In this first of this NHS Pension Scheme series we will consider the background to the reforms and why the NHS Pension Scheme is changing.
The current changes are a result of a study by an independent Commission headed by Lord Hutton into Public Sector pensions. The study was tasked with looking at the future affordability, sustainability and fairness of all Public Sector Pensions. The review started in 2010 and reported its findings in March 2011.
The main recommendations of the Commission were that Public Sector Pensions should move away from the Final Salary method of calculating pension benefits to a Career Average Revalued Earnings (CARE) basis, the Normal Pension Age should be increased to be linked to the State Pension Age and contributions should be increased.
After the recommendations were heard there has been years of consultation and negotiation between the Department of Health and trade unions and employer representatives over the detail of the legal framework that the new pension scheme should take. The BMA argued that NHS employees would "pay more in, receive less back and work for longer".
For the NHS Pension Scheme, this meant that this change would happen from 1st April 2015. A brand new NHS Pension Scheme would in effect be created and most (but not all) existing members would be transferred to it.
All members will have complete protection for their accrued pension rights in the old sections of the NHS Pension Scheme. In addition, some members will have full or tapered protection of their future pension rights depending how far they are from their current normal retirement date.