NHS PENSION SCHEME Pre-Retirement Course 2017 www.nhsbsa.nhs.uk/pensions

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) www.nhsbsa.nhs.uk/pensions

Normal Age Retirement Pensionable Service and Pensionable Pay - Are used to calculate - YOUR PENSION & - YOUR LUMP SUM (Tax Free) www.nhsbsa.nhs.uk/pensions

Pensionable Service Period of time paying pension contributions Part-Time service is converted to Whole Time Equivalent service www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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 25.3.72 – Lump Sum 1/80 www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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. 5.35 * £12,500 = £66,875 Lump Sum = £37,500 + £29,375 = £66,875 Pension = £12,500 - £2,447 = £10,053 www.nhsbsa.nhs.uk/pensions

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. 5.35 * £6,250 = £33,437 Lump Sum = £18,750 + £14,687 = £33437. Pension = £6,250 - £1,223 = £5,027 www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

Remember In reality every hour worked is calculated. Full time member works:- 37.50 x 52.143 weeks = 1955 hours 1955 hours = 365 days membership Part time member works:- 30 x 52.143 weeks = 1564 hours 1564 hours = 292 days membership www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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. www.nhsbsa.nhs.uk/pensions

VER 1995 section From Age 50 * * From April 2006 - new staff minimum age 55 Service only as at retirement date 2008 section & 2015 scheme from Age 55 www.nhsbsa.nhs.uk/pensions

VER Pension - 1995 www.nhsbsa.nhs.uk/pensions

VER – Lump Sum - 1995 www.nhsbsa.nhs.uk/pensions

VER – Pension - 2008 www.nhsbsa.nhs.uk/pensions

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. www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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 www.nhsbsa.nhs.uk/pensions

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) www.nhsbsa.nhs.uk/pensions

Recent Changes Accrued benefits are safe CPI instead of RPI Career average scheme from 2015 1/54th Change in Retirement Age (SPA) 10yr protection from 01/04/2012 Limited protection for those 13.5 years from retirement www.nhsbsa.nhs.uk/pensions

Useful Contacts Anne Wardman Level 4 New Mill 01274 251000 NHS Pension Agency Fleetwood 0300 330 1346 Paymaster Crawley 0845 1212 522 Inland Revenue Cardiff 0845 3000 627 www.nhsbsa.nhs.uk/pensions