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What’s in the government’s NHS pensions offer?

The proposed final agreement on NHS pensions was published by the Department of Health on 9 March. Here are some frequently asked questions.

The new Department of Health (DH) document, ‘Reforming the NHS pension scheme for England and Wales - proposed final agreement’, was published last month. It incorporates some changes that have been under discussion since the ‘Heads of Agreement’ was published in late December, including aspects of protection arrangements and the option of a ‘second chance choice’ exercise for certain members.

The CSP stresses that nothing will be decided on NHS pensions without you having your say.

As previously announced, a ballot of members working in the NHS and associated social enterprise companies in England, Wales and Northern Ireland will be held from 12-30 April. The Industrial Relations Committee will meet to consider the results on 1 May.

In Scotland, unions including the CSP were to meet health secretary Nicola Sturgeon as Frontline went to press to discuss NHS pensions for scheme members in the country.

What are the terms of protection for members?

All members who are within 10 years of their current normal pension age on 1 April 2012 will retain their current pension arrangements. This is referred to as full protection.

Members who are between 10 years and 13 years 5 months away from their current normal pension age (NPA) will have tapered protection, so they will move to the new scheme at some point between 2015 and 2022.

What is the option to opt out of protection for 2008 section members?

Members of the 2008 section will have protection in the same way as members of the 1995 section; however they will be given a one-off option to opt out of protection and transfer to the new 2015 section in 2015. This is because modelling has suggested that the majority of these members could be better off if they transfer to the new arrangements.

I am a member of the 1995 section. When I reach my current NPA will I be able to take my existing final salary pension and continue working and accrue benefits in the new scheme?

You will be able to take your existing final salary benefits earned up to 2015 on an unreduced basis at any age after 60 (55 if you are a special class member) and all your service will be linked to your final salary. Pension accrued after can be either taken with an actuarial reduction or deferred, that is, left in the scheme until your state pension age.

I am a member of the 1995 section. Can I retire, take my pension and return to work?

It is possible, if your employer agrees, for you to retire and return to work after 24 hours subject to certain conditions. You will not be able to rejoin the pension scheme.

What is happening to Added Years and Additional Pension Arrangements?

Added Years contracts in the 1995 section will continue on compulsory transfer to the 2015 section and additional pension arrangements will continue. Further details can be found at Paragraphs 5 (o) and 5(p) of the proposed final agreement.

Will the choice exercise be reopened as a consequence of the new pension proposals?

It was agreed some time ago that the outcome of the choice exercise would be reviewed. This has now been discussed in talks between unions, DH and NHS Employers.

Because of the changes in the proposed final agreement, it could mean that some members who chose to stay in the 1995 section and are not covered by full protection may wish to change their retirement plans and retire later.

These members will be offered a second chance to transfer to the 2008 section for their service up to 2015. This choice is likely to be offered in 2013 or 2014. Those with full protection in the 1995 section and those who have already chosen to move to the 2008 section will not be given another choice opportunity.

With all these changes should I leave the pension scheme?

No decision about leaving the scheme should be taken without seeking independent financial advice but remember you will lose some significant entitlements, for example, ill-health retirement and death in service and survivor benefits, in addition to your employer’s monthly contribution of currently 14% of your salary to your pension.

I am not currently working in the NHS but have pension scheme benefits built up from previous NHS service. What is my position?

You are what is known as a deferred member and there will be no change to your terms. If you return to NHS employment and the pension scheme you will need to check your position.

What happens to me if I am already over the NPA for my scheme in 2015? Will I immediately join the new scheme if I continue working?

No. You would continue in your current scheme until you leave the service.

How will the proposed scheme changes affect me?

Find out by using the DH NHS Pension Scheme calculator for NHS staff. For the impact of contribution increases try a separate DH employee contributions calculator for 2012/13.

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Frontline magazine

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4 April 2012

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