1. 02871 319111 www.hscpensions.hscni.net hscpensions@hscni.net
HSC Pension Service Waterside House 75 Duke Street Londonderry BT47 6FP

2. Background to Pension Reform
Government commissioned Lord Hutton to review ALL Public Service Pensions
A Proposed Final Agreement (PFA) was published in 2012 covering high level proposals
Public Service Pension Act (NI) 2014

3. HSC Pension Service : The Facts
The new pension scheme was introduced on 1st April 2015
All pension rights earned in the HSC Pension Scheme up to 31/03/2015 will be calculated as at present when you retire.
Full Protection and Tapered Protection rules apply
Retirement age is linked to SPA
Career Average Re-valued Earning Scheme
1/54th accrual rate

4. What is Protection?
Full Protection means you are not affected by the reform therefore the current scheme remains open to you until age 75
(you are within 10 years of normal retirement age at 1/4/12)
Tapered Protection means the current scheme is open to you for a period beyond 31st March 2015
(you are within 10 years and 13 years 5 months of normal retirement age at 1/4/12)

5. Check if you have tapered protection
You can check the calculator on the website to see if you fall under tapered protection rules and what date membership of the current scheme will be closed to you

7. A new way of working out your pension – it would be worked out in two parts:
Part 1 – what you have earned before any changes
Worked out in the same way (using final salary for most)
Part 2 – what you earn after the changes
Worked out from your future average earnings

8. Part 1 – Worked out in the same way (using final salary for most)
Your final salary
(When you retire or leave the Scheme)
Your service
(the date you joined until the date of the changes)
Your pension rate
(e.g. 1/60th or 1/80th)
This is the same way your
pension has always been
worked out. There would
be no change, and you can
still take a tax free cash
lump sum.
Your Pension at retirement

9. Part 2 – Worked out from your future average earnings
For example, Tom earns £20,000 so his pension in year 1 is worked out as:
£20,000 x 1/54th = £370.37

10. Part 2– Maintaining your pension’s value
Revalued by CPI +1.5% each year
This is then revalued
until you retire to
maintain its value
Year 1
The £370 that Tom earns in year 1 is revalued at the end of the next year. So at the end of year 2, this part of Tom’s pension is worth:
£ x 3.5% = £ (if CPI is 2%)
The pot continues to
be revalued until you
retire
Year 1
Year 1 retirement pot
Tom’s pot for year 1 is worth £ after 25 years

11. Part 2 – Your pension at retirement
Adding your other years’ pots
Annual pension at retirement
If Tom has a 1% salary rise each year, by adding all of the other years’ pension pots together, he could expect a pension of £16,000 a year after 25 years’ service
You receive a new
‘pot’ for each year you
are a member
Add up the pension
You earned each year
(after it has been
revalued) to find your
total pension

12. Changes to Current Arrangements
A service break of less than 5 years is treated as continuous service
No Special Class Status or Mental Health Officer Status in the new scheme (currently only limited availability to certain members of the 1995 section)
No limit on pension accrual
Late Retirement: 2015 benefits will receive an increase if the member retires after SPA

13. Changes to Current Arrangements
Normal Pension Age (NPA) for members will be their State Pension Age (SPA)
Ill Health Retirement (Tier 2) will include 50% enhancement on prospective service to SPA (currently 2/3rds)

14. Changes to Current Arrangements
Actuarial Reduction Buy-out :
Allows a member to pay additional contributions to buy out any potential actuarial reduction of retiring before NPA
Maximum buy-out = 3 years of actuarial reduction
Member with NPA of 68 retiring at 65 will have no reduction applied

15. Option to forgo Protection (2008 members only)
Members of the 2008 section of the scheme with tapered or full protection will have a one off opportunity to forgo all protection of future accrual in the 2008 section of the scheme and move to the new 2015 scheme.
The option will be made available in late 2016 and members will have 3 months to choose

