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NHS Pension Scheme Choice Exercise
NAME, GMB
LOCATION
DATE
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Why Have a NHS Pension?
Expectation to retire from work.• Hope to have a source of income to maintain
standard of living
• Life expectancies are increasing
State benefits alone will barely cover necessities
NHS Pensions benefit from tax breaks. Your employer pays towards your
pension.
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NHS Pension Scheme
NHSPS has two sections 1995 section (with a retirement age of 60)
available to all who were employed before 1 April 2008
2008 section (with a retirement age of 65) for new joiners or those returning after 5 years+
Both are final salary sections with different levels of benefit, but the same level of contributions payable
Scheme reviewed recently but under attack – opposition parties & media
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The Pensions Choice
Members have a one-off option to move all 1995 section pensionable service into 2008 section
All pension would be treated as if built up in 2008 section
For under 60’s (as at 1/10/2009) service would be converted on a year for year basis
For 60+ members, service would be reduced on transfer
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NHSPS – What you pay
Members pay same levels of contributions to both 1995 and 2008 sections
Your contribution rate is based on how much
earned in the last year Tier Full Time Equivalent Annual
Pensionable Pay in 2008/092009/10 Contribution
Rate
1 Up to £20,224 5%
2 £20,225 - £66,789 6.5%
3 £66,790 – £105,318 7.5%
4 £105,319 + 8.5%
Contributions are paid on your actual pensionable earnings
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1995 Section – Benefits
Normal Retirement Age of 60 Pension of 1/80th of final pay for
each year of service Automatic tax free lump sum of 3
times the pension (with the facility to give up a part of the pension for a higher lump sum)
Other features
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2008 Section – Benefits
Normal Retirement Age of 65 Pension of 1/60th of final pay for
each year of service No automatic tax free lump sum
(can give up a part of the pension for a lump sum)
Other features
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Delivery of the Choice Exercise
NHSPD delivering Choice Packs to employers Choice packs to include:
Statement Choice Guide DVD Form
Packs to be sent directly to members by employers
NHSPD are reliant on data sent by employer – very important to check
Intended to send these out from January 2010 4 months to make decision
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Choice - What You Should Think About
Nobody (including GMB) can tell you what Choice you should make
Individuals should consider: retirement age additional flexibilities available in 2008 Section
Is the Data on the Statement correct? – you should query anything that looks wrong
Do the projections provided tie in with your retirement plans?
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Resources
NHS Pensions Division www.nhsbsa.nhs.uk/Choice 0300 123 1601
State Pension – The Pensions Service www.thepensionservice.gov.uk 0845 6060265
GMB – Pensions Website www.gmb.org.uk/pensions Queries via rep/Regional Officer
Independent Financial Advice
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Questions?