The 2015 Scheme was introduced on 1 April 2015. This scheme has different features to the previous 1995/2008 Scheme, a summary is available below. All new joiners without previous scheme membership will join the 2015 scheme.
Support and guidance
Summary for employers
Career Average Revalued Earnings (CARE) scheme
- Defined benefit scheme which pays a pension based on the average of a member's pensionable earnings throughout their whole career.
- The value of pension earned in each year is calculated using an accrual rate of 1/54th of pensionable pay.
- Revaluation of active members benefits in line with the Consumer Price Index plus 1.5 per cent per annum.
- Normal Pension Age (NPA) at which benefits can be claimed, without reduction for early payment, will be linked to the same age as a member is entitled to claim their state pension.
- No limit on the number of years pension you can build up.
- Final pension calculated by adding together all of the revalued pension earned in each year of membership.
All health service workers who are employed by any of the following and who meet the criteria below, are entitled to scheme membership; NHS organisations, Direction Body, New Fair Deal employer, approved medical/dental contractors or medical/dental practitioners and they must:
- be aged between 16 and 75
- not be entitled to continue membership of the 1995/2008 Scheme
- not be in receipt of pension benefits from the 1995 section (there are a few exceptions).
Contribution rates are the same for members of the 2015 Scheme and the 1995/2008 Scheme. For more information, see our pension contribution and tax arrangements web page.
The 2015 Scheme has the same flexibilities as the 2008 section alongside a new provision; Early Retirement Reduction Buyout (ERRBO). Taking benefits before NPA results in them being reduced for early payment. Members or employers can pay additional contributions to eliminate or lower the amount of reduction that would apply. This is restricted to a maximum of three years before the member reaches their NPA. Read more in our flexible retirement hub.
Transfers in and out
From 1 April 2015 a transfer out to a Defined Contribution (DC) pension scheme, such as a personal pension, is no longer allowed. Transfers into the 2015 Scheme will usually be treated as a monetary amount of pension credit and will be subject to in scheme revaluation.
Breaks in service
Periods of membership can be linked providing there is not a break of more than five years. If there is a break of more than five years the pension earned up to the start of the break becomes deferred. At retirement, these benefits are revalued by adding a pensions increase which currently is calculated as Consumer Price Index (CPI) only which means it will be less than an in scheme revaluation (CPI + 1.5 per cent).
Protection arrangements for members of the 1995/2008 Scheme
Full protection – members who were within 10 years of their NPA as at 1 April 2012 will remain in their current section until they retire or otherwise leave the scheme and will not automatically move to the 2015 Scheme.
Tapered protection – members who were more than 10 years, but less than 13 years and 5 months from their NPA as at 1 April 2012 are entitled to tapered protection. This means they will move to the 2015 Scheme at a future date.
No protection – members who, as at 1 April 2012, were more than 13 years and 5 months from their NPA had no protection and moved to the 2015 Scheme on 1 April 2015.
The 2015 Scheme has important implications for members with salary sacrifice arrangements and those considering them in the future. Employers need to review how staff with these arrangements are informed of the implications. They also need to update relevant policies and processes. Read more about the importance of these changes on our salary sacrifice web page.
Comparison with the 1995/2008 Scheme
NHS Pensions has published a useful comparison of the features and benefits of the 1995/2008 Scheme and the 2015 NHS Pension Scheme. The comparison includes information on the age at which members can retire and differences in how the pension and lump sum are calculated at retirement. The document is available to view on the NHS Pensions website.
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