02871 319111 www.hscpensions.hscni.net hscpensions@hscni.net HSC Pensions Service Waterside House 75 Duke Street Londonderry BT47 6FP 02871 319111 www.hscpensions.hscni.net hscpensions@hscni.net

WHICH SCHEME AM I IN? 1995 Section- Membership of superannuation scheme started before 31st March 2008 2008 Section- Members who have joined scheme form 1st April 2008 onwards.

2015 Scheme 2015 Scheme came into effect from 01/04/2015 Members within 10 years of Normal Retirement Age at 01/04/2012 remain in their current section of the scheme.

What are benefits based on? Pensionable Service Pensionable Earnings

Final Pensionable Salary 1995 section- best of the last 3 years before retirement date. 2008 section- average of best 3 years from last 10 years before retirement date.

Pension 1995 Section. 1/80th of final superannuable earnings for each year’s service in this Section of the Scheme. For example Service: 40 years Earnings: £20,000 Pension: 1 / 80 x 40 years x £20,000 = £10,000 pa

Pension 2008 Section. 1/60th of final superannuable earnings for each year’s service in this Section of the Scheme. For example Service: 40 years Earnings: £20,000 Pension: 1 / 60 x 40 years x £20,000 = £13,333 pa

Lump Sum 1995 Section Only. 3/80ths of final superannuable earnings for each year’s service in this Section. Example Service: 40 years Earnings: £20,000 Lump Sum: (Pension X 3 ) £10,000 x 3 = £30,000

Option to Increase the Lump Sum Everyone in 1995 section must take the standard lump sum of 3 x pension This can be increased to 5.36 x pension Paid for by reducing your pension Every £1 of pension ‘Given up’ will purchase an additional £12 of lump sum

Main Differences 1995 - 2008 1995 Section 2008 Section 80th 60th Retirement age 60 Death Benefits (Survivors benefits) Mandatory Lump sum retirement payment Tax free cash flexibility MHO / Special class 1995 section only 2008 Section 60th Retirement age 65 Death Benefits (Survivors benefits) Tax free cash flexibility

Based On 20 yrs service, final salary of £20,000. 1995 –2008 Comparison Based On 20 yrs service, final salary of £20,000. 1995 section 2008 section Pension £5,000 Pension £6,666 Lump Sum £15,000 No Automatic Lump sum MAX Lump sum Pension £4018 Pension £4286 Lump Sum £26,784 Lump sum £28,560

Part-time Employment Superannuable service and earnings are changed to equivalent full-time amounts. For example 3 years at full-time = 3 years full-time service 6 years at half-time = 3 years full-time service = 6 years full-time service

Part-time Employment Your service will be scaled according to the hours you work over your standard hours. For Example If you work 20 hrs/40 hrs your service will be scaled. For each year of service you will be credited with ½ year for pension purposes. For pension purposes your pay will be based as if you were working full-time. eg. If you earn £5,000 part-time then for pension purposes your pay will be £10,000.

Types of Retirement Benefits Age Incapacity Voluntary Early Retirement (Reduced) Premature (Redundancy etc)

Age Retirement Must retire from all HSC employments Payable at age 60 1995 Section. (Age 55 for Special Classes/MHOs) Payable at age 65 2008 Section. Monthly Pension (Taxable) Mandatory Lump Sum 1995 section only (Non taxable one-off payment)

Incapacity Retirement No age limit – must have 2 years membership Permanently incapable of carrying out the duties of your employment (Tier 1 – no enhancement) Permanently incapable of carrying out the duties of any regular employment (Tier 2 – enhancement) Must retire from all HSC employments Monthly Pension (Taxable) Lump Sum (Non taxable one-off payment) Return to work, subject to abatement

Voluntary Early Retirement (Reduced) Must be age 50 or over (55 for 2008 scheme) Must have 2 years membership Must retire from all HSC employments Benefits are reduced Monthly Pension (Taxable) Lump Sum (Non taxable one-off payment)

