Pensions

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Direction status FAQs

What is direction status?

Direction status allows individuals who are not working in the NHS to remain members of the NHS pension scheme. Membership of the NHS pension scheme is usually restricted to individuals who work for an NHS Employing Authority. 

Organisations which are not NHS Employing Authorities can apply to the Secretary of State for Health to request that its employees, or some of its employees, have access to the NHS pension scheme.   This is referred to as a ‘Direction’.

 

How do I find out if my employer has direction status?

You can ask your Pension/Payroll Department or the relevant pensions agency.  Your contract of employment should confirm your pension position.

 

Are there different types of direction status?

Yes. Directions can be made under either Section 7(1) or Section 7(2) of the Superannuation (Miscellaneous Provisions) Act 1967 and directions can be ‘open’ or closed’. 

The arrangements which apply in Scotland are different to the arrangements in England& Wales and Northern Ireland.   The position in Scotland is covered later in this FAQ.

 

What is a Section 7(1) direction?

This facility is generally used to cover medical staff working in Government Departments.

 

If I am working for a Section 7(1) direction employer am I automatically admitted to the NHS pension scheme?

Yes, providing you satisfy the other conditions required to enable membership of the scheme.  Further information is available in our FAQ on Eligibility to join the NHS pension scheme.

In addition under Section 7(1), access to the NHS pension scheme is available even if you do not have any previous NHS pension scheme membership.

 

What is a Section 7(2) direction?

This facility can be used to cover all employees or just nominated employees of an institution.  If the institution is covered by a direction you will still need to complete an application form to remain in the NHS pension scheme.  This is usually done through your employer.

 

If I am working for a Section 7(2) direction employer am I automatically admitted to the NHS pension scheme?

No.  If you start working for a direction employer you will need to opt into the NHS pension scheme.

 

Are there any conditions I need to satisfy to qualify for membership via Section 7(2) direction?

Yes. You need to apply to remain in the NHS pension scheme within three months of the commencement of your employment and  you must have been contributed to the NHS pension scheme at some time within the 12 months leading up to the commencement of your direction employment.   
In addition, under Section 7(2) access to the NHS pension scheme is only possible if you satisfy the usual eligibility requirements. 

 

What is an ‘open’ direction?

An ‘open’ direction applies to an organisation which is able to offer the NHS pension to all eligible new recruits.  

 

What is a ‘closed’ direction?

A ‘closed’ direction applies to an organisation which is able to offer the NHS pension scheme only to individuals who are involved in a transfer from the NHS to a non-NHS organisation.   The NHS pension scheme will not be available to individuals who are recruited at a later date. 

The term ‘closed’ direction may also cover circumstances where access to the NHS pension scheme is available for certain individuals or for individuals performing certain duties, i.e. not all employees of the organisation.

 

What type of institutions can apply for Section 7(2) direction status?

The Secretary of State for Health will usually only consider applications where an employer fulfils certain criteria, i.e. that the employer provides NHS related services and is from the voluntary or not for profit sectors.  These generally include:

  • Social enterprises
  • Hospices
  • Care in the community services
  • University Medical Schools
  • Institutes involved in research

 

 

My employer has an ‘open’ direction status.  Am I entitled to join the NHS pension scheme?

Providing you meet the criteria you are entitled to join the NHS pension scheme.

 

My employer does not have direction status.  How do they apply?

If you are working in England and Wales your application should be made on document the 'initial application details' document  

In Scotland and Northern Ireland you should write directly to the Scottish Public Pensions Agency or the Health and Social Care respectively.

 

If my new employer does not hold direction status, can I apply for individual direction status?

Yes.  The pensions agencies will consider individual applications. Applications should be made directly to the relevant pensions agency.

 

If I am moving between UK nations and taking up non-NHS employment which pensions agency will deal with my application for direction status?

The application should be made directly to the relevant pensions agency in the nation that you will be working. 

For example, if you are currently contributing to the NHS pension scheme in England and Wales but take up employment in a medical school in Northern Ireland then your application for direction status would be made to the Health and Social Care.   You will then be able to transfer your accrued pension rights from the NHS pension scheme to the HSC pension scheme.

 

I am going overseas for a year. Can I apply for direction status to enable me to continue with my pension scheme membership during my overseas employment/research or volunteer work?

This might be possible but your application will be subject to the usual criteria for granting Section 7(2) direction status. 

If you take up an overseas assignment via the government-funded Health Partnership Scheme (which is managed by Tropical Health & Education Trust) you may be entitled to continued membership of the NHS pension scheme with the employee and employer pension contributions paid by the HPS (subject to eligibility requirements). Please see the Pensions Support Fund for Volunteers

Additionally some voluntary organisations already hold direction status.  If you are working for Voluntary Services Overseas (VSO) they will apply to the pension agency for continued access to the scheme  and they will pay both employee and employer contributions. 

If you are volunteering for the British Red Cross they will provide you with a form to complete to opt you into the NHS pension scheme and they will deduct the employee contributions from your salary. 

It is possible that you may be required to meet the cost of both the employee and the employer contributions during the period of your direction status.

 

If I retire from pensionable employment and return to work for a direction employer will abatement apply to me?

If you have retired on the grounds of ill health or ‘in the interests of the efficiency of the service’, or you are a doctor with Mental Health Officer status then your post retirement earnings from an employment with a direction employer would be treated as relevant post retirement NHS earnings, and your NHS pension may be abated.

Please refer to our FAQ on abatement for further information on who is affected by abatement. 

 

If I am contributing to the NHS pension scheme via a direction am I covered for the full range of pension scheme benefits?

No.  You will generally not be covered under for redundancy or the NHS Injury Benefit scheme.
Please refer to our FAQs on ‘redundancy’ and ‘injury benefits’ for further information on these schemes.

 

I am working in Scotland. Do the same rules apply?

No.  Although direction arrangements are available to doctors working in medical schools in Scotland the terms are different. A direction is available in Scotland if you are:

  • purchasing added years or the unreduced lump sum (1995 section) and you take up a position in a medical school within three months of leaving the NHS, or
  • taking up a position as a lecturer or in clinical research and your contract, which must begin within 12 months of leaving NHS employment, is for no more than 8 years.

Since 1 April 2016 the restriction that a contract can be for no more than 8 years has been removed and medical academics in Scotland can remain in the NHS pension scheme, via a direction, indefinitely. This brings the direction facility for medical academics in line with others in the UK.

 

My employer has direction status but did not make me aware of this when I started my employment.  Can I apply to join the NHS pension scheme retrospectively?

 

If you can provide evidence which demonstrates that you were not informed of your options when you began employment we may be able to assist you in making a claim.

 

I am a GP.  If I work for a direction employer can I join the NHS pension scheme?

Yes.  However your pension will accrue on an ‘officer’ basis using the final salary method.  It is not possible to accrue practitioner benefits while working for a direction employer.