contributions dependant on full time earnings, or equivalent amount if working part time
Tax relief on contributions
Employer pays 14.3% from 1 April 2015

7. Contribution Rates Tier
Full-time pensionable pay/earnings used to determine contribution rate
Contribution Rate (before tax relief) (gross)
1 April March 2019 1
Up to £15,431.99 5% 2
£15, to £21,477.99
5.6% 3
£21, to £26,823.99
7.1% 4
£26, to £47,845.99
9.3% 5
£47, to £70,630.99
12.5% 6
£70, to £111,376.99
13.5% 7
£111, and over
14.5%

8. Opt out and Refunds To opt out form SD502 needs to be completed
Form is obtained from NHS Pensions website
If member opts out or leaves NHS employment with less than 2 years membership a refund can be requested
To apply for a refund of pension contributions form RF12 is required
NHS Pensions provide a breakdown of the refund

9. Pension Scheme Benefits
Age retirement
Whole time
Part time
Normal retirement age is 60 for 1995 section (55 for special classes) & 65 for 2008 section
Calculating benefits for someone working whole time
Calculating benefits for someone working part time

10. Age retirement
Normal retirement age is 60 for 1995 section (55 for special classes) & 65 for 2008 section
1995 Section – Pension and Lump Sum based on best of last 3 years pensionable pay - lump sum is normally 3 times the annual pension
2008 Section – Pension based on the average of the best 3 consecutive years pensionable pay in the last 10 - no automatic lump sum
Both sections has the option to give up some of the annual pension in exchange for a lump sum
For every £1 of annual pension you give up you would receive an additional £12 lump sum subject to the maximum

11. NHS Pension Scheme
For members of the 1995 and 2008 sections pension benefits are based on:
Your pensionable or reckonable pay at or near retirement
The amount of whole time equivalent membership accrued

12. NHS Pension Scheme – Whole Time
1995/2008 Membership History
An Employee – SD 75/123456
From To
Contract
Years
Days
01/02/1999
31/03/2006
Whole Time 7 59
01/04/2006
31/03/2014 8
Total Membership 15

13. Calculating Your Pension – Whole Time
NHS Pensions Scheme (1995 section)
Pensionable pay = £25,000.00
Membership = 15 years 59 days = 5,534 days
80 years x 365 = 29,200 days
Pension Benefit Calculation
£25, x 5,534 = £4, Annual Pension
29,200
£14, Lump Sum (usually 3 x Annual Pension)
Survivor’s Pension

14. Calculating Your Pension – Whole Time
NHS Pensions Scheme (2008 section)
Pensionable pay = £25,000.00
Membership = 15 years 59 days = 5,534 days
60 years x 365 = 21,900 days
Pension Benefit Calculation
£25, x 5,534 = £6, Annual Pension
21,900
£0 Lump Sum
Survivor’s Pension

15. NHS Pension Scheme – Part Time
1995/2008 Membership History
An Employee – SD 75/123456
From To
Contract
Years
Days
01/02/1999
31/03/2006
Whole Time 7 59
01/04/2006
31/03/2014
Part Time 4
Total Membership 11

16. Calculating Your Pension – Part Time
NHS Pensions Scheme (1995 section)
Notional Whole Time = £25,000.00
Membership = 11 years 59 days = 4,074 days
80 years x 365 = 29,200 days
Pension Benefit Calculation
£25, x 4,074 = £3, Annual Pension
29,200
£10, Lump Sum (usually 3 x Annual Pension)
Survivor’s Pension

17. Calculating Your Pension – Part Time
NHS Pensions Scheme (2008 section)
Notional Whole Time = £25,000.00
Membership = 11 years 59 days = 4,074 days
60 years x 365 = 21,900 days
Pension Benefit Calculation
£25, x 4,074 = £4, Annual Pension
21,900
£0 Lump Sum
Survivor’s Pension

18. Pensions changes – do not meet retirement age
Voluntary early retirement
Ill Health retirement
Life assurance and family benefits
Redundancy benefits
Draw Down

19. NHS Pension Scheme – Voluntary Early Retirement
Voluntary Early Retirement (VER) is available to members over the minimum retirement age
1995 Section – Minimum retirement age is 50 except for members who joined the scheme on or after 6 April 2006, their minimum retirement age is 55
2008 Section – Minimum retirement age is 55
Pension benefits are reduced for being paid early
Reduced pension must exceed the Guaranteed Minimum Pension (GMP) for membership up to 6 April 1997
A member of the NHS Pension Scheme is contracted out of the State Second Scheme (SERPS)
GMP tests if NHS pension scheme benefits pre 1997 are at least the amount member would have received from State Second Scheme

20. NHS Pension Scheme – Ill Health Retirement
Must have 2 years pensionable membership
2 Tier arrangement
Tier 1 – Unable to carry out current duties – can receive pension benefits accrued without enhancement
Tier 2 – Unable to engage in any regular employment – can receive an enhanced pension
AW33E Form – Requested by HR

