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Pension Reform - NHS

It is anticipated that the NHS Pension Scheme will change from 1 April 2008 following the recent review.  The consultation process is currently underway and when approved by Scottish Ministers the changes are intended to take effect from 1 April 2008.

This section of the web site provides more information about the proposed changes.  There are 6 sections: -

 

Consultation on draft regulations “The National Health Service (Superannuation Scheme, Pension Scheme and Injury Benefits), (Scotland) Amendment Regulations 2008” (Consultation from 29th July 2008 to 9th September 2008)

The main amendments are to correct minor technical errors,  insert a requirement by Treasury to seek their agreement to any changes in contribution tiers, insert definitions for ease of distinguishing which rules apply i.e. members who are part of the scheme under the 1995 regulations will be members of “the 1995 scheme” and for members who are part of the scheme under the 2008 regulations they will be members of “the 2008 pension scheme”, introduce transitional regulations to cover deferred members of the 1995 scheme who return to the NHS after a break of more than five years, to comply with tax rules for lump sum death benefits for pensioners over 75, to extend pensioning of authorised paid leave to 24 months and to change  ill health rules whereby a member who has a 3 year review period returns to NHS employment, the review period will be 1 year from the start of the new employment or the remainder of the original 3 year period if less. It also includes  one change to the Injury Benefit Regulations to take account of pension that is exchanged for lump sum.”

consultation letter

consultation draft

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A table of information has been prepared to allow employers and members to review at a glance the changes which affect the existing arrangements and the provisions of the new arrangements.  This includes information relating to the "Additional Pension" provision which replaces the current Added Years facility.

A circular has also now been issued providing details for employers on changes to the adminstration for existing scheme members. Circular 2008/2 (pdf 151kb)

In addition a question and answer sheet for existing members with service prior to and post 1 April 2008 has been prepared.

The SPPA is in the process of replacing its current pensions adminstration system this is due to go live in 2008.  The SPPA will be engaging with employers to confirm any changes that employers maybe required to make as a result of these changes.  It is not expected that employers will be required to change the data they provide to SPPA at this stage. 

Employers will be aware that tiered contribution rates are due to be introduced as a result of the Reforms.  The SPPA will be issuing a circular shortly to confirm the adminstrative arrangements regarding implementation. 

All other adminstrative arrangements will be communicated by circular to be issued by 15 February 2008.

Awards forms have been updated to incorporate the changes following the introduction of the new arrangements from 1 April 2008, any members retiring on or after this date should complete the forms post 01/04/2008.  Members retiring prior to 1 April 2008 should complete the forms pre 01/04/2008.

Choice

Active members in the existing amended arrangements will be given an option to transfer to the new arrangements but a choice options exercise is not anticipated to take place until early 2009, at which time all the information required in order to make an informed decision will be sent to members.  A circular has been released providing more information on this subject NHS Circular 3/2008.

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A table of information has been prepared to allow employers and members to review at a glance the changes which affect the current scheme and the provisions of the new scheme.  This includes information relating to the "Additional Pension" provision which replaces the current Added Years facility.

Choice

Members with service pre and post 1 April 2008 and Deferred members with service in the current scheme who return on or before 30 September 2008 or on or after 1 October 2008 after a break of less than 5 years will be able to choose to remain in the existing arrangements.   A circular has been released providing more information on this subject NHS Circular 3/2008.

Active members in the existing amended arrangements will be given an option to transfer to the new arrangments but a choice options exercise is not anticipated to take place until early 2009, at which time all the information required in order to make an informed decision will be sent to members. 

A question and answer sheet for existing members with service prior to and post 1 April 2008 has been prepared.

Members will be aware that tiered contribution rates are due to be introduced as a result of the Reforms. 

All new members who join the pension scheme from 1 April 2008 will be subject to the scheme rules post 1 April 2008 only.

What do I need to do now?

Most members do not need to do anything at this stage however if you are thinking of retiring soon you may find it helpful to read the leaflet “Retiring soon” which can be accessed by clicking on the link.

Also for those members who may be considering buying Added Years you should note that this facility is being replaced. From 1 April 2008 scheme members will be able to purchase Additional Pension rather than Added Years. Any person wishing to buy Added Years will need to notify SPPA of their intention to do so before 31 March 2008.

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Calculators

Pension Commutation Calculator (1.4mb)            Additional Pension Calculator (2.0mb)

Guidance/Examples

Additional Pension Information and Examples

NHS Employee booklet (pdf62kb) this leaflet was issued to NHS Staff during Nov/Dec 07

Information for deferred members (pdf 85Kb)

Circular 2008/3 - Issued 6 March 2008.  Providing more details on the Choice 2009 exercise which will be undertaken.

Circular 2008/2 - Issued 28 February 2008.  Guidance on Adminstration arrangements for employing authorities to implement scheme changes for existing members.

An Equality Impact Assessment has been carried out on the changes to the NHS pension scheme in Scotland  and the results of which can be accessed here Equality impact assessment 2008

Previous consultation and survey documents can be accessed by following the link at the top of this page