Govt launches consultation on proposed uplifts for NHS Pension Scheme

The government has launched a consultation on proposed uplifts to member contribution tier thresholds for the NHS Pension Scheme, ahead of the introduction of the new NHS Pension Scheme contribution structure.

The Department for Health and Social Care (DHSC) previously consulted on changes to the contributions that members pay into the NHS Pension Scheme, subsequently confirming that these changes will come into force from October 2022.

Ahead of the introduction of this new structure, the DHSC has launched a consultation outlining how the pensionable earnings thresholds in the member contribution structure will be uplifted to account for the Agenda for Change (AfC) pay increase.

The consultation, which runs until 12 August 2022, outlines the proposed uplifts to the thresholds and is accompanied by draft amending regulations to give effect to these threshold changes.

In its initial consultation, the DHSC acknowledged that there are different processes for determining the pay award for different parts of the NHS workforce, clarifying, however, that it is important that the tiers are kept consistent for all members.

As a result, it proposed that the earnings ranges in the contribution tiers would be increased each year in line with the AfC pay award because this is the pay award that applies to the highest number of NHS Pension Scheme members, meaning that the contribution tiers would remain consistent across all areas of the NHS workforce.

This proposal also received support during the consultation process, with 67 per cent of respondents agreeing that the thresholds should be uplifted in accordance with the AfC pay award.

However, the DHSC clarified that it is policy to set out the thresholds in regulations and therefore they must be updated year on year.

In light of this, and in an effort to streamline this process, the department has therefore proposed to put the draft amending regulations out to a short consultation in order to "enact new legislation as swiftly as possible after the pay award has been announced".

The consultation stated: "While it has already been decided through the previous consultation that the thresholds in the member contribution structure will be uplifted to reflect the AfC pay award, respondents are invited to assess whether the AfC pay award has been properly reflected in the proposed amendments.

"Respondents are also invited to provide commentary on the draft amending regulations."

More broadly, the DHSC also proposed making a technical amendment to correct a previous omission from the 2022 Transitional Regulations, which resulted in a group of re-employed pensioners having their tier 2 pension permanently reduced to a tier 1 pension.

However, the amendment would allow the affected pensioner group, the 2008 Section tier 2 ill-health pensioners, to join the reformed scheme where the first anniversary of their return to NHS employment falls on or after 1 April 2022, with a retrospective effect.

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