The Department of Health and Social Care (DHSC) has confirmed that it will implement changes to the NHS Pension Scheme to help employers attract and retain valuable experienced staff.
The DHSC consultation outcome has confirmed the following changes:
Contribution rates may change.
- The amount many members pay will stay the same, and some will pay less.
- For members who will pay higher contributions, the maximum increase from 1 April 2024 is 0.8%, which means the difference to contribution amounts is likely to be small.
Employers will contribute more.
- From 1 April 2024, the amount employers pay towards member’s pensions will go up from 20.6% to 23.7% of pensionable pay.
- The difference between 14.38% and 23.7%, will be centrally funded by NHS England.
Contribution tiers are reviewed each year.
- Contribution tiers will be automatically reviewed in line with the % increase in the Consumer Price Index (CPI) on 1 April every year, except for the lowest tier.
Overtime is pensionable for part-time workers, except where a member has recently taken partial retirement.
- Overtime for part-time members counts as pensionable pay, up to their full-time equivalent pay, unless they have taken partial retirement in the previous 12 months.
The Abatement rules will be permanently removed.
- The rules for how a pension might be reduced for Special Class and Mental Health Officer (MHO) members who retire on age grounds but return to work before age 60, have been suspended since March 2020. These rules will be removed permanently.
1995 Section members with maximum service (45 Years) will be able to apply for partial retirement.
- These members can now apply for partial retirement from 1 April 2024, if they have the support of their employer.
Lifetime allowance (LTA) charges will no longer apply.
- HM Treasury announced in March 2023 that the LTA would be removed.
- DHSC has confirmed updates to the relevant Scheme regulations which will make sure these rules continue to work as intended once the LTA is removed on 6 April 2024.
If you would like to discuss the above points in further detail or would like to benefit from an NHS Pension Review, please contact Andy Hall via email on andrew.hall@bhp.co.uk.
