Answers to common queries concerning members who held the Mental Health Officer status in the 1995 section of the scheme prior to becoming members of the 2015 NHS Pension Scheme.
Will I have to join the 2015 scheme?
If, on 1 April 2012, you were aged 45 or over, were in NHS pensionable employment in a MHO qualifying post and were on track to be able to have achieved 20 years or more MHO service before age 60, you will not join the 2015 scheme. You have full protection and will retain your MHO status and have the right to remain in the 1995 section until your chosen retirement date.
If you are not afforded the above protection due to your age you will be required to transfer to the 2015 scheme after which doubling (or the potential to double service) will cease.
If, on 1 April 2012, you were aged between 41 years and 6 months and 44 years and 11 months, were in NHS pensionable employment in a MHO qualifying post and were on track to be able to have achieved 20 years or more MHO service before age 60, you will be afforded tapered protection which will delay the date that you join the 2015 scheme. You will however not be able to retain MHO status indefinitely as you will be required to join the 2015 scheme at some point.
If you were not in a MHO qualifying post on 1 April 2012 but regained such status by 31 March 2015, or by the date on which you should transfer to the 2015 section if later (as a result of tapered protection) then you can gain MHO protection if at that time you are on track to be able to achieve 20 years or more MHO service before age 60.
If you do not have full protection the following questions detail how your accrued 1995 section benefits will be calculated and when they will be payable. Benefits retained in the 1995 section on moving to the 2015 scheme will be based on accrued service at the date you transfer to the 2015 scheme and either on your prospective final salary up until you cease to work in a post that would have qualified for MHO status (Uniform Accrual) or on your final salary at retirement. This alternative final salary link can be lost if you have a break in pensionable service of 5 years or more.
Can I have MHO status in the 2015 scheme?
Once you join the 2015 scheme you are not eligible for MHO status in respect of your prospective service in the 2015 scheme. Doubling of service will cease on moving to the 2015 scheme. However, you may retain a right to access your accrued 1995 section benefits from age 55 onwards. A 'better of' calculation known as Uniform Accrual will be undertaken in relation to your accrued benefits.
What do I need to do to be able to access my 1995 section MHO benefits from age 55 onwards without reduction?
Assuming that you have remained in a role that would have qualified for MHO status you will be able to access your accrued benefits, unreduced, from age 55 so long as the following conditions are met:
- You have completed at least 20 calendar years' of service in a MHO post (including posts which would have qualified for MHO status had you not joined the 2015 scheme)
- You have not had a break in pensionable service of 5 years or more
- You are in a post that would have qualified for MHO status (had you been able to remain in the 1995 section) at the time of retirement
- You retire from all NHS posts held.
You will not be able to continue contributing to the 2015 scheme, should you return to NHS employment, and your choices in relation to those benefits will be to access them early with an actuarial reduction or to defer the payment until you reach your State Pension Age.
If I do not meet the above criteria can I access my 1995 section MHO benefits from age 55 onwards?
You will still be able to access your accrued 1995 section benefits earlier than age 60 but they will be subject to the appropriate actuarial reduction factor relating to the age at which you decide to draw your benefits. Uniform accrual may still apply to the calculation of the benefits if it produces a better outcome. You will not be able to continue contributing to the 2015 scheme and your choices in relation to those benefits will be to access them early with an actuarial reduction or to defer the payment until you reach your State Pension Age. The exception to this is where you have had a break in service of 5 years or more before accessing your accrued 1995 section benefits. This break means that you will have lost the final salary link and can continue contributing to the 2015 scheme.
What criteria needs to be met to satisfy the requirement of being in a post that would have qualified for MHO status?
MHO status usually applies to a doctor working full or part-time on the medical staff of a hospital used for the treatment of patients suffering from mental disorders. You must also spend the whole or substantially the whole of your time in the direct treatment or care of such patients. Although, "substantially the whole time" is not defined in the regulations it is generally accepted as being at least 80 per cent of your work commitment.