16. Choice 2 Exercise
Members of the 1995 section of the current scheme, who do not have full protection, will have a second chance to move their accrued service into the 2008 section
This exercise will take place in Spring 2016
Members will have until noon 31st August to make HSCPS aware of their decision

17. Added Years Contracts
Members can continue to pay for added years contracts following a move to the 2015 scheme
Members of the 1995 section of the scheme (moving to the 2015 scheme) can access the added years benefits separately and before their main 1995 benefits are due to be paid.
This will permit members to have future accrual in the 2015 scheme.
Once 1995 section benefits are accessed further accrual in the 2015 scheme is not permitted

18. Salary Sacrifice Scheme
The value of the noncash benefit is not pensionable in the scheme
Scheme contributions are based on the reduced salary
Only the reduced salary will be used toward the pension pot
Also affects death in service benefits

19. Upcoming Issues for HSC Pensions/Members
Communication
Choice 2
Opt out of Protection
Actuarial Reduction Buy Out
De-coupling of Added Years Benefits

20. HSC Staff Practice and Approved Employer Staff
Feature or Benefit
HSC Staff Practice and Approved Employer Staff
Practitioners (HSC Medical and Ophthalmic Practitioners)
All HSC workers and Approved Employer Staff
Scheme
1995
2008
2015
Member Contributions
Tiered Contribution Rates
Type of Scheme
Final salary based on the best of the last 3 years pensionable pay
Final salary based on the average of the best three consecutive years within the last 10 years
Earnings Accrual. The final value of pensionable earnings after adding all years’ earnings and applying revaluation factors
Career Average Re-valued Earnings based on a proportion of pensionable earnings in each year of membership
Pension
A pension worth 1/80th of pensionable pay per year and pro rata for any part year of membership
A pension worth 1/60th of reckonable pay per year and pro rata for any part year of membership
A pension based on 1.4% of total up-rated earnings
A pension based on 1.87% of total up-rated earnings
A pension worth 1/54th of each years’ pensionable earnings, re- valued at the beginning of each following scheme year in line with the Consumer Price Index plus 1.5 % whilst in active membership
Retirement Lump Sum
3 x pension. Option to exchange part of pension for more cash up to 25% of capital value
Option to exchange pension for a lump sum, up to 25% of capital value. Certain members may have a compulsory amount of lump sum
Option to exchange pension for a lump sum, up to 25% of capital value. Certain members may have a compulsory amount of lump sum
Option to exchange part of pension for a lump sum up to 25% of capital value
Normal Pension Age
60 (55 for Special Class/MHO) 65 60
Equal to an individuals’ State Pension age
Maximum Age 75
Maximum Membership
Non Special Class/MHO 45 years in total. Special Class/MHO 40 years at age 55 & 45 years overall
45 years
No limit

21. Feature or Benefit
HSC Staff Practice and Approved Employer Staff
Practitioners (HSC Medical and Ophthalmic Practitioners)
All HSC workers and Approved Employer Staff
Scheme
1995
2008
2015
Minimum Pension Age
Age 50 if joined pre 06/04/2006 and not had a break of 5 years or more Otherwise Age 55
Age 55
Age 50 if joined pre 06/04/2006and not had a break of 5 years or more Otherwise Age 55
Actuarially Reduced Early Retirement
Yes
Late Retirement
No late retirement factors applied
Late retirement factors applied to pension earned before Age 65
Late retirement factors applied to all pension earned until retirement
Pensionable Re-employment following payment of pension
Only available to eligible members who retire from active membership following ill health retirement who re-join prior to age 50
Yes if eligible
Partial Retirement No
Ill Health Tier 1
Accrued benefits paid without reduction
Accrued pension paid without reduction
Ill Health Tier 2
Tier 1 plus an enhancement of 2/3rds of prospective membership to NPA
Tier 1 plus an enhancement of 1/2 of prospective pension to NPA
Increasing your Pension
Purchase of Additional Pension in units of £250