In 2015 the government made changes to the majority of public service pension schemes. These reforms did not apply to members closest to retirement, who stayed in their legacy schemes with ‘transitional protection’.
Members with full protection did not have to move to the reformed 2015 Scheme at all. Members with tapered protection could stay in their existing scheme for longer than members without any transitional protection.
The Court of Appeal later found that this discriminated against younger members in the judicial and firefighters’ schemes. The government accepted that this discrimination existed in all schemes where transitional protection was introduced. It is sometimes referred to as the McCloud judgment.
The government is removing this discrimination from all public service pension schemes and in July 2020, it published a consultation to look at how best to do this.
The consultation set out two ways of asking affected members to make a choice:
- in the near future – this is called the immediate choice exercise
- when you retire – this is called the deferred choice underpin (DCU)
The government published a consultation response in February 2021. The government has now decided to implement a ‘deferred choice underpin’ which was the preferred approach for the majority of respondents to the consultation.
Read more about the consultation findings on the government’s website.
The changes are being made in 2 parts.
To make sure equal treatment going forward, from 1 April 2022 all active members of the NHS Pension Scheme will be members of the 2015 Scheme.
Affected members will also be offered a choice about their pension benefits for the period when the discrimination occurred, known as the remedy period. This choice will be given at retirement.
Moving to the 2015 Scheme
From 1 April 2022, all active members of the NHS Pension Scheme, regardless of their age, will be members of the 2015 NHS Pension Scheme. This means members who previously had full protection, will move to the 2015 Scheme on 1 April 2022.
The 1995/2008 Scheme will close on 31 March 2022 and all future accruals from 1 April 2022 will be within the 2015 Scheme.
Members will keep the pension benefits they have accrued in the 1995/2008 Scheme before 1 April 2022 and will be able to access these benefits in the same way and at the same time as they can now.
You can read more about this change on our Your NHS Pension after 1 April 2022 webpage.
We’ve written to all members of the 1995/2008 Scheme who had full protection to inform them that they'll move into the 2015 Scheme on 1 April 2022.
You can read copies of the letter:
The changes needed to move a member into the 2015 Scheme will happen automatically.
Processing retirement applications from members with full protection
In December 2021 we shared information on processing retirements for members with full protection who will move to the 2015 Scheme on 1 April 2022:
We've received some queries about processing applications from members who will move into the 2015 Scheme before 1 April 2022.
If a member had tapered protection and is due to move into the 2015 Scheme before 1 April 2022, the processes for handling applications for retirement remain the same. Applications should be uploaded after the member's transition date in the 2015 Scheme and their pension will be correct first time and accurately reflect both their 1995/2008 Scheme membership.
If a retirement application from a member who had full protection has been submitted before April 2022
Where a member who had full protection has applied to retire in April 2022, a sub award may be required as set out in the process for retirements above.
Some retirement applications received prior to 1 April 2022 will automatically process through the system as a legacy scheme award even though the payable date is after 1 April 2022. An interim letter will be sent to the affected members to advise their benefits will need to be revised.
A sub award will then be calculated to revise their legacy scheme benefits up to 31 March 2022. For their 2015 Scheme benefits from 1 April 2022, the member will be given options to:
- defer their 2015 benefits until their 2015 Scheme retirement date (if not already reached)
- claim their 2015 benefits, adjusted in line with their retirement age (reduced if not at retirement age or increased if a late retiree)
- commute their 2015 benefits, taking them as a lump sum
The options to claim 2015 benefits adjusted in line with retirement age or commute 2015 benefits will be offset against any overpayment made when calculating their provisional legacy scheme award.
If you’re calculating estimates for 1995/2008 members with full protection, you should only do so up to 31 March 2022 using details of their 1995/2008 membership.
Changes to member contributions
Following a consultation undertaken by the Department of Health and Social Care (DHSC) changes are being made to member contribution rates from 1 April 2024.
You can read the consultation response via NHS Pension Scheme: member contributions phase 2 and miscellaneous amendments - GOV.UK (www.gov.uk)
Information for your payroll provider
Ensure you discuss these changes with your payroll provider and that they are aware of the changes to the contribution rates which remain based on actual pensionable pay from 1 April 2024.
Information for you as an employer
Further information on the changes and advice for you as an employer will be available in our updated member contributions changes employer information pack.
Resources for communicating to your employees
We will start writing to members in February 2024 to inform them of the changes.
Read a copy of the member contributions letter for active members (PDF: 176KB).
We have shared information on the changes on our contributions webpage on the Member Hub. If you'd like to direct members to this webpage you can do this using the following shortened URL:
When DCU will be introduced
The government will be introducing new legislation and intends for DCU processes to be in place by 1 October 2023 to support members to make a choice once they retire.
In some cases, members who are eligible to make a choice about their pension benefits will have already started to receive their benefits before the DCU is put in place.
This includes eligible members who have taken age retirement, ill health retirement, early or late retirement or who have died on or after 1 April 2015.
These members will be contacted as soon as possible once the required legislation has been put in place by the government and by the NHS Pension Scheme.
Members will be given the information they need to choose between receiving benefits from the 1995/2008 Scheme or 2015 Scheme for any service between 1 April 2015 and 31 March 2022.
The NHS Pension Scheme will backdate the member’s decision to the date their pension benefits were first paid. In some cases, this might mean members are due an extra payment, and this will be paid to them as soon as possible after they’ve made their choice.
Where an eligible member has died, their beneficiaries or their personal representative will be contacted to make a choice.
There are also a number of areas where further clarification is needed before NHS Pensions can contact these members, such as how the changes will impact tax and death benefits. We’re working closely with government to clarify these.
For now, all our processes remain the same and there is nothing members need to do. We’ll contact all affected members directly when they need to take action.
Any queries about members’ pension benefits at this time will be handled based on their current scheme membership.
Supporting your employees
It’s our priority to help members who are affected to choose their pension scheme benefits with confidence.
We’re working closely with the Department of Health and Social Care (DHSC) to create the processes and information they’ll need to understand their alternative benefits for the remedy period ahead of retirement. This will include the introduction of a pension modeller.
We’re also creating resources to help you to support your members, which will be available on this website.
We’ll keep you updated on our progress and timescales through this website and our monthly employer newsletter.
Finding more information
Visit our Employer Hub for copies of our monthly employer newsletter.
If you have any questions, you’ll find more information on our knowledge base. We update this regularly.
The main contacts for each organisation receive this automatically to the email address we hold on our records.
If you are not the main pensions contact and would like to receive the newsletter, email firstname.lastname@example.org with your name, organisation and email address.