Can I regain my MHO status, in relation to my accrued 1995 section benefits, if I leave NHS pensionable employment and then subsequently return?
If you have left the 2015 scheme, with a deferred pension, you must return within five years in order to remain eligible for MHO status in relation to your accrued 1995 section benefits.
Am I restricted on how much service I am allowed to build up in the 2015 scheme?
As a member with accrued 1995 section benefits you will no longer have a maximum service restriction and can continue accruing benefits beyond 45 years of service. This ability will only cease on accessing your accrued 1995 section benefits as you will not be able to continue contributing to the 2015 scheme (unless you have had a break in pensionable service of five years or more).
NHS benefits become payable, if not already claimed, at age 75 and no break in service is needed at this time.
I worked in a MHO type post outside the NHS. Can this service improve my accrued 1995 section NHS pension?
If you carried out MHO type work outside of the NHS, this can be used to count towards the 20 year period required to permit you to access your accrued 1995 section benefits from age 55. Any such service will not count toward the calculation of your accrued 1995 section pension.
If you undertook any of the following work you can apply for this service to be treated as qualifying MHO service which will count towards the 20 calendar years' required to enable you to access unreduced benefits from age 55:
- Work that satisfies the MHO criteria where duties are performed in UK based non NHS institutions
- Work that satisfies the MHO criteria where duties are performed overseas
- NHS work that satisfies the MHO criteria where pensionable service has been refunded or transferred out
- NHS work that satisfies the MHO criteria where you did not contribute to the pension scheme.
The NHS pensions agencies require written evidence of your duties during this non-NHS work, detailing the proportion of work carried out in the direct treatment or care of patients suffering from mental disorders. The NHS pensions agencies will then determine if the work qualifies. The BMA Pensions Department can assist you with these enquiries.
Can I buy Additional Pension?
There may be scope for you to improve your 2015 benefits. Whilst it is no longer possible to begin an added years purchase any ongoing contract can continue after transfer to the 2015 scheme. Added years contracts will link to your accrued 1995 section benefits as will any additional pension (AP) bought prior to moving to the 2015 scheme.
The 2015 scheme continues to enable you to purchase AP. This means you could buy up to £6,500 of additional annual pension to be bought in units of £250. If you purchase AP it is not possible to coordinate the end date of the purchase to coincide with your potential pension age of between 55 and 60 in relation to your accrued 1995 section benefits. 2015 scheme AP contracts can only be paid in full at your State Pension Age. If you access your 2015 scheme benefits before your State Pension Age the AP benefits will be subject to an actuarial reduction.
How does the Annual Allowance affect me?
The Annual Allowance is a restriction placed on the amount of tax relief you can receive as a result of contributing to a pension scheme. If the limit is exceeded then tax relief is clawed back. The Annual Allowance threshold for 2015/16 is £40,000. Please note that from 6 April 2016 the threshold of £40,000 will be tapered and potentially reduce to £10,000 for anyone with threshold income of £110,000 or more. Threshold income is all taxable income less your employee pension contributions.
If you are paying into a defined contribution scheme such as a personal pension it is the amount of contributions paid into the scheme during the scheme year that is tested against the threshold. If you are paying into a defined benefit scheme such as the NHS pension scheme then it is the growth in your benefits during the scheme year which is tested against the threshold. If you contribute to more than one type of scheme then account will need to be taken of all the relevant methods.
As a 2015 scheme member with accrued 1995 section benefits you will need to undertake two calculations to check whether the growth in your NHS benefits have exceeded the annual allowance threshold. The first will be in relation to your accrued 1995 section MHO benefits which will continue to grow as they will be linked to your current pay (so long as you have not had a break in pensionable service of 5 years or more) or to the pay you had when you last worked in a MHO qualifying post (the better of which will be used as per the Uniform Accrual rules). The second will be in relation to your ongoing 2015 Career Average Revalued Earnings scheme accrual. The chances of exceeding the Annual Allowance are greater if you are buying added years or additional pension, or have recently received a significant pay rise or additional pensionable award i.e. a Clinical Excellence Award.
