Pensions

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What happens to my MHO status when I move in to the 2015 NHS Pension Scheme?

2015 NHS pension scheme

Read the monthly updates written by the BMA Head of Pensions over the last year to help you familiarise yourself with the new 2015 NHS Pension Scheme which launched on 1 April 2015.

Start with our general overview of the scheme:

1  Stay one step ahead - get the basics of the scheme
2  When can I draw my pension benefits?
3  Auto-enrolment and National Insurance rebates
4  Opting out of the NHS Pension Scheme
5  Choice 2 exercise
6  Contributions
7  Are you ready for Choice 2?
8  What happens to my Mental Health Officer status?
9  BMA response to the 2015 NHS Pension Scheme draft regulations
10  Have you received your 'Choice 2' letter?
11  Act now to make your choice 2 decision
12  A recap on the basics of the 2015 NHSPS

 

Mental Health Officer (MHO) status is a benefit that was awarded to 1995 section members working full or part-time on the medical staff of a hospital used for the treatment of patients suffering from mental disorders. In order to qualify for and retain MHO status it is necessary to spend the whole or substantially the whole of your time in the direct treatment or care of patients suffering from mental disorders.

 

The benefits of MHO status:

  1. After completing 20 calendar years’ of service in a MHO post every subsequent full calendar year of service in a MHO post is doubled for pension purposes. For example, 30 years as a full-time MHO would count as 40 years.
  2. After 20 calendar years’ as a MHO, it is possible to retire from age 55 with no actuarial reduction of pension. It is not necessary to wait until the normal pension age of 60.

 

MHO status withdrawn

MHO status was withdrawn to new entrants on 6 March 1995 in England and Wales and from 1 April 1995 in Scotland and Northern Ireland.

MHO members who are not eligible for full protection will move to the 2015 NHS Pension Scheme (NHSPS) on 1st April 2015, or at a specified later date if they have tapering protection. On moving to the 2015 scheme they will accrue no further MHO benefits because the MHO provision only applies in the 1995 section of the NHSPS.

 

Protection with Uniform Accrual

MHOs do receive a degree of protection from something called Uniform Accrual, which applies in any circumstance in which they leave the 1995 section.

Uniform Accrual applies where the member could have potentially accrued at least 21 calendar years MHO service at age 55. Uniform Accrual protects the value of previous MHO accrual and provides an improved deferred pension in the 1995 section.

Uniform Accrual applies a pro rata increase to scheme membership at retirement had you retained MHO status and includes any doubled years.

 

The Uniform Accrual formula

Uniform Accrual Formula

Where
"X" is Actual service
"Y" is Potential membership to age 55 excluding doubled years
"Z" is Potential membership to age 55 including doubled years to age 55

Example:

Dr Kane is aged 48 and has 24 years NHSPS service, including 22 years MHO service ("X").
Had he been allowed to remain in the 1995 section until age 55 he would have accrued 31 years service, including 29 years as an MHO ("Y").
This would have resulted in Dr Kane accruing 9 doubled years, meaning that his total service including doubling would have been 40 years ("Z").
When he retires his final pensionable pay is £100,000.

Uniform Accrual Example

The Uniform Accrual calculation would apply in the same way for a member who has tapered protection. Tapered protection allows the member to remain in the 1995 section beyond 1st April 2015.

 

What's next?

Read the next update for December which focuses on our response to the 2015 NHS Pension Scheme draft regulations.

If you have any questions or points to make then please contact the Pensions team