Pensions  

Govt presses ahead with NHS scheme uplifts

“The member contribution structure was designed to give a discounted rate of 5.1 per cent to the very lowest earning members who are earning less than £13,232 a year,” the consultation explained.

“This was intended to support the affordability of the NHS Pension Scheme for members who are earning less than the threshold at the bottom of tier 2 above. 

“These members will all work less than full-time hours and are unlikely to receive income tax relief on their pension contributions if their NHS role is their only source of income, which may reduce the affordability of the NHS Pension Scheme for the very lowest earners,” it continued.

“Consequently, this threshold has been frozen and not increased in line with the AfC pay award.”

Another minor change

The new consultation also covers amendments to amending regulations that inadvertently excluded a group of re-employed pensioners eligible to join the reformed NHS scheme following the passage and implementation of the Public Service Pensions and Judicial Offices Act 2022.

“As a result of that consultation and the PSPJO Act 2022, the legacy and reformed schemes and the transitional regulations were amended to close the legacy scheme to future accrual from April 1 2022 and allow all active members of that scheme to move into the reformed scheme from that date,” the consultation explained.

“As part of those changes, the transitional regulations were amended so that re-employed pensioners of the legacy scheme that were no longer eligible to accrue benefits in the legacy scheme from April 1 2022 would be eligible to join the reformed scheme from that date.”

However, due to an oversight, a small group of pensioners — tier 2 ill-health pensioners with pensions permanently reduced to tier 1 — were inadvertently excluded from the amending regulations, necessitating further amendment of the amending regulations to correct the omission.

“This will permit such pensioners to join the reformed scheme where the first anniversary of their return to NHS employment falls on or after April 1 2022. This provision will have retrospective effect from April 1 2022,” the consultation said.

Benjamin Mercer is senior reporter at Pensions Expert, FTAdviser's sister publication