More information on this can be found on the summer budget 2015 page.
Your accrued 1995 section MHO benefits will be subject to a Uniform Accrual calculation.
What is Uniform Accrual?
As you no longer qualify for prospective MHO status your accrued 1995 section benefits will be based on the better of:
Basic pensionable service (1995 section service ignoring any doubling achieved) calculated against your final pay (unless you have had a break in service of 5 years or more).
Basic service = Basic pensionable service (1995 section service ignoring any doubling)
Potential basic service = Potential basic pensionable service (1995 section service) up to age 55.
Potential service = Potential doubled service to age 55 calculated against final pay when you last held an MHO qualifying post (unless you had a break of 5 years).
This 'better of' Uniform Accrual calculation can result in an enhanced service which is applied against the best of the last three years pensionable pay up to when you last worked in a post which would have held MHO status had you still been a member of the 1995 section (unless you have had a break in pensionable service of 5 years or more when your pay will be the best of the last three years pensionable pay up to when you last worked in a post which would have held MHO status before the break).
Please see NHS Pensions uniform accrual examples.
If I leave the NHS when can I access my accrued 1995 section pension?
It is only possible to access unreduced accrued 1995 section benefits from age 55 onwards if retiring from NHS pensionable service, whilst in a post which would have been MHO qualifying and after having attained at least 20 calendar years' of MHO service.
If benefits are accessed before age 60 without rejoining the NHS in a MHO qualifying post (and with a break of less than 5 years) they will be actuarially reduced.
However, when an MHO has 20 years’ or more MHO service and returns to what would have been considered a MHO qualifying post within 5 years of leaving, even for just one day, they can access their accrued 1995 section benefits in full from age 55 if the retirement application is submitted, via your employer, on the day(s) when pensionable work is undertaken.
If benefits are accessed at age 60 or later without rejoining the NHS or having rejoined but not in a MHO qualifying post they will be paid in full.
What happens if I leave the NHS and decide to transfer my benefits out of the scheme?
Where a MHO transfers service out to another pension scheme, the transfer value is increased using the Uniform Accrual method detailed above. Please note that from 6 April 2015 the ability to transfer benefits out of an unfunded public sector scheme has been restricted.
More information on transferring out.
What happens if I am made redundant?
If you are made redundant and defer taking your benefits, you will retain a normal pension age of 55 (provided that you have had more than 20 years' service as an MHO) and you will be able to access your accrued 1995 section benefits without reduction from this age onwards.
Can I return to work after accessing my accrued 1995 MHO benefits?
Subject to employer agreement, you may return to work after retiring and claiming your NHS pension. No further access to the 2015 scheme is allowed except where you have had a break in pensionable service of 5 years or more which has resulted in the loss of your final salary linking.
If you are unable to rejoin the scheme, it is possible to contribute to a personal pension or stakeholder pension. It should be noted that your employer is required to enrol you into a pension scheme and if you are not eligible to join the NHS pension scheme you will be admitted to an alternative arrangement.
Are there any rules around returning to work after accessing my accrued 1995 MHO benefits?
If you wish to return to work after retirement it is necessary to take a break in service of 24 hours and ensure that you do not exceed 16 hours NHS work per week in the first calendar month following re-employment. At the end of this month you can increase your hours. Alternatively you can take a break in service of one calendar month before returning to any level of work.
Please note that if you do not take the required break, or if you exceed the maximum service during the first month, then your pension will be suspended until the rules have been complied with.
If you return to NHS work before age 60 then your pension may be subject to abatement.
What is abatement?
Abatement is the process by which your accrued 1995 section pension is reduced pound-for-pound if your earnings on re-employment in the NHS, plus your NHS pension, exceeds your NHS pensionable earnings prior to retirement.
Abatement ceases to apply once you reach age 60.
As the abatement rules for those who access their accrued 1995 section MHO benefits remain the same as for the 1995 section please refer to our existing FAQ on this.
NHS Pensions guidance on abatement as it relates to MHOs.