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HSC Pensions ServiceWaterside House75 Duke Street
LondonderryBT47 6FP
02871 319111www.hscpensions.hscni.net
WHICH SCHEME AM I IN?
1995 Section. Membership of superannuation scheme started before 31st March 2008
2008 Section. Members who have joined scheme form 1st April 2008 onwards.
What are benefits based on?
Pensionable Service
Pensionable Earnings
Final Pensionable Salary
• 1995 scheme, best of the last 3 years before retirement date.
• 2008 Average of best 3 years from last 10 years before retirement date.
Pension 1995 Scheme.1/80th of final superannuable earnings for each year’s service in the Scheme.
For exampleService: 40 yearsEarnings: £20,000Pension: 1 / 80 x 40 years x £20,000 = £10,000 pa
Pension 2008 Scheme.
1/60th of final superannuable earnings for each year’s service in the Scheme.
For example
Service: 40 years
Earnings: £20,000
Pension: 1 / 60 x 40 years x £20,000 = £13,333 pa
Lump Sum 1995 Only.
3/80ths of final superannuable earnings for each year’sservice in the Scheme.
Example
Service: 40 yearsEarnings: £20,000
Lump Sum: (Pension X 3 ) £10,000 x 3 = £30,000
Option to Increase the Lump Sum
Everyone in 1995 scheme must take the standard lump sum of 3 x pension
This can be increased to 5.36 x pension Paid for by reducing your pension Every £1 of pension ‘Given up’ will
purchase an additional £12 of lump sum
Split Lump sum
Men who are or who have been married
and
who were in the Scheme before 25 March 1972.
Service prior to 25 March 1972 counts at 1/80th for Lump Sum.
Main Differences 1995 - 2008
1995 Scheme 80th Retirement age 60 Death Benefits
(widow/er) Lump sum retirement
payment MHO / Special class 1995
only
2008 Scheme 60th Retirement age 65 Partner death benefits Tax free cash flexibility
1995 –2008 Comparison
Based On 20 yrs service, final salary of £20,000.
1995 scheme 2008 scheme
Pension £5,000 Pension £6,666
Lump Sum £15,000 No Lump sum
MAX Lump sum
Pension £4018 Pension £4286
Lump Sum £26,784 Lump sum £28,560
Part-time Employment
Superannuable service and earnings are changed to equivalent full-time amounts.
For example
(i) 3 years at full-time = 3 years full-time service(ii) 6 years at half-time = 3 years full-time service = 6 years full-time service
Part-time Employment
Your service will be scaled according to the hours you work over your standard hours.
For Example
If you work 20 hrs/40 hrs your service will be scaled. For each year of service you will be credited with ½ year for pension purposes.
For pension purposes your pay will be based as if you were working full-time. eg. If you earn £5,000 part-time then for pension purposes your pay will be £10,000.
Types of Retirement Benefits
Age
Incapacity
Voluntary Early Retirement (Reduced)
Premature (Redundancy etc)
Age Retirement
Must retire from all HSC employments
Payable at age 60 1995 Scheme.
(Age 55 for Special Classes/MHOs) Payable at age 65 2008 Scheme. Monthly Pension (Taxable) Lump Sum 1995 only (Non taxable one-off payment)
Incapacity Retirement
No age limit – must have 2 years membership Permanently incapable of carrying out the duties of your employment
(Tier 1 – no enhancement) Permanently incapable of carrying out the duties of any regular
employment (Tier 2 – enhancement) Must retire from all HSC employments Monthly Pension (Taxable) Lump Sum (Non taxable one-off payment) Return to work, subject to abatement
Voluntary Early Retirement (Reduced)
Must be age 50 or over (55 2008 scheme) Must have 2 years membership Must retire from all HSC employments Benefits are reduced Monthly Pension (Taxable) Lump Sum (Non taxable one-off payment)
Pension Lump Sum
59 94% 96%
58 89% 93%
57 84% 90%
56 80% 87%
55 75% 84%
54 72% 81%
53 68% 78%
52 65% 76%
51 62% 73%
50 60% 71%
Reduced VER Benefits1995 scheme.
e.g. Voluntary early retirement at Age 51
Premature Retirement
Redundancy
Organisational change
Efficiency of the Service
Family Benefits
Life Assurance (Death gratuity)
Survivor pension
(Widow/er, civil partner, nominated partner)
Child Allowance
Life Assurance
In service – twice superannuable pay
Pension in payment – Gratuity may be payable if death occurs within 5 years of pension start date.
Survivors Pension
Pension in payment – (Male member dies)½ the rate of pension payable at date of death
(37.5 % of pension at date of death 2008)
Pension in payment – (Female member dies)½ rate of pension based on members service from 6/4/88
(37.5 % of pension at date of death 2008)
PN1 – Partner nomination Form
Child AllowanceDependant Children
Can be Payable until age 23 – but no later!
unless
Child is permanently incapable of earning a living because of physical or mental infirmity
Taxation Changes
Lifetime Allowance (LTA). Reduced to £1,250,000 from April 2014
HMRC transitional Protection may be available, TBC.
Factor of 20 to be maintained. Pension X 20 + Lump Sum.
Taxation Changes
From April 2014 reduced to £40,000 pa. Factor of 16 to be used to calculate tax liability Liability to be ascertained by trust. Up to 3yrs Unused allowance may be carried
forward
Accrued Pension at end of current PIP:
Based on new Final Salary and Pensionable Service at that date
Accrued Pension at end of previous PIP:
Based on Final Salary and Pensionable Service at that date
Start End
“ Pension Input Period”
Increase in pension growth x 16 = “Pension Input Amount”
PIPs and PIAs
Applying for Benefits
If possible, make your application at least 3 months before your intended retirement date
Pension application form – AW6
Incapacity application form – AW33(IS)
Both forms should be available from Personnel
Any outstanding annual leave will put back your date of retirement
Payment of Benefits
Lump Sum– Non-taxable– One off Payment
Pension– Paid monthly– Last bank day of month– Taxable income
Paid direct to your bank or building society account
Once your Pension is in Payment
Pension increases paid every April(but only from age 55 for VER & Premature Retirement)
Backdated pay awardsYour former employer will notify HSC Pensions
Branch of any backdated pay awards and your benefits will be re-calculated and arrears paid
Change of address/circumstancesNotify Pensions Service
Keeping in Touch
Re-employment in the HSC
Within 1 month of retirement
Your pension will normally be suspended if you do not take a 24 hr break, and if work more than 16 hours per week
After one month
Aged 60 or over?
Yes – Your pension will not be affectedNo – Your pension may be reduced
You cannot rejoin the Scheme unless you have retired on Ill health and are under age 50
Abatement of Pension
Pensioners who return to HSC employment can have their pension abated if their combined income exceeds their earnings prior to Retirement.
Abatement Rules
Abatement rules differ according to your own individual circumstances and the type of pension you receive.
Each member will have a permitted to earn amount which should be checked with Pensions Service prior to taking up any new HSC employment
Abatement Rules
The Pensioner must inform their Employer they are in receipt of a HSC Pension.
The pensioner must inform HSC Pensions Service of their return to HSC Employment.
How is the pension affected
If a member returns to NHS employment after retirement and the pension is subject to abatement, a number of options are open to the member.
1. Reduce their hours in their new employment.
2. Have their pension suspended3. Have their pension adjusted4. Any overpayment of Pension must be
repaid
