On the go: The Department of Health and Social Care has published a consultation into changes to be made to the NHS Pension Schemes to accommodate the McCloud remedy.
The DHSC joins the Cabinet Office, the Home Office and the Ministry of Defence in proposing draft measures to alter scheme regulations, with the goal to put phase one of the remedy in place before subsequent consultations on phase two launch next year.
Phase one is concerned with moving all members from legacy into reformed schemes by April 1 2022, when the legacy schemes will be closed.
Phase two will concern the choice members will have to make with respect to the transition period, which accounts for all service between April 1 2015 and March 31 2022. Most public sector schemes have opted for a deferred choice underpin, under which members will be able to choose between the benefits accrued under both the legacy and the reformed schemes and pick the larger of the two.
The only exception so far is for members of the Judicial Pension Scheme, which will offer its members an immediate choice.
“Members transferring to the 2015 NHS Pension Scheme will retain a final salary link, so that their 1995 and/or 2008 NHS Pension Scheme benefits are calculated using pensionable pay at retirement rather than the point of transfer. The transfer will happen automatically and requires no action by members,” the consultation explained.
Similar to other consultations concerning other public sector pensions, it contains provisions concerning the payment of ill-health benefits, as well as establishing protections for benefits built up in the legacy scheme to ensure they are paid out using “arrangements equivalent to the final salary link for other scheme members”.
This will include the creation of a “flexibility earnings credit” to accommodate common working practices among members of the NHS scheme; for example, those who begin their careers training as hospital doctors — under the final salary section of the scheme — before moving into general practice.
The department has not “identified additional benefits, costs or wider impacts” flowing from the proposed amendments, “as these are consequential in nature and designed to deliver the bill requirements, which have been assessed by HM Treasury”, the consultation stated.
“The department has considered the impact of the proposals in context of this duty and we invite respondents to help refine this initial analysis by contributing further perspectives or identifying where there might be equality impacts to consider.”
The consultation closes on January 20 2022.
