The National Health Service Pension Scheme Regulations 2008

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations establish a new pension scheme for people employed in the National Health Service on or after 1st April 2008 or in such employment immediately before that date, but not in the pension scheme contained in the National Health Service Pension Scheme Regulations 1995 (S.I. 1995/300) and wishing to join the new scheme.

The Regulations are divided into four Parts, each with Chapters dealing with different aspects of the Scheme.

Part 1 contains introductory material, and sets out the circumstances in which Parts 2 to 4 apply. It also sets out the provisions relating to Scheme reports and accounts and cost sharing.

Part 2 sets out the provisions applying to people working in the National Health Service as Officers.

• Chapter 2.A contains definitional matters. Regulation 2.A.1 contains general definitions. The remainder of Chapter 2.A contains definitions that are relevant for entitlement to and calculation of benefits under the Scheme. Regulations 2.A.2 to 2.A.7 deal with the meaning of “pensionable service” and “qualifying service” and how service is calculated. Regulations 2.A.8 to 2.A.14 deal with “pensionable pay” and “reckonable pay”

• Chapter 2.B sets out the conditions that must be met for a person to be eligible to belong to the Scheme, and also deals with leaving and rejoining it. Most people will become members of the Scheme automatically on entering their employment unless they wish not to belong to it.

• Chapter 2.C deals with contributions to the Scheme. Regulations 2.C.1 to 2.C.4 are about the members’ compulsory contributions. Regulations 2.C.5 to 2.C.7 relate to employers’ contributions and the circumstances in which they can be required to give guarantees, indemnities etc. to cover their contributions. Regulations 2.C.8 to 2.C.17 are about the members’ rights to purchase additional pension by paying extra contributions either by instalments over a period of up to 20 years or by lump sum. Regulation 2.C.11 enables such pension to be bought for a member by the member’s employer.

• Chapter 2.D deals with the pensions to which members become entitled on retirement. Regulations 2.D.1 to 2.D.13 set out different entitlements for those who retire on reaching 65, those who leave earlier, those who retire later with an actuarial increase, those who want earlier payment with actuarial reduction, those who wish partially to retire with only part of their pension in payment, those who retire early with ill-health or on the termination of their employment on the grounds of efficiency or redundancy, and pension credit members. They also enable members whose pay is reduced to have higher paid earlier service treated separately. Regulations 2.D.14 and 2.D.15 enable members to exchange pension for lump sums. Regulations 2.D.16 and 2.D.17 deal with the effect of pension sharing on divorce or nullity. Regulations 2.D.18 to 2.D.20 enable members to allocate part of their pension to others.

• Chapter 2.E sets out the benefits that are payable on the death of a member. It provides for pensions to be payable to surviving spouses, civil partners and other adult dependants and eligible children. It also provides for lump sums to be paid to nominees, adults to whom a pension is payable or personal representatives.

• Chapter 2.F deals with members’ rights under the Scheme to have a transfer payment paid by the Scheme into another scheme, and the right of a member to have a transfer payment from another scheme accepted by the Scheme so that the member is entitled to count further pensionable service in the Scheme. (The rights to transfers out supplement the members’ rights under the Pension Schemes Act 1993 (c. 48). There are special arrangements for those going to or from other public sector schemes, those who transfer in or out with a number of other similar employees, and transfers with EU and other overseas transfers.

• Chapter 2.G deals with members who have more than one period of service that counts for the Scheme because they are re-employed. As a general rule the rights relating to such separate periods of service are dealt with separately, but this does not apply if aggregation of the periods would give rise to more favourable benefits. There are also special rules provide for ill-health pensioners and those transferred out of the Scheme on a transfer of an undertaking.

• Chapter 2.H deals with the abatement of pensions in certain circumstances where pensioners are re-employed in the National Health Service.

• Chapter 2.J contains miscellaneous and supplementary provisions, for example, relating to claims for and payment of benefits, the commutation of small pensions, the forfeiture of benefits in certain circumstances, the deduction of tax and the provision of information relevant for tax purposes and the payment of interest where the payment of benefits or refunds of contributions are late.

Part 3 sets out the provisions applying to people working in the National Health Service as Practitioners, or Out-of-Hours Providers.

