Normal Pension Age (NPA) under the 2015 Scheme is the same as State Pension Age, or age 65 if later. If the State Pension Age (SPA) rises in future, for example if the government decide to increase SPA, the NPA will rise as well.
If you retire before NPA your NHS pension benefits will be reduced. However, an option exists in the 2015 Scheme to pay additional contributions to buy out the reduction that would ordinarily apply on retirement before NPA. This is known as an Early Retirement Reduction Buy Out (ERRBO) agreement.
The agreement can be for early retirement 1, 2 or 3 years before NPA but no earlier than age 65. The rate of additional contributions payable is based on your age at the effective date of the agreement (i.e. on 1 April of the first Scheme year to be covered by the agreement) and the number of years’ reduction being bought out. The additional contributions are payable during each Scheme year that the early retirement reduction is being bought out. Your employer can, if they agree, pay all or part of the required additional contributions on your behalf.
An application for an ERRBO agreement must be made within three months of the beginning of the Scheme year for it to be effective from that Scheme year (or three months from the date of joining in the Scheme year that you join). As the Scheme year begins on 1 April, applications must be received by 30 June to be effective from the start of that Scheme year. Any application made later will only be effective from the beginning of the following Scheme year.
Applications for effect from 1 April 2016 must therefore be made by 30 June 2016.
How to apply
Download an expression of interest form here: http://www.nhsbsa.nhs.uk/Pensions/4017.aspx.
This form is used to enquire about your eligibility to enter into an ERRBO agreement and seek confirmation of the rate of additional contributions you would pay if an ERRBO agreement is possible. To proceed, you will then need to sign and return the agreement document sent to you by NHS Pensions. Your employer will then be instructed to deduct the additional contributions from the effective date.
If you have questions about your retirement plans, including your NHS Pension, please contact Richard Higgs on 0117 966 5699 or email@example.com for advice.