The RCM are unable to give any individual advice about pensions, this webpage includes a brief overview of the 2015 pension scheme along with links to relevant NHS Business Services Authority Briefings. The RCM is however a member of the pension Scheme Advisory Board (SAB) which covers England and Wales and enables us to influence the scheme as a whole on behalf of our members. SAB membership also includes other NHS trade unions, employer representatives, the Department of Health and advisors including actuaries, lawyers and auditors. The SAB aims to work in partnership to provide advice to the responsible authority on the desirability of changes to the scheme and also respond to policy issues or to proposed changes to the regulations governing the scheme.

The main elements of the pension scheme are:

  • A career average pension with an accrual rate of 1/54
  • Retirement age equal to state pension age
  • Average pension contributions of 9.8% (currently 6.5%)
  • All accrued rights to be protected
  • Protection for all those within ten years of their retirement age on 1st April 2012
  • Some protection for those between 10 and 13.5 years away from their retirement age (referred to as ‘tapered protection’)

The 2015 scheme started from 1st April 2015; with the rise in pensions contributions starting in April 2012 and further rises in 2013 and 2014.

The 2015 scheme is a career average pension.

Under a career average scheme, for every year you work, you will earn a proportion of your career average salary. To work out the career average salary, each year's salary will be uprated by inflation, then added together and divided by the number of years worked. The accrual rate in the scheme is 1/54: so for each year you work, you earn 1/54 of your career average salary.

This is better than the 1995 scheme (1/80) and the 2008 scheme (1/60). In essence, you earn a bigger proportion of a smaller amount. The vast majority of midwives and MSWs should see no difference in the amount of pension they earn. 

Working until State Pension Age

The retirement age of the NHS Pension Scheme is equal to your state pension age: currently between 60 and 68, depending on your date of birth. It is likely that the state pension age will increase in the future. If it does, the retirement age will automatically increase. If members retire earlier than the retirement age, their pension is reduced by ‘early retirement factors’ – this is about 5% for each year. However, members of the previous scheme will have ‘accrued rights’, i.e. the pension they earned before the new scheme will be based on their existing retirement age. They may be able to retire earlier than their state pension age.

Contributions

The average contribution will be 9.8%. NHS staff pay different contribution rates dependent on how much they earn (which is based on your whole time equivalent salary).

The contribution rates as of April 2014 are:

Tier

Whole Time Equivalent Pensionable Pay

Contribution Rate

1

Up to £15,431.99

5.0%

2

£15,432.00 to £21,477.99

5.6%

3

£21,487.00 to £26,823.99

7.1%

4

£26,824.00 to £47,845.99

9.3%

5

£47,846.00 to £70,630.99

12.5%

6

£70,631.00 to £111,376.99

13.5%

7

£111,377.00 and over

14.5%

 

Protection of Accrued Rights

All ‘accrued rights’ are protected. This means everything you have earned up until the start of the new scheme (for most members it will be 1st April 2015) is protected; so it will still be linked to your final salary when you retire and will be linked to your current retirement age.

Therefore it will only be the pension you earn in the 2015 scheme that will be based on your career average salary and linked to your state pension age.

Protection for those nearest their retirement age

All employees who are within ten years of their retirement age (on the NHS scheme) on 1st April 2012 did not move into the new scheme. They keep their existing retirement age and final salary pension, however they will have to pay the increased contributions.

To qualify for protection:

  • If you have special class status, your retirement age is 55, so you will need to have been 45 or over on 1st April 2012
  • If you are in the 1995 scheme, but did not have special class status, your retirement age is 60, so you would have to have been 50 or over on 1st April 2012
  • If you are in the 2008 scheme, your retirement age is 65, so you would have to be 55 or over on 1st April 2012.

Tapered Protection

For those employees who were between 10 and 13.5 years away from their retirement age on 1st April 2012, they will move into the new scheme later than 1st April 2015. Therefore they will earn more ‘accrued rights’ in the old scheme.

For more information you can visit the NHS Pension Agency Website.

 

NHS Business Services Authority Briefings have produced the below:

1995/2008 NHS Pension Scheme Guide for members

2015 NHS Pension Scheme Guide for members

NHS Pensions Jargon Buster

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