Please note the deadline for submitting Expression of Interest forms to NHS Pensions.
The Early Retirement Reduction Buy-Out (ERRBO)
ERRBO is a facility which enables 2015 NHS Pension Scheme members to retire before their Normal Pension Age and take their retirement benefits without reduction. The Normal Pension Age for those in the 2015 NHS Pension Scheme is State Pension Age (SPA) and this may of course rise during the course of membership.
Background to the Early Retirement Reduction Buy-Out (ERRBO)
In the new 2015 NHS Pension Scheme your Normal Pension Age (NPA) is linked to your State Pension Age (SPA). Only for members of the 2015 NHS Pension Scheme there exists the option to buy-out the reduction that would have applied if your take your 2015 benefits before your SPA. This is the 'ERRBO Agreement'.
The ERRBO Agreement can be for a retirement of up to 1, 2 or 3 years before your NPA but not before the age of 65.
The ERRBO Agreement will set out the rate of your additional contributions based upon your age and the number of years' reduction being bought out. This is an overall limit on the amount of additional NHS Pension Scheme contributions you can make which includes any contributions towards Additional Pension (AP). Therefore if you are already contributing towards AP this may limit your contributions to ERRBO.
An application for an ERRBO Agreement must be made within 3 months of joining the 2015 NHS Pension Scheme for it to be effective from your first year. Therefore in effect this means the deadline for getting your ERRBO Expression of Wish forms to NHS Pensions is 30th June 2015.
The Cost Of The ERRBO Agreement
This of course depends upon your age (and therefore years to go before your Normal Pension Age) and the number of years reduction that you have chosen to apply for under the ERRBO Agreement. Full details of costs are available on request but as an example the percentage of pay required as an additional contribution for say a 45 year old wishing to buy-out 3 years would be 4.11%.
On submitting of your ERRBO Expression of Wish form to NHS Pensions a quote will be provided to you which will detail the required costs to you under the Agreement.
Termination OF Your ERRBO Agreement
If you wish to terminate your ERRBO Agreement you can do at any time. If you have been paying into it for less than a year then your contributions will be refunded to you in full. If you cancel after 1 year then the buy-out period is limited to the end of the previous year's contributions and any contributions made in the year of cancellation will be refunded.
If you require additional information regarding the new ERRBO facility or need a financial review to determine whether it is right for your in the context of your overall circumstances then please get in touch on firstname.lastname@example.org or telephone 0117 966 5699.