Understanding NHS pension

[LifeisHard73]

I’m asking this on behalf of my DH. Hopefully someone with an NHS pension who actually understands will come along and help!

He's worked for the NHS FOR 24 years. He has 2 scheme 1995 and 2015. Ignoring the 1995 one we have been looking at the 2015 one and on average he’s been paying in 5k a year so roughly 45k. But his pension is worth just 6k a year currently. Is this correct? I know it pays out until he dies but it doesn’t seem a lot considering his employer will also have been contributing. I thought it was a calculation of final salary?

Thanks and sorry if I’m (we’re), being dumb!

How old is he now and what is the scheme's retirement age?

The NHS scheme is, IIRC, based on career average pay. So much goes in each year, as a percentage of salary, and is then index linked until he hits retirement age.

He’s 49 and retirement set at 67 but he’s likely to either leave soon, next 2 years but not retire just leave the NHS or retire from NHS at 65. Although I’m trying to convince him that 60 will give us both more ‘life’ before death!

What is IIRC please?

IIRC - if i recall correctly

IIRC = if I recall correctly.

Why are you ignoring the 1995 one? The majority of what he paid in will have been pre 2015 so will be in the old scheme not the one you are looking at.

I think you need to add the two figures together to get a total pension. Is a little confusing as they likely kick in at different ages.

There is a really good Facebook group about the NHS pension - lots of really good information there: NHS Pensions Chat: Member led discussion group.

He can (and should) take the 1995 pension when he is 60. He can still carry on working and contributing to his pension at that point.

If it's all continuous service he'll have only joined the 2015 scheme in April 2022, when they closed the 1995 scheme. So he'd have 22 years in the 1995 scheme, and 2 years in the 2015 one.

I think they're ignoring it because it's easier to understand, so their question is about the latter one, which is less easy to understand.

Sorry but I don't think this is correct. I have continuous service and contributed to the 1995 scheme until March 2015 when I moved to the 2015 scheme.

He needs to look at his Total Rewards Statement on ESR. It will very clearly show what pension he has built up across both schemes and what that means practically.

We looked at this last night. The 1995 one is about 5k a year and the 2015 one was about 6k. I think this included taking a lump sum. So currently 11k. He’s been quite a high earner now so pays a lot every month.

I’ll join the fb group, he doesn’t have social media.

Why should he take the 1995 at 55? is there avert to taking then?

Thanks for replies.

My pension are fairly straightforward- they’re all shit and I’ll need to live frugally 😂

Is there any way of accessing this once you’ve left but prior to retiring. I no longer have nhs computer access

I think there’s a weird thing where if you were in the pre 2015 pension they’ve now decided you can choose which scheme you want your 2015 to 2022 pension in. You don’t have to decide until you retire. It makes my head spin to be honest. I may be wrong but I definitely read that.

It's all quite confusing! Is this the McCloud remedy?

That rings a bell.

@CormorantStrikesBack

The Public Service Pension Remedy, sometimes known as the McCloud Remedy will: give affected members a choice of whether they receive 1995/2008 Scheme or 2015 Scheme benefits for their service in the remedy period.

Yes it's the remedy. Everyone has automatically deemed to have remained in the older scheme until 2022. My pension (teacher but I think similar to NHS, correct me if wrong) overall is healthier as I can take the 95 one at 60 with no reduction. Anything showing for my 2015 scheme needs will be reduced pro-rata depending on how early I take it, or I leave it while earning elsewhere and draw it at 67 without a reduction.

Have they not provided a pension statement?

If the 1995 pension was closed and then deferred it may be better - as it will definitely be defined benefit (set amount in benefits) rather than defined contribution (set amount in contribution). So I wouldn't ignore that.

In his current pension defined contributions (a lot of public service ones) have changed to this

Yes that’s right. He can choose to have been in the 1995 until April 2022. 2015 thereafter.

No they are both defined benefits. 1995 is final salary based and 2015 is career average.

The NHS pension is not straightforward. He needs to go onto his NHS ESR (electronic staff record) and find his TRS (total rewards statement). Thy will tell him quite clearly what he has. He’ll have a lot more in his pension that that if he’s been paying in for a while. Until 2014 all staff put in 6% of their salary and the workspace contribution was about 20%. From 2014 it’s been a tiered contribution depending on pay.

As a PP said there are actually 3 separate NHS pension schemes with slightly different benefits. 1995, 2008 and 2015. Everyone got migrated to the 2015 scheme in 2015. But because this has been found to be discriminatory there will be an option to put 2015-2022 contributions in the 1995 scheme. This is the McCloud judgement. It’s a mess.

You can request pension statements from NHS BSA by email which might help.

Thanks @SnakesAndArrows

The 1995 might worth an awful lot then - especially when you consider that PI will be added.

(I work in IT for a provider of a public sector pension)

This explanation is clear and helpful. As I understand it there is no benefit to delaying taking the 1995 pension after the age of 60.