A presentation for NHS Trade Unions 22 October 2014James Davenport / Stephanie Leary

2015 NHS Pension Scheme

Ask the experts

Contents

• Introduction• Recap of previous webinars• ‘You asked, we said…’• Communications update• Further support and information• Questions• Contact details.

Recap: Webinar one

• Background – why the scheme is changing

• How the 2015 Scheme works and changes to Normal Pension

Age (NPA)

• How career average is different to the 1995/2008 Scheme

• An overview of the protection arrangements

• Pre-2015 benefits

• New Governance arrangements and increased role of The

Pensions Regulator (TPR)

• Slides and audio.

Recap: Webinar two

• Features and benefits

• Membership

• Breaks in membership

• Contributions

• Flexibilities

• Retirement

• Early Retirement Reduction Buy Out (ERRBO)

• Slides and audio.

Recap: Webinar three

• New joiners/re-joiners

• Existing benefits

• Retirement options

• Additional Voluntary Contributions (AVCs)

• Special class/MHOs

• Governance

• What you need to do

• Slides and audio.

You asked, we said…

What are the main features of the 2015 Scheme?

• Effective from 1 April 2015

• A build up rate of 1/54th

• Each year's pension revalued by agreed factors linked to inflation plus 1.5 per cent

• Final pension is calculated by adding together all the revalued annual pensions

• Normal Pension Age (NPA) is linked to State Pension Age (SPA)

• Flexible retirement options

• Range of partner, ill health and life assurance benefits.

What will happen to pre-2015 benefits?

• remain in the 1995/2008 Scheme as appropriate

• treated separately at retirement

• calculated in accordance with the rules of the 1995 or 2008 Section as appropriate

• can be claimed at the member’s existing NPA.

When can pre-2015 benefits be claimed?

• Pre-2015 benefits can be taken unreduced at the members existing NPA (age 55, 60 or 65 as appropriate)

• Where the benefits are taken from the 1995 section, the member cannot build any further pension rights in the 2015 Scheme

• Where the benefits are taken from the 2008 section, further pension rights can be built in the 2015 Scheme.

What happens to breaks in membership?

• Membership periods separated by a continuous break, of five years or less, link together

• The in-scheme revaluation rate applies to benefits built up before the break

• A break of more than five years ends the link with the in-scheme revaluation rate

• Previous benefits would be revalued by applying a ‘Pensions Increase’ only.

What happens to added years and additional pension contracts?

• Members without full protection can continue to make additional contributions whilst a member of the 2015 scheme, up to the chosen end date or up to their last day of membership in the 2015 Scheme, if earlier.

• Members of the 1995 section only will be able to claim the value of the added years or additional pension benefits from the payable date of the contract without the need to claim all their 1995 section benefits and without the need for a 24 hour break.

What is ERRBO and how much will it cost?

• Early Retirement Reduction Buyout or ERRBO

• Members or employers can pay additional contributions to eliminate or lower the amount of reduction if benefits are taken before NPA

• Maximum reduction of three years and but not before age 65

• The amount of additional contributions depends on the member’s age and the number of years

• Additional contributions are paid together with regular contributions each year up to the chosen early retirement age

• NHS Pensions will notify employers of the rate of AVCs to be deducted if a contract is taken out.

Are there any changes to ill health retirements?

Successful ill health retirement applications under the 2015 Scheme will be calculated as follows:

• Tier 1 – the value of the pension benefits pre and post 2015 paid without reduction for early payment but without any enhancement.

• Tier 2 – the value of pension benefits pre and post 2015, plus an enhancement known as the ‘tier 2 additional amount’ calculated on the 2015 Scheme benefits only.

Tier 2 additional amount:

• Additional amount is pro rata of the 2015 Scheme tier 1 pension

• Calculated by reference to the member’s actual service plus half of their prospective service to their NPA.

Will members lose HMRC protection because of the 2015 Scheme?

• As the 2015 Scheme is a new scheme, rather than a new section of an existing scheme, HMRC have confirmed that Enhanced Protection, Fixed Protection 2012 and Fixed Protection 2014 will be lost when a member joins the 2015 Scheme and pays pension contributions

• To inform members about this impact and possible action to take, we have published a new factsheet on our website

• It is important that you bring this to the attention of anyone who may be affected.

Are there any changes to local scheme administration?

• No changes will be made to the ESR, if you use this facility, please continue to update member records as normal

• Implementation of a new pensions processing operating system from 7 April 2015 will introduce more robust validations

• Pensions Online: from 7 April 2015 new functionality will become available to give users the opportunity to delete employments, this replaces the current process.

• Please be aware that there will be no POL functionality for the 2015 Scheme initially. For example you will not be able to produce estimates for these members.

Will there be new forms and guides?

• Areas affected by 2015 Scheme from 1 April 2015 are Ill Health, Bereavement, Transfers and Added Benefits

• The forms and guides for these areas have been prioritised to be ready 1 for April

• The updated versions will be available on the NHS Pensions website and the following is a list of printed forms that will be available to order from stationery stores:

• AW8• AW8P• AW33E• RF12• Leaving early and transferring out guide• Transfer in guide.

Why is there a POL downtime?

• Pensions Online will not be available from 6pm on 27 March 2015 until 12pm on 7 April 2015

• During this period NHS Pensions will:• Transition all member data over to a new operating system• Introduce 2015 Scheme functionality• Identify and update the member records to correctly reflect

which scheme members will be in from 1 April.

• Employers are asked to organise their workloads around this downtime

• We apologise for any inconvenience caused

• Any further updates will be posted on the POL homepage.

Communications for members

• 2015 member scheme guide

• Online videos https://vimeo.com/118259155

• Payslip leaflet for members

• Member identifier

• Supporting information at:

http://www.nhsbsa.nhs.uk/Pensions.aspx.

NHS Pensions support for employers

• 2015 readiness check list and communications pack

• General information: http://www.nhsbsa.nhs.uk/pensions

• 2015 Scheme specific: http://www.nhsbsa.nhs.uk/Pensions/4017.aspx

• Ask Us – The NHS Pensions knowledge base

• For 2015 Scheme queries you can email us

• The employer helpline is open 8:00-18:00 Monday to Friday: 0300 3301 353.

Your questions

Contact details

• 2015 Scheme specific webpages: http://www.nhsbsa.nhs.uk/Pensions/4017.aspx

• For 2015 Scheme queries you can email us

• The employer helpline is open 8:00-18:00 Monday to Friday: 0300 3301 353.

NHS Employers support

• www.nhsemployers.org/pensions

• Webinar slides and audio

• 2015 Scheme example presentation - designed for you to adapt and tailor to suit your organisation and deliver to staff

• for employer enquiries about the new arrangements you can email: pensions@nhsemployers.org.