21. NHS Pension Scheme – Life Assurance and Family Benefits
From first day of joining NHS Pension Scheme a life assurance lump sum is payable equal to 2 years pensionable pay
Payable automatically to a spouse or registered civil partner
Regardless of marital status anyone can be nominated using form DB2
Survivor’s Pension
Payable to spouse, civil partner or nominated partner (form PN1) for life
Dependant/Child benefits may be payable
Dependant child allowance paid until age 23 (subject to dependency rules)

22. Redundancy Benefits If under minimum pension age you would:
Receive a redundancy payment based on one months pay for each complete year of continuous service up to a maximum of 24 years
Pension benefits would be deferred
If over minimum pension age you would have a choice:
A redundancy payment based on one months pay for each complete year of continuous service up to a maximum of 24 years
NHS Pension benefits taken early without reduction - capitalised costs deducted from redundancy pay

23. NHS Pension Scheme – Draw Down
2008 Section:
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

24. NHS Pension Scheme – Transfer of Pension Rights
Transfer in to NHS Scheme must be initiated within first 12 months
1995 section - of joining the scheme
2008 section – of becoming eligible to join the scheme

25. NHS Pension Scheme – Increasing your benefits
Added years contracts increases membership
Ceased 31 March 2008
Existing contract to be fulfilled
Additional Pension
Purchased in multiples of £250 annual pension
Payable by lump sum or instalments
Other additional voluntary contribution contracts – Standard Life, Prudential, Personal Pension etc

26. Protection Of Pay You have accrued at least 2 years membership
Organisational Change – through no fault of the member 1995 and 2008 Section
Downgraded to a lower paid employment
Application form needed within 3 months of the change
After redundancy if returning to a lower paid job within a year
Voluntary Pay Protection (VPP) Section Only
A member must have stepped down to a less demanding role
Over minimum pension age
More than 10% reduction in whole time equivalent pensionable pay for at least one year
Application form needed within 12 to 15 months of the change

27. Applying for Retirement Benefits
To claim your NHS Pension Scheme Benefits form AW8 is required
Estimate (Commutation)
NHS Pensions require four months notice
Contact NHS SBS Employment Services Desk on
NHS SBS calculate reckonable pensionable pay and submit to NHS Pensions
NHS Pensions calculate pension benefits due
Equiniti Paymaster pay the NHS Pension
Pay in Lieu of Annual Leave extends your membership of the NHS Pension Scheme

28. Working After Retirement
Terminate employment
Have a break in employment (minimum of 24 hours or one calendar month). Consider your local policy/arrangements
Re-employed on a new contract
1995 Section - No more than 16 hours per week in first month following retirement
If you are ‘Special Class’ and retire before age 60 the sum of your pension and the pay in your new job must not exceed your earnings prior to retirement
New employment will not be pensionable – if retiring from 1995 section unless retirement date between 1 April 2008 to 30 September 2009 this excludes organisations who have closed direction status
New employment can be pensionable – if retiring from 2008 section this excludes organisations who have closed direction status

29. 2015 NHS Pension Scheme
This is a career average revalued earnings scheme rather than final salary for pension benefits
An accrual rate of 1/54th of pensionable earnings with no limit on pensionable membership
A normal pension age equal to the State Pension Age
Each year of pensionable pay counts separately towards the build up of final pension benefits
Pensionable earnings increase in line with CPI plus 1.50%
Entering into any salary sacrifice arrangement that reduces pensionable pay will have a negative effect on the amount of pension built up in that year
Early retirement reduction buy out

30. 2015 Calculation

31. 2015 Calculation

32. Choice2
A key component of the 2015 NHS Pension Scheme is a higher normal pension age
Had this information been available at the commencement of the previous Choice exercise, some members may not have elected to remain in the 1995 section
This resulted in a decision, in the interests of fairness and members making the most of their pre 2015 benefits, to provide those affected with another opportunity to decide whether to move their 1995 section membership to the 2008 section - this exercise is known as Choice2

33. Choice2
If you have Full Protection – within 10 years of your Normal Retirement Age at 1 April 2012 you will remain in the 1995 or 2008 section of the NHS Pension Scheme
If you have Tapered Protection – within 10 years to 13 years 5 months of your Normal Retirement Age at 1 April 2012 you will have a specified date when you will move to the 2015 scheme
If you have No Protection – if you were more than 13 years 5 months from your Normal Retirement Age at 1 April 2012 you will move to the 2015 scheme on 1 April 2015

34. Choice2 Tapered and No Protection
Be a contributing member of the 1995 section.
NHS Business Services Authority (NHSBSA) have produced personalised letters for each eligible member
Members will need to read their Choice2 letter in full to understand the implications and are encouraged through their letters to make use of the online calculators and examples
The deadline for NHS Pensions to receive Choice2 decisions will be confirmed in the letter and once a member has made a decision it cannot be changed

35. Choice 2 Decision Tree

36. Can you answer these questions?
Do you know which section/s of the NHS Pension Scheme you are in?
Do you know your Normal Retirement Age for NHS Pension Scheme Benefits?
Do you have Full, Tapered or No Protection?
If you have Tapered or No Protection do you know the date you will join the 2015 NHS Pension Scheme?

37. More Information
Members newsletter:
Total Reward Statements: ESR Self Service or Government Gateway
NHS Pensions website:
NHS Pensions Helpline:
NHS Employers website:
Employment Services Desk: or

38. Any Questions?