The National Health Service Pension Scheme Regulations 1995

PART C E+W+S Pensionable pay, pensionable service and qualifying service

Meaning of “pensionable pay" and “final year’s pensionable pay" E+W+S

C1.— [F1 (1) In these Regulations, “pensionable pay” means, subject to the provisions of this regulation—

(a) all salary, wages, fees and other regular payments made to a member in respect of pensionable employment as an officer, but does not include bonuses, payments made to cover expenses or payments for overtime;

(b) pensionable earnings calculated in accordance with paragraph 3, or as the case may be, paragraph 4 of Schedule 2 in the case of a non-GP provider who does not receive any of the payments referred to above in respect of his pensionable employment as an officer by virtue of the application of these Regulations to him as if he were such an officer under regulation R1.]

(2) Subject to paragraph (3), any amount by which a member’s pensionable pay exceeds the permitted maximum will be ignored when calculating the amount of any contributions or benefits payable under these Regulations.

[F2 (3) In the case of a member who—

(a) joined the scheme before 1st June 1989 and has a break in pensionable employment on or after that date—

(i) any pensionable pay earned preceding the break in that employment in excess of the permitted maximum will not be ignored;

(ii) any pensionable pay earned after the break in that employment in excess of the permitted maximum will be ignored;

(b) joined the scheme before 1st June 1989 and to whom sub-paragraph (a) does not apply, pensionable pay in excess of the permitted maximum will not be ignored.]

[F3 (3A) Where a member who was eligible to be a member before 1st June 1989 joins the scheme on or after that date by virtue of being a person to whom regulation B5 applies, any amount by which that member’s pensionable pay exceeds the permitted maximum will not be ignored when calculating the amount of any contributions or benefits payable under these Regulations except in relation to a period following a break in pensionable employment on or after that date.]

(4) For the purposes of [F4 paragraphs (3) and (3A)], no account shall be taken of a break in pensionable employment if—

(a) the member returns to pensionable employment within 12 months after leaving;

(b) the break is due to the member’s secondment or posting to another employer and, at the time of the secondment or posting, the member has a definite expectation of returning to pensionable employment when the period of secondment or posting ends;

(c) the break is due to the member being engaged in other employment which is approved for this purpose by the Secretary of State;

(d) the break is due to the member’s unpaid absence from work and the member returns to pensionable employment within one month after returning to work; or

(e) the break corresponds to the member’s absence from work wholly or partly because of pregnancy or confinement and the member returns to work after the break in exercise of her right under Section 39(1) of the Employment Protection (Consolidation) Act 1978 M1 and returns to pensionable employment no later than one month after returning to work;

[F5 (f) the break is due to the member opting out of the scheme as the result of a contravention which is actionable under section 62 of the Financial Services Act 1986 [F6 or section 150 of the Financial Services and Markets Act 2000].]

(5) This regulation applies to a member in respect of whom a transfer payment has been accepted from a health service scheme in the same way as if the period of employment that qualified the member for benefits under the health service scheme had been pensionable employment.

(6) In these Regulations, “final year’s pensionable pay" means pensionable pay in respect of the member’s last year of pensionable employment, ending on the date the member ceases to be in such employment, or dies, whichever occurs first, except—

(a) if pensionable pay was greater in either or both of the 2 consecutive years immediately preceding the last year, “final year’s pensionable pay" means pensionable pay in respect of the year immediately preceding the last year or, if greater, pensionable pay in respect of the first of those 2 consecutive years; and

(b) if the member was in pensionable employment for less than 12 months, “final year’s pensionable pay" means—

(7) In this regulation, “the permitted maximum" means the same as in section 590C of the Income and Corporation Taxes Act 1988 (earnings cap) M2 .

Textual Amendments

F1 Reg. C1(1) substituted (with effect from 1.4.2004) by The National Health Service (Pension Scheme and Injury Benefits) Amendment Regulations 2005 (S.I. 2005/661), regs. 1(1), 5

F2 Reg. C1(3) substituted (with effect from 1.4.2003) by The National Health Service Pension Scheme (Amendment) Regulations 2003 (S.I. 2003/2322), regs. 1(1)(2)(b), 2(2)

F3 Reg. C1(3A) inserted (12.2.1997) by The National Health Service Pension Scheme and Provision of Information and Administrative Expenses etc. (Amendment) Regulations 1997 (S.I. 1997/80), regs. 1, 4(1)

F4 Words in reg. C1(4) substituted (12.2.1997) by The National Health Service Pension Scheme and Provision of Information and Administrative Expenses etc. (Amendment) Regulations 1997 (S.I. 1997/80), regs. 1, 4(2)(a)

F5 Reg. C1(4)(f) added (12.2.1997) by The National Health Service Pension Scheme and Provision of Information and Administrative Expenses etc. (Amendment) Regulations 1997 (S.I. 1997/80), regs. 1, 4(2)(b)

F6 Words in reg. C1(4)(f) inserted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 483(3)

Marginal Citations

M1 1978 c.44. Section 39 was inserted by section 23 of, and Schedule 2 to, the Trade Union Reform and Employment Rights Act 1993 c.19.

M2 1988 c.1. Section 590C was inserted by section 75 of, and Part I of Schedule 6 to, the Finance Act 1989.