Reduced VER Benefits 1995 section. Pension Lump Sum 59 95% 97% 58 91% 94% 57 87% 56 83% 88% 55 79% 85% 54 75% 53 72% 81% 52 69% 78% 51 67% 76% 50 64% 73% Reduced VER Benefits 1995 section. e.g. Voluntary early retirement at Age 51

Premature Retirement Redundancy Organisational change Efficiency of the Service

Family Benefits Life Assurance (Death gratuity) Survivor pension (Widow/er, civil partner, nominated partner) Child Allowance

Life Assurance In service – twice superannuable pay Pension in payment – Gratuity may be payable if death occurs within 5 years of pension start date.

PN1 – Partner nomination Form Survivors Pension Pension in payment – (Male member dies) ½ the rate of pension payable at date of death (37.5 % of pension at date of death 2008) Pension in payment – (Female member dies) ½ rate of pension based on members service from 6/4/88 PN1 – Partner nomination Form

Child Allowance Dependant Children Can be Payable until age 23 – but no later! unless Child is permanently incapable of earning a living because of physical or mental infirmity

Taxation Changes Lifetime Allowance (LTA). Reduced to £1,250,000 from April 2014 & reducing to £1M from April 2016. HMRC transitional Protection may be available, directly from HMRC. Factor of 20 to be maintained. Pension X 20 + Lump Sum.

Annual Allowance From April 2014 reduced to £40,000 pa. Factor of 16 to be used to calculate tax liability Liability to be ascertained by employer. Up to 3yrs Unused allowance may be carried forward

“ Pension Input Period” PIPs and PIAs Accrued Pension at end of previous PIP: Based on Final Salary and Pensionable Service at that date Increase in pension growth x 16 = “Pension Input Amount” Accrued Pension at end of current PIP: Based on new Final Salary and Pensionable Service at that date End Start “ Pension Input Period”

Applying for Benefits If possible, make your application at least 3 months before your intended retirement date Pension application form – AW6 Incapacity application form – AW33(IS) Both forms should be available from Personnel Any outstanding annual leave will put back your date of retirement

Payment of Benefits Lump Sum Non-taxable One off Payment Pension Paid monthly Last bank day of month Taxable income Paid direct to your bank or building society account

Once your Pension is in Payment Pension increases paid every April (VER & Premature Retirement receive increases from age 55) Backdated pay awards Your former employer will notify HSC Pensions Branch of any backdated pay awards and your benefits will be re-calculated and arrears paid Change of address/circumstances Notify Pensions Service

Keeping in Touch

Re-employment in the HSC Within 1 month of retirement Your pension will normally be suspended if you do not take a 24 hr break, and if you work more than 16 hours per week After one month Over Normal Retirement Age? Yes – Your pension will not be affected No – Your pension may be reduced You cannot rejoin the 1995 section unless you have retired on Ill Health and are under age 50

Abatement of Pension Pensioners who return to HSC employment can have their pension abated if their combined income (monthly pension and re-employed salary) exceeds their earnings prior to Retirement.

Abatement Rules Abatement rules differ according to your own individual circumstances and the type of pension you receive. Each member will have a permitted to earn amount which should be checked with Pensions Service prior to taking up any new HSC employment Member’s taking Voluntary Early Retirement are not subject to Abatement Rules

Abatement Rules The Pensioner must inform their Employer they are in receipt of a HSC Pension. The pensioner must inform HSC Pensions Service of their return to HSC Employment.

How is the pension affected If a member returns to NHS employment after retirement and the pension is subject to abatement, a number of options are open to the member. Reduce their earnings in their new employment. Have their pension suspended Have their pension adjusted Any overpayment of Pension must be repaid

Website: www.hscpensions.hscni.net Telephone: 028 71 319111 Website: www.hscpensions.hscni.net Email : hscpensions@hscni.net