All change again for the NHS Pension
Nearly 7 years since the introduction of the 2015 Scheme, it is all change again for the NHS Pension scheme from 1 April 2022 as a result of the McCloud remedy.
What is the McCloud remedy?
When the 2015 Scheme was introduced, not everyone employed in the NHS went into the scheme on 1 April 2015. The date they moved into the scheme was based on their age. This happened across all the public sector schemes and the firefighters and judges took the government to court on grounds of age discrimination. They won the case and as a result, the government consulted on how the rectification should take place and this is known as the McCloud remedy.
From 1 April 2022 everyone will move into the 2015 Scheme regardless of their age.
All service between 1 April 2015 and 31 March 2022 will be returned to the 1995 or 2008 sections. This will result in annual allowance calculations being reworked. At retirement, two estimates will be provided showing the impact with and without McCloud.
When is this happening?
Unfortunately, the public sector bodies have been given until October 2023 to publish the legislation which will say how and when this will happen. There are a lot of unknowns to be resolved, particularly for those who have already come out of the scheme to reduce annual allowance charges or prevent Enhanced Protection (EP) being lost.
What do I need to do immediately?
The answer at the moment is nothing as NHS Pensions will contact you once the legislation is in place to make all the necessary changes.
However, there are a couple of exceptions to this:
If you are nearing retirement age, you may want to look at your options as the 2015 Scheme pension has a normal retirement age which is linked to state pension age. Those retiring before October 2023 will have to do so based on the current legislation and will be contacted after retirement by NHS Pensions setting out their options.
If you have EP you may wish to seek immediate advice on whether you join the 2015 Scheme on 1 April 2022 as this would cause your EP to be lost as it is a new scheme.
Contact Claire Hebdige with any queries via email claireh@doddaccountants.co.uk or call 01768 864466.
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