NHS Shared Business Services Pre-Retirement Presentation from the NHS Pension Scheme

1. NHS Shared Business ServicesPre-Retirement Presentation from the NHS Pension Scheme

2. Topics • Checking your payslip • NHS Pension Schemes • Pensions Scheme Benefits • Applying for retirement benefits • Working after retirement • Things to consider coming up to retirement • More Information • Questions

3. Checking your payslip

4. NHS Pension Schemes • 1995 Section – members who joined before 31st March 2008 with an accrual rate of an 80th of your pensionable pay • 2008 Section – members who joined on or after 01 April 2008 and before 31st March 2015 with an accrual rate of an 60th of your reckonable pay – (Choice Exercise 2008) • 2015 Scheme – members who joined on or after 01 April 2015 with an accrual rate of a 54th of your actual pensionable pay • Pensions increase (PI) linked to a measure set by the Government • 1995 and 2008 Sections are based on Final Pensionable Salary • 2015 Scheme is a Career Average Revalued Earnings (CARE) – (No choice as based on your age at 1 April 2012)

5. Which Scheme Am I In?

6. Special Class Status Member of the scheme before 6 March 1995 Nurses, Physiotherapists, Midwives, Health Visitors Lost with break of more than 5 years Can retire at age 55 without a reduction to Pension Benefits Must leave the scheme at age 65 Mental Health Officer – After 20 years membership accrual will double 1995 Section Only

7. NHS Pension Schemes • 2015 Scheme • Full Protection – if you were within 10 years of your Normal Retirement Age at 1 April 2012 you will remain in the 1995 or 2008 Section of the NHS Pension Scheme

8. NHS Pension Schemes • Tapered Protection – if you were within 10 years to 13 years 5 months of your Normal Retirement Age at 1 April 2012 you will have a specified date when you will move to the 2015 Scheme • Your benefits accrued in the 1995 or 2008 Section will be preserved at your specified date under the rules and regulations of these Sections

9. NHS Pension Schemes • No Protection – if you were more than 13 years 5 months from your Normal Retirement Age at 1 April 2012 you moved to the 2015 Scheme on 1 April 2015 • Your benefits accrued in the 1995 or 2008 Section will be preserved at 31 March 2015 under the rules and regulations of these Sections

10. Pension Scheme Benefits 1995 and 2008 Sections Age retirement Whole time Part time Calculating benefits for someone working part time Normal retirement age is 60 for 1995 Section (55 for special classes), and 65 for 2008 Section Calculating benefits for someone working whole time

11. Age retirement – 1995 and 2008 Sections • Normal retirement age is 60 for 1995 Section (55 for special classes) & 65 for 2008 Section • 1995 Section – Pension and Lump Sum based on best of last 3 years pensionable pay - Pension lump sum is normally 3 times the annual pension. • 2008 Section – Pension based on the average of the best 3 consecutive years pensionable pay in the last 10 – Has no automatic pension lump sum • Both Sections have the option to give up some of the annual pension in exchange for a lump sum or a higher lump sum. This is called Pensions Commutation and will be detailed on any Estimates received. • For every £1 of annual pension you give up you would receive an additional £12 lump sum subject to HMRC maximum (25% of the capital value)

12. NHS Pension Scheme For members of the 1995 and 2008 Sections pension benefits are based on: • Your pensionable or reckonable pay at or near retirement • The amount of membership accrued - Cannot exceed 45 years – some restrictions are in place • if Whole time one day for each day work will accrue. • If Part time a proportion of the day will accrue dependant on actual hours worked. • The accrual rate of the Scheme

13. NHS Pension Scheme – Whole Time 1995/2008 Membership History An Employee – SD 75/123456

14. Calculating Your Pension – Whole Time NHS Pension Scheme 1995 Section Pensionable pay = £25,000.00 Membership = 15 years 59 days = 5,534 days Accrual Rate = 80 years x 365 = 29,200 days Pension Benefit Calculation £25,000.00 x 5,534 = £4,738.01 Annual Pension 29,200 £14,214.03 Lump Sum (usually 3 x Annual Pension) Commutation available