Meaning of “pensionable service" E+W+S

C2.—(1) In these Regulations, “pensionable service" is service which counts both for the purpose of ascertaining entitlement to benefits under these Regulations and for the purpose of calculating them and means, subject to paragraph (2), the aggregate of the following—

(a) any period of pensionable employment in respect of which the member contributes to the scheme under regulation D1 (contributions by members);

(b) any period that was reckonable under the previous regulations as a period of contributing service for the purpose of those regulations;

(c) any period of contributing service that is reckonable under regulation 3 of the National Health Service (Superannuation) (War Service etc) Regulations 1977 M3 (reckoning war service as contributing service under the principal regulations);

(d) any period of pensionable service credited to the member under regulation N1(4) (transfers from other pension arrangements) or as a result of a transfer payment to the scheme under the previous regulations; and

(e) any period of additional service which the member has purchased under regulation Q1 or under regulations 25 or 26 of the previous regulations.

(2) A member’s pensionable service does not include—

(a) any period of employment in respect of which the Secretary of State has paid contributions to another occupational pension scheme in respect of the member;

(b) in the case of a member who has become entitled to a pension (including a preserved pension) under the scheme, any period that was taken into account for the purpose of determining whether he was entitled to that pension, or for the purpose of calculating the amount of that pension;

(c) any period of employment in respect of a temporary additional session; or

(d) any period in respect of which the Secretary of State has discharged her liability to provide benefits under regulation K7 (state scheme premiums), L2 (refund of contributions) or M1 (transfers and buy–outs).

(3) The benefits described in these Regulations will be calculated by reference to a maximum of 45 years’ pensionable service of which only 40 years may relate to the period before the member reaches age 60 (age 55 if the member is a special class officer), and, if the member’s pensionable service exceeds these limits, the amount of the excess will be ignored.

(4) Where the member has pensionable service in excess of the limits described in paragraph (3), the Secretary of State shall select the years by reference to which the benefits are to be calculated and the years selected shall be those which produce the most favourable result to the member.

(5) If, when a member leaves pensionable employment or dies, a payment is made in respect of leave not taken—

(a) the member’s pensionable employment will be treated, subject to paragraph (3),as continuing for a period equal to the period of leave for which payment is made; and

(b) the payment will be treated as the member’s pensionable pay for that period.

(6) In order to calculate the length of a member’s pensionable service, all periods of pensionable service will be added and each resulting period of 365 days (disregarding pensionable service on 29th February in a leap year) will be treated as one year.

Marginal Citations

M3 S.I. 1977/1922.

Meaning of “qualifying service" E+W+S

C3.—(1) In these Regulations, “qualifying service" is service which counts for the purpose of ascertaining entitlement to benefits under these Regulations but not for the purpose of calculating them and means the aggregate of the following—

(a) pensionable service under these Regulations, except any period of pensionable service credited to the member under regulation N1(4) (transfers from other pension arrangements) or any period of additional service referred to in regulation Q1 (right to buy additional service);

(b) where a transfer payment has been accepted under regulation N1(4) in respect of the member’s rights under another occupational pension scheme, a personal pension scheme, or a buy–out policy, the period of employment that qualified the member for those rights; and

[F7 (ba) in the case of a person who—

(i) has become a member on the transfer of his employment to a new employer as a result of a transfer of an undertaking to that employer, and

(ii) has rights under another occupational pension scheme to which he was eligible to belong in his former employment in respect of which no transfer payment has been accepted under regulation N1(4) or N4,

the period of employment that qualified the member for those rights;]

(c) any period reckonable as “service" under the previous regulations.

(2) If a member leaves and subsequently returns to pensionable employment, paragraphs (3) and (4) will apply for the purpose of calculating the member’s qualifying service.

(3) If the interval between leaving and rejoining pensionable employment does not exceed one month or is due to a trade dispute, the member’s pensionable service before and after the break will be treated as continuous for the purpose of calculating the member’s qualifying service after the break, (even if the member’s pensionable service before and after the break is otherwise treated separately for the purpose of calculating the member’s benefits) except that the interval will be excluded.

(4) If a member is entitled to a preserved pension under regulation L1 in respect of the earlier period of pensionable service (whether or not the pension has become payable), and the periods of pensionable service before and after the break are not treated as continuous under regulation L4, the period of pensionable service to which that pension relates will be treated as qualifying service in relation to the later period.

[F8 (4A) Where a member who is employed on a casual basis—

(a) ceases to pay contributions because of a break in his pensionable employment of a period not exceeding three months, and

(b) re-enters pensionable employment on the same basis after the break,

for the purposes of these Regulations he is treated as continuing to be in qualifying service (but not pensionable service) during the break, and as not being required to rejoin the scheme when he re-enters pensionable employment.]

(5) If a pension becomes payable to a member under regulation R4(6) (members doing more than one job) and the member has elected to take a benefit only in respect of the employment that has ended, the pensionable service in respect of which that benefit is calculated will be treated as qualifying service in relation to the employment in respect of which rights to benefits continue to accrue.

(6) If the member is a whole–time chaplain, any period of employment as a whole–time chaplain before joining the scheme will be treated as qualifying service.

Textual Amendments

F7 Reg. C3(1)(ba) inserted (5.4.2002) by The National Health Service Pension Scheme (Amendment) Regulations 2002 (S.I. 2002/561), reg. 1(1)(b), Sch. para. 2(a)

F8 Reg. C3(4A) inserted (5.4.2002) by The National Health Service Pension Scheme (Amendment) Regulations 2002 (S.I. 2002/561), reg. 1(1)(b), Sch. para. 2(b)