Following a public consultation, the Department of Health and Social Care (DHSC) has confirmed that changes to the member contribution structure for the NHS Pension Scheme will be implemented from 1 October 2022.
Overview of Changes:
1. Member contribution rates will now be based on actual pensionable pay instead of members’ notional whole-time equivalent pay.
Members who work part time would benefit from their contributions more accurately reflecting the amount of pension they are building.
2. Introduce a new contribution structure
The number of contribution tiers in the new structure will be reduced from seven to six, with the top rate for the highest earners also reduced from 14.5 per cent to 12.5 per cent. This will reduce the steepness of the tiering, creating a flatter structure, which is considered to be appropriate in a CARE (Career Average Revalued Earnings) scheme, where all members get the same proportional benefits.
3. Increase tier boundaries each year in line with the Agenda for Change (AfC) pay award.
This will reduce the likelihood of a member moving into a higher contribution tier as a direct result of a national pay award, which has previously led to a net-reduction in the individual’s take home pay. Tier rates are not going to remain the same, rather, these will have changes in the future.
4. The proposed member contribution structure would be phased over 2 years.
This approach was designed to minimise the impact on take-home pay while giving members time to adjust to the changes. The first phase will be implemented on 1 October 2022.
You may refer to the tables below for the old and new contribution tiers.
Contribution tiers until 30 September 2022
Phase 1 Contribution tiers starting 1 October 2022 (latest update 09/09/2022)
Phase 2 Contribution tiers
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