The other area of interest at the moment with regards to NHS pensions is the McCloud remedy. As you may know, members of the NHS pension scheme were transitioned into the new 2015 pension scheme from April 2015, with older members being transitioned later, and some members already nearing retirement being exempt completely from the new scheme. The main difference between the previous 1995 pension scheme and the new 2015 pension scheme is the normal retirement date, which is age 60 for the 1995 pension and linked to state pension age for the 2015 scheme.
The McCloud case was based on age discrimination and the government are now remedying this by reverting all members back into the 1995 pension scheme for the seven-year period from April 2015 to March 2022. All members will then join the 2015 pension scheme from April 2022 regardless of age.
Annual allowance calculations will need to be reworked for this whole seven-year remedy period which is likely to result in reduced annual allowance charges for most members and therefore potential refunds of overpaid annual allowance tax charges (or reductions to scheme pays elections). Some members will however see an increase to their annual allowance charges for this period after the remedy. In these cases, there should be the option of using scheme pays to cover these additional charges if necessary.
NHS pensions are currently working on a plan to implement this remedy and we are hoping for more details on this by October 2023.
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