15. Calculating Your Pension – Whole Time NHS Pension Scheme 2008 Section Reckonable Pensionable pay = £25,000.00 Membership = 15 years 59 days = 5,534 days Accrual Rate = 60 years x 365 = 21,900 days Pension Benefit Calculation £25,000.00 x 5,534 = £6,317.35 Annual Pension 21,900 £0 Lump Sum (Commutation available)

16. NHS Pension Scheme – Part Time 1995/2008 Membership History An Employee – SD 75/123456

17. Calculating Your Pension – Part Time NHS Pension Scheme 1995 Section Notional Whole Time = £25,000.00 Membership = 11 years 59 days = 4,074 days Accrual Rate = 80 years x 365 = 29,200 days Pension Benefit Calculation £25,000.00 x 4,074 = £3,488.01 Annual Pension 29,200 £10,464.03 Lump Sum (usually 3 x Annual Pension) Commutation available

18. Calculating Your Pension – Part Time NHS Pension Scheme 2008 Section Reckonable Notional Whole Time = £25,000.00 Membership = 11 years 59 days = 4,074 days Accrual Rate = 60 years x 365 = 21,900 days Pension Benefit Calculation £25,000.00 x 4,074 = £4,650.68 Annual Pension 21,900 £0 Lump Sum (Commutation available)

19. Age Retirement – 2015 Scheme • Career Average Revalued Earnings scheme (CARE Scheme) • A normal pension age equal to the State Pension Age • No limit on pensionable membership • Each tax year of actual pensionable pay builds up a pension pot that counts separately towards the build up of final pension benefits • These individual pension pots are re-valued at the end of each tax year rate is determined by Treasury Orders plus 1.50% • Entering into any salary sacrifice arrangement that reduces pensionable pay will have a negative effect on the amount of pension built up in that year

20. 2015 Calculation

21. 2015 Calculation Pension Commutation available

22. Late Payment Increase Pension Benefits increase after normal retirement age Automatically applied by NHS Pensions using factors provided by GAD (Government Actuary’s Department) 2008 section after age 65 2015 Scheme after State retirement age For current and deferred members 2008 section and 2015 Scheme Only

23. NHS Pension Scheme – Trivial Commutation • If the overall value of pension benefits is very small • NHS Pensions will write to you and give you a choice about taking all benefits in one lump sum.

24. NHS Pension Scheme – Voluntary Early Retirement • Voluntary Early Retirement (VER) is available to members over the minimum retirement age • 1995 Section – Minimum retirement age is 50 except for members who joined the scheme on or after 6 April 2006, their minimum retirement age is 55 • 2008 Section – Minimum retirement age is 55 • 2015 Scheme – Minimum Retirement age is 55 • Pension benefits are reduced for being paid early • If you have membership prior to 6 April 1997 your reduced pension must exceed the Guaranteed Minimum Pension (GMP), please contact NHS Shared Business Services for further information

25. NHS Pension Scheme – Draw Down 2008 Section and 2015 Scheme: • Option to take partial retirement from age 55 and receive some of your benefits if you reduce your pensionable pay by 10%: • Reduce working time or • Switch to a less demanding role • You can take between 20% and 80% of your pension benefits and continue to build up future membership • Pension benefits would be reduced if they are taken before your normal retirement age • Option to draw down benefits twice before retiring completely

26. Annual Allowance and Life Time Allowance • Annual Allowance • The amount of tax pension savings a person can make in any one tax year, since April 2014 this is £40,000 year on year • If exceeded within the NHS Pension Scheme an ‘Annual Allowance Pension Savings Statement’ will be issued by NHS Pensions • Member will need to take into account any other pension arrangements and take action on this information to determine if they have a tax charge to pay • Lifetime Allowance • Maximum that can be taken from a Pension without a tax charge, since April 2016 this is £1 million overall • The capital value is (Annual Pension x 20) + Lump Sum = Capital Value • Protection options available • Further information can be found on NHS Pensions website or from HMRC

