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NHS PENSION SCHEME Pre-Retirement Course 2017
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Reasons for Retirement
Retirement at NHS Normal Pensionable Age or Above Termination under Pensionable Age - Ill-Health Retirement - Redundancy - Voluntary Early Retirement (VER with reduction)
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Normal Age Retirement Pensionable Service and Pensionable Pay
- Are used to calculate - YOUR PENSION & - YOUR LUMP SUM (Tax Free)
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Pensionable Service Period of time paying pension contributions
Part-Time service is converted to Whole Time Equivalent service
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Which Scheme? Currently there are 3 sections to the NHS Pension Scheme. Each section is fundamentally different. 1995 & 2008 sections and 2015 scheme The Normal Pension Age (NPA) differs in each scheme: 1995 section NPA = 60 2008 section NPA = 65 2015 scheme NPA = State Pension Age
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Pensionable Pay 1995 section
Is the last 12 months Pensionable Pay i.e. the previous 365 days pay. Best of last 3 years (1995 scheme) The Notional Whole Time salary (NWT) is calculated for part time staff Half Sick Pay is deemed to Full Pay
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Pension & Lump Sum (1995) PENSION CALCULATION:-
1/80 of Pensionable Pay for each year of Pensionable Service (WTE) LUMP SUM CALCULATION:- 3/80 of Pensionable Pay for each year of Pensionable Service (WTE) Exception married men before – Lump Sum 1/80
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Example 1- 1995 Section Full Time Service 40 years
Pensionable Pay £25,000 £25,000 / 40 x 80 = £12,500 Pension £12,500 x 3 = £37,500 Lump sum
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Example 2 – 1995 Section Part Time Service 40 years – 0.5 WTE
(Works half F/T hours, calendar service of 40 years scaled to 20 years membership) Pensionable Pay £12,500. NWT = £25,000 £25,000 / 20 x 80 = £6,250 Pension £6,250 x 3 = £18,750 Lump Sum
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Commutation example 1 You may opt for an additional lump sum.
£1 pension = £12 lump sum Maximum extra lump sum 5.35 x annual pension, e.g * £12,500 = £66,875 Lump Sum = £37,500 + £29,375 = £66,875 Pension = £12,500 - £2,447 = £10,053
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Commutation P/T example
You may opt for an additional lump sum. £1 pension = £12 lump sum Max extra lump sum 5.35 x annual pension e.g * £6,250 = £33,437 Lump Sum = £18,750 + £14,687 = £33437. Pension = £6,250 - £1,223 = £5,027
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Mixed Service Mixed Service - Full and Part Time membership
20 years at Full Time 10 years at Part Time (0.5 WTE) 25 years in Total
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Remember In reality every hour worked is calculated.
Full time member works:- 37.50 x weeks = 1955 hours 1955 hours = 365 days membership Part time member works:- 30 x weeks = 1564 hours 1564 hours = 292 days membership
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2008 Scheme – Members from April 2008 or if you have transferred in with NHS Pension Choice
1/60 Scheme – No auto lump sum - Commute part of pension (1:12) Final Salary – Average of best 3 years in last 10 years (+ Cost of Living) Normal Pension Age = 65 Draw down pension 2 times + continue paying pension contributions and working
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Re-Employment You must take one month’s break in employment. The break is defined as follows: A full calendar month off work unpaid, or A 24 hour break in employment unpaid, followed by one calendar month working no more than 16 hours per week Reduction of Pension (Abatement) This only applies for special classes until you reach age 60. Pension + New Pay should not be greater than Pensionable Pay on retiring.
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VER 1995 section From Age 50 * * From April new staff minimum age 55 Service only as at retirement date 2008 section & 2015 scheme from Age 55
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VER Pension
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VER – Lump Sum
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VER – Pension
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ILL Health Tier 1 – Unable to do your job
Unreduced pension based on service accrued at termination. Tier 2 – Unable to work at all service + enhanced pension = two thirds of pension to prospective normal retirement age.
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Compulsory Redundancy
Must be at minimum pension age, 50 or 55 3 choices: Unreduced Pension, with costs met by the member and balance of redundancy Reduced pension on VER and full redundancy Redundancy only
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When you Retire Pension agency require a minimum of 4 months notice.
Resign and agree you final day with your manager – including A/L Claim your pension and complete form AW8
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Your Pension Lump Sum is normally paid the day after you retire.
Your Pension is paid monthly in arrears. (i.e. Pension is credited using your date of birth i.e. If born on 15th that will be your payday)
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Recent Changes Accrued benefits are safe CPI instead of RPI
Career average scheme from /54th Change in Retirement Age (SPA) 10yr protection from 01/04/2012 Limited protection for those 13.5 years from retirement
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Useful Contacts Anne Wardman Level 4 New Mill 01274 251000
NHS Pension Agency Fleetwood Paymaster Crawley Inland Revenue Cardiff
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