Govt to push ahead with planned uplifts for NHS Pension Scheme

The Department of Health and Social Care (DHSC) has confirmed that it will push ahead with proposed uplifts to member contribution tier thresholds for the NHS Pension Scheme, ahead of the introduction of a new contribution structure in October 2022.

The plans were confirmed on 8 September, following a recent consultation seeking views on how the pensionable earnings thresholds in the member contribution structure will be uplifted to account for the Agenda for Change (AfC) pay increase announced in July 2022.

This followed a previous consultation on changes to the contributions that members pay into the NHS Pension Scheme, which will come into force from October 2022.

A total of 58 responses were received in the latest consultation, with respondents including the British Dental Association, the British Medical Association, the NHS Business Services Authority, the Royal College of Nursing and the NHS Pension Scheme Advisory Board.

However, the DHSC confirmed that the feedback on the draft regulations was “mixed”, as while 41 per cent of respondents agreed that the draft regulations gave effect to the policy intent, nearly a third (31 per cent) disagreed.

In particular, the scheme administrator, the NHS Business Services Authority, expressed concerns around the administrative implications of having two contribution rate tables with different pensionable earnings thresholds.

In light of this, the DHSC confirmed that the regulations will be amended so that both tables that determine member contribution rates for employed members will be the same, whether they base their contribution rate on their previous year’s pensionable pay or their current pensionable pay.

This aims to allow all members to have their contribution rate determined in accordance with the new contribution structure, which contains the uplifted tier thresholds.

More broadly, the DHSC clarified that where there was disagreement with the proposals, this was largely due to members expressing disagreement with previously consulted on policy, and not disagreement with the proposal to increase the pensionable earnings thresholds in the member contribution structure in line with the AfC award for England.

In addition to this, the DHSC revealed that some respondents took the opportunity to express views on topics related to the NHS Pension Scheme that were outside of the scope of the consultation.

It confirmed that it will proceed with plans to uplift the pensionable earnings thresholds in the member contribution structure, in line with the AfC pay award for England, as well as
plans to amend regulations to correct the omission in relation to pension scheme eligibility.

DHSC will lay the final regulations before Parliament in “due course”, to ensure that the proposed changes will be in place ahead of the introduction of the new contribution structure from 1 October 2022.

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