27. Applying for Retirement Benefits • You will need to terminate your employment • Four- Six months from your retirement date contact NHS Shared Business Services for retirement pack • This includes; • Form AW8 • Estimate (Commutation) • Link to Retirement Guide • Certification Form • Census Form • NHS Shared Business Services calculate pensionable pay based on scheme rules and submit to NHS Pensions • NHS Pensions calculate pension benefits due • The current Paying Agent will pay the pension benefits

28. Claiming Pension Benefits from Multiple Schemes Treated Separately in accordance to the relevant scheme rules. Final Salary Linking is applied Pensionable pay based on figures at retirement If you had a gap in membership of more than five years Final Salary Linking will cease If gap is more than five years pensionable pay will be based on pensionable pay before the gap. Pensions increases added Don’t need a 24 hour break 1995 and/or 2008 section Benefits then moved to 2015 Scheme

29. Claiming Pension Benefits from Multiple Schemes 1995/2008 benefits can be claimed at the NPA or earlier if passed the MPA (Reduced). Relevant Breaks in employment are still required 2015 benefits can be claimed – At the same time (reduced) NPA Anytime between the two Anytime after NPA (late retirement factors added) After claiming 2015 scheme benefits you can re-join the scheme – Have to be under age 75 and not in receipt of 1995 section benefits. 1995 and/or 2008 section Benefits then moved to 2015 Scheme

30. Working After Retirement • Have a break in employment (minimum of 24 hours or one calendar month). Consider your local policy/arrangements • Re-employed on a new contract • 1995 Section - No more than 16 hours per week in first month following retirement • If you are ‘Special Class’ and retire between age 55 and 60 the sum of your pension and the pay in your new job must not exceed your earnings prior to retirement (Abatement) The Paying agent will provide the Annual Earnings Margin. • New employment will not be pensionable – if retiring from 1995 Section • New employment can be pensionable – if retiring from 2008 Section *(excludes organisations who have closed direction status)

31. Things to Consider Coming Up to Retirement • Are you contributing to the NHS Pension Scheme? • Do you know which Scheme or Schemes you are or have contributed to? • Is your membership statement correct? • Have you accessed your Total Reward Statement? • If Voluntary Early Retirement do you have membership prior to 6 March 1997 • Is a GMP test is required? • SBS will do this automatically • Four- Six months from your retirement date • Contact NHS Shared Business Services for retirement pack

32. Things to Consider Coming Up to Retirement Are you returning to NHS Employment Have the appropriate break Must be on a new contract Eligible to continue to contribute to NHS Pension Scheme Will abatement apply? Future Changes to circumstances – Notify the paying agent of any address, bank account, re-employed in the NHS.

33. When will Pension Benefits be paid? If the required notice is given NHS Pensions targets are: To Pay Pension Benefits one calendar month after the retirement date (or from the date at which NHS Pensions receive all the information required to process the award if this was later) NHS Pensions will write to confirm this closer to the time Paid monthly in arrears Can be paid overseas

34. More Information • To Register for Members newsletter: nhsbsa.pensionsmembernewsletter@nhs.net

35. More Information ESR Self Service Government Gateway Once registered your user name and password will be posted to your home address TRS will include an Annual Benefit Statement Total Reward Statements (TRS) obtained via:

36. More Information NHS Shared Business Services Employment Services Desk: Use your usual Payroll/Pensions contact telephone number for your organisation

37. More Information The information provided on these slides cannot override the NHS Pension Scheme rules and regulations and are subject to change. For the most up to date information please refer to NHS Pensions website NHS Pensions website: www.nhsbsa.nhs.uk/pensions NHS Pensions Helpline: 0300 3301 346

38. Any Questions?