New pension measures for NHS Scotland staff have been announced

From 1 December 2019, a new interim policy will give eligible NHS staff the option to get employer pension contributions paid as part of their basic pay.

This will be available to all NHS staff who can evidence that they are likely to breach the Annual Allowance in the 2019/20 financial year and generate a tax charge as a result.

What do I need to do?

• If you have received a 2018/19 Pension Savings Statement (PSS) from SPPA you can use this as evidence of eligibility along with confirmation from the HMRC calculator that you are subject to tax charge for 2018/19. The output from the calculator and a copy of your PSS should be sent directly to your employer as part of your application, along with details of your earnings to date for 2019/20, any non-NHS sources of income for year to date and relevant information on any additional non-NHS pensions.

• Alternatively, if you have not received a savings statement for 2018/19, but anticipate that you will be subject to a tax charge in 2019/20, you should email the SPPA at sppacontactus@gov.scot, providing your name, national insurance number, date of birth, as well as details of expected total gross NHS earnings for 2019/20. The SPPA will produce an estimate of pension growth for 2019/20 and a pensions statement, based on the information available for any previous tax years. You should then use this detail to complete the HMRC calculator and provide the result to your employer.

Additional Information

SPPA Guidance for completing the HMRC calculator is available on the SPPA website.

• The SPPA cannot provide any advice regarding these new measures. Memberss are strongly advised to seek independent financial advice beforehand as to whether the REC payment outweighs the benefits of continued membership of the NHS Pension Scheme. Full details on eligibility criteria and the application process to your employer can be found in the Scottish Government guidance.

• Completed REC payment applications, including any applicable evidence provided by SPPA and output from the HMRC calculator, should be sent to your employer no later than 28 February 2020.

• The REC payment is only available to active members of the NHS Pension Scheme who must then opt out of the Scheme on or after 1 December 2019 to access a REC payment from that date. If you wish to opt back in to the Scheme to become an active member you need to advise your employer that you wish to re-join the scheme.

• While opted out of the Scheme you will not be entitled to benefits provided to an active member including life cover, ill health retirement protection and death benefits, and you will not accrue any pension benefit during the opted out period.

• Members who have an ongoing Added Years or Additional Pension contract should be aware that by opting out, payments towards those contracts will cease and you may not receive full entitlement. Members who re-join the Scheme within 12 months can resume their contract. Arrears for the missing period can be repaid for Additional Pension but not for an Added Years contracts.