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Legal changes

NHS Pension Scheme — Age discrimination reversal

We are coming towards the end of the process of reversing age discrimination in the 2015 NHS Pension Scheme.

In a nutshell, when the major changes to the NHS Pension Scheme came into effect, longer-serving members effectively received a longer period of grace in their old pension schemes before moving into the new, less generous 2015 Pension Scheme. In some cases, they did not have to move.

Because those members were largely older, this meant that younger workers, who had less time to build up more generous benefits in their old pension scheme, were discriminated against on the grounds of age. The McCloud judgment, amongst others, required the Government to rectify this discrimination.

This affected most public sector pension schemes, not just those in the NHS. Each is carrying out similar, but not identical, exercises. We have just received more details on how the NHS Pension Scheme will manage this.

The period of pension service covered is 1 April 2015 (when the new 2015 NHS Pension Scheme came into effect) and 1 October 2023, after which time the 2015 Scheme will have made changes so that there is no longer any discrimination (usually called the ‘remedy period’). There will also be the option from 1 October 2023 for people with benefits in the most generous 1995 version of the scheme to take benefits from that scheme without affecting other NHS Pension Scheme benefits.

There will also be a rectification process for those former staff who have already drawn benefits but who might have chosen a different route if it had been offered.

The good news is that scheme members don’t really need to do anything. They should, in due course, receive a ‘Remediable Service Statement’ if they have been affected which will set out their options.

In effect, they will have the choice to stay in the 2015 or ‘rollback’ to their former scheme, which will be the 1995 or 2008 scheme depending on when they started working in the NHS. Whatever works best for them from the options will be permitted.

Of course, this is a major data gathering and assessment process. GPs and dentists, and other similar members who are not directly employed by a major NHS employer, may need to provide more information. If the data you are presented with does not look right, you can of course query it and provide better information so that the offer can be recalculated.

The decision some scheme members have to take will sometimes be obvious – they’re clearly better off one way or another. But for others, it may be more complex, and they may need to take financial advice before making an irrevocable decision.

If in doubt, seek professional financial advice from our experienced pension solicitors or contact Philip Woolham.

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