Removal of age discrimination in NHS pension schemes (McCloud)
Categories
NHS
NHS pension schemes
age discrimination
Update on changes to public service pensions
Members will be aware that over the last few years there have been discussions on how the age discrimination elements related to the introduction of the new 2015 NHS pension scheme might be corrected.
Following a consultation last year, the Government has agreed that all scheme members who joined the scheme on or before 31 March 2012 and who were still members of the scheme on 1 April 2015 will be covered by the exercise. The remedy period covers pensionable service from 1 April 2015 to 31 March 2022. Members will be able to choose if they wish their benefits for this period to be placed in the 2015 scheme or their ‘legacy scheme’ (1995 or 2008).
From 1 April 2022, all NHS scheme members will be in the new 2015 CARE (career average) scheme for future pensionable service. Benefits already built up in either the 1995 or 2008 schemes will be protected. While final communications on this issue are still being developed there is more information available on the NHS Business Services Authority site. The information is relevant for all the NHS Schemes England and Wales, Scotland and Northern Ireland.
You can read the full details here: https://www.nhsbsa.nhs.uk/changes-public-service-pensions
We have outlined below a brief description of the current schemes below:
| Scheme | 1995 | 2008 | 2015 |
| Design | Defined benefit final salary (DB) Pension is determined using 'final pensionable pay' or best of last three years. |
Defined benefit final salary (DB) Pension is determined by using the best pensionable pay in three consecutive years in the last ten. |
Defined benefit career average (CARE)(DB) Pension is determined on each year of pensionable service. |
| Normal pension age (the age that you can take benefits from the scheme without deduction) | 60 | 65 | Equal to the member's State Pension age |
| Accrual rate (the rate that your pension builds up at each year) | 1/80th | 1/60th | 1/54th |
| Is there in service revaluation? | No (not necessary) | No (not necessary) | Yes. CPI+1.25%. Each year of past service has to be uplifted so as to keep its value by the time that you retire |
| Automatic lump sum |
Yes. 3x Pension. Can also take additional cash (commutation) at £12-1. £12 cash for each £1 of pension given up to HMRC limits. eg, if you take £1000 above your lump sum your annual pension would reduce by £83 |
No. Cash can be taken (commuted) in exchange for pension at £12-1 up to HMRC limits. |
No. Cash can be taken (commuted) in exchange for pension at £12-1 up to HMRC limits. |
| Rises to pensions in payment from April next year |
CPI based on previous September level |
CPI based on previous September level |
CPI based on previous September level |