• Chapter 3.A contains definitional matters. Regulation 3.A.1 contains general definitions. The remainder of Chapter 3.A contains definitions that are relevant for entitlement to and calculation of benefits under the Scheme. Regulations 3.A.3 to 3.A.6 deal with the meaning of “pensionable service” and “qualifying service” and how service is calculated. Regulations 3.A.7 to 3.A.15 deal with “pensionable earnings” and 3.A.16 deals with out-of-hours providers.

• Chapter 3.B sets out the conditions that must be met for a person to be eligible to belong to the Scheme, and also deals with leaving and rejoining it. Most people will become members of the Scheme automatically on entering their employment unless they wish not to belong to it.

• Chapter 3.C deals with contributions to the Scheme. Regulations 3.C.1 and 3.C.2 are about the members’ compulsory contributions. Regulations 3.C.3 to 3.C.5 relate to employers’ contributions and the circumstances in which they can be required to give guarantees, indemnities etc. to cover their contributions. Regulations 3.C.6 to 3.C.15 are about the members’ rights to purchase additional pension by paying extra contributions either by instalments over a period of up to 20 years or by lump sum. Regulation 3.C.9 enables such pension to be bought for a member by the member’s employer.

• Chapter 3.D deals with the pensions to which members become entitled on retirement. Regulations 3.D.1 to 3.D.9 set out different entitlements for those who retire on reaching 65, those who leave earlier, those who retire later with an actuarial increase, those who want earlier payment with actuarial reduction, those who wish partially to retire with only part of their pension in payment, those who retire early with ill-health or on the termination of their employment on the grounds of efficiency or redundancy, and pension credit members. They also enable members whose pay is reduced to have higher paid earlier service treated separately. Regulations 3.D.10 and 3.D.11 enable members to exchange pension for lump sums. Regulations 3.D.12 and 3.D.13 deal with the effect of pension sharing on divorce or nullity. Regulations 3.D.14 to 3.D.16 enable members to allocate part of their pension to others. 3.D.17 deals with dual capacity membership and 3.D.18 deals with guaranteed minimum pensions

• Chapter 3.E sets out the benefits that are payable on the death of a member. It provides for pensions to be payable to surviving spouses, civil partners and other adult dependants and eligible children. It also provides for lump sums to be paid to nominees, adults to whom a pension is payable or personal representatives.

• Chapter 3.F deals with members’ rights under the Scheme to have a transfer payment paid by the Scheme into another scheme, and the right of a member to have a transfer payment from another scheme accepted by the Scheme so that the member is entitled to count further pensionable service in the Scheme. (The rights to transfer out supplement the members’ rights under the Pension Schemes Act 1993 (c. 48).) There are special arrangements for those going to or from other public sector schemes, those who transfer in or out with a number of other similar employees, and transfers within EU and other overseas transfers.

• Chapter 3.G deals with members who have more than one period of service that counts for the Scheme because they are re-employed. As a general rule the rights relating to such separate periods of service are dealt with separately, but this does not apply if aggregation of the periods would give rise to more favourable benefits. There are also special rules providing for ill-health pensioners and those transferred out of the Scheme on a transfer of an undertaking.

• Chapter 3.H deals with the abatement of pensions in certain circumstances where pensioners are re-employed in the National Health Service.

• Chapter 3.J contains miscellaneous and supplementary provisions, for example, relating to claims for and payment of benefits, the commutation of small pensions, the forfeiture of benefits in certain circumstances, the deduction of tax and the provision of information relevant for tax purposes and the payment of interest where the payment of benefits or refunds of contributions are late.

Part 4 sets out the provisions applying to people who have worked in the National Health Service as both Officers and Practitioners.

• Chapter 4.A deals with the application of Part 4 and contains definitional matters.

• Chapter 4.B compares benefit entitlement under Part 2 and 3 of these Regulations.

• Chapter 4.C provides for the modification of members’ retirement benefits and death benefits under Parts 2 and 3 of these Regulations.

• Chapter 4.D provides for modifications in respect of the calculation of the 45 years pensionable service limit; for certain applications, claims or notices made under Part 2 to act as such for Part 3 (and vice versa); and for the modification of the rules on abatement.

A full regulatory impact assessment has not been produced for this instrument as it has no impact on the costs of business, charities or the voluntary sector.