From 1 April 2015, a new NHS Pension Scheme will be introduced, known as the 2015 Scheme. The new scheme will see a move to a Career Average Revalued Earnings (CARE) scheme for all members rather than final salary and CARE, depending on member type, as the scheme is now. The Normal Pension Age (NPA) will now be linked to the State Pension Age (SPA).
What is Choice 2?The first Choice exercise took place between 2009 and 2012, allowing 1995 Section members to move their membership into the 2008 Section. At the time of the first Choice exercise, the 2015 Scheme was not known about. A key feature of the 2015 Scheme is the increase NPA and had this been known during the first Choice exercise, this may have affected the decision for some members.
The current 1995 Section members who will automatically join the 2015 Scheme will therefore have a higher NPA. For this reason, the 1995 Section members, who do not have full protection, who will join the 2015 Scheme on or after the 1 April 2015, will have another opportunity to transfer their 1995 membership into the 2008 Section. This is called Choice 2.
Which members are affected?The Choice 2 exercise is only available for members of the 1995 Section who do not have full protection under the 2015 NHS Pension Scheme arrangements.
There are two groups who fall within this bracket:
- Members who were 13 years and 5 months or more, away from their NPA as at 1 April 2012
These members have 'no protection' and will join the new Scheme on 1 April 2015.
- Members who had between 10 years, and 13 years and 5 months away from their NPA as at 1 April 2012
These members have 'tapered protection' and will join the Scheme at some point (depending on their age) after 1 April 2015. The range of tapered protection is from 2 months, to 6 years and 10 months.
Members, who were 10 years away or less from their NPA as at 1 April 2012, will have 'full protection' and will not move to the 2015 Scheme.
When will Choice 2 take place?All the 1995 Section members who do not have full protection will be sent a letter distributed via their employers in two tranches:
England & Wales
Tranche 1 - Letters issued over a two week period starting 13 October 2014
Tranche 2 - Letters issued over a two week period staring 3 November 2014
Scotland
After April 2015
Members will have until 16 March 2015 to make their decision.
What are the next steps?If you are unsure how the changes to the NHS Pension Scheme will affect you personally, and if you would to discuss the options open to you, please contact
your local Financial Consultant for more information.