Taking a break? What does a career break mean for your NHS Pension Scheme?
Where you have agreed an unpaid leave of absence with your employer it is time to think about your NHS Pension Scheme and what impact your career break will have upon your retirement plans.
First of all, you can continue to contribute to your NHS Pension for a limited time. This will mean that your NHS Pension benefits will continue to grow. In fact you can continue to pension a period of authorised absence up to 2 years providing you have paid your pension contributions continuously for the first 6 months of your break. Your pension contributions will be shared between yourself and your employer (as they are now) for the first 6 months however for the following 18 months you will be reponsible for the entire pension contribution - both employee and employer. It is worth noting that the employer contribution rate is 14.3% of your pensionable earnings. The level of your employee contributions will be based upon your pensionable pay in the 365 days before the career break. If you change your mind, you can opt out of paying the contributions at any time.
As long as you continue to contribute towards your NHS Pension throughout your period of absence then this period will be treated as pensionable for the purposes of assessing your NHS Pension benefits. Your service will accrue at the same rate as applied immediately before the break (i.e whole time or part time etc).
If you decide not to continue to contribute to your NHS Pension during your career break then the period will simply be treated as a break in pensionable service and will be ignored when calculating your pensionable service at the point of retirement.
If you have an Added Years contract and you have elected to treat your absence as pensionable then you will need to continue to contribute to Added Years and therefore your contract will contine as planned. Otherwise you can decide to terminate your Added Years contract but will be unable to start a new contract when you return.
If you have an Added Years contract and have elected to treat your absence as non-pensionable then you will not accrue added years during the period of absence. If you then return to NHS employment within 365 days you will be then able to continue your Added Years contract albeit will have been reduced to account for the time of non-contribution. If you return after 365 days then your Added Years contract will be deemed terminated and you will not be able to start a new contract.