The NHS pension scheme as a mental health officer

Holding mental health officer status can have a big impact on your pension pot. Read the benefits, your options and when you can retire with MHO status.
Location: UK
Audience: All doctors
Updated: Tuesday 31 March 2020
Piggybank illustration

Mental health officer (MHO) status is a benefit that was awarded to 1995 section members working full or part-time in a hospital for patients suffering from mental disorders.

In order to qualify for and retain MHO status it is necessary to spend substantially the whole of your time in the direct treatment or care of patients suffering from mental disorders.

 

If you transferred from the 1995 to the 2008 section

MHO status was lost for members who transferred to the 2008 section through the choice exercise. Any doubled service accrued prior to transferring would no longer apply as only the actual accrued service was transferred.

 

Returning to NHS employment

If you left your MHO post you can regain MHO status at any time in the future providing that you have not left the NHS pension scheme. If you have left the scheme, with a deferred pension, you must return within five years in order to remain eligible for MHO status.

 

What are 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.

Maximum service

  • Your overall maximum service, as for any other member, is 45 years (inclusive of doubled service and added years).
  • However, at age 55 the maximum service allowed is restricted to 40 years of service.
  • At age 60 the maximum service allowed is restricted to 45 years of service.
  • Should you have achieved 45 years of service before age 60, you are required to continue to contribute to the scheme until age 60 (unless you retire or opt-out of scheme membership before then).
  • You must stop paying in at age 65 even if 45 years’ of service has not been reached.
  • Any service you achieve at ages 55, 60 and 65 in excess of the relevant pension scheme limits, described above, is excluded for pension purposes. 

Your doubling date

The day after you have completed 20 calendar years in a MHO post is known as your ‘doubling date’. Thereafter, every complete year of service you work in a MHO post will be doubled for pension purposes.

The effect of doubling differs depending on whether you work full-time or part time. For example, where two MHOs have worked for 21 calendar years in a MHO capacity, one full-time and the other part-time (5 PAs for example), the service on which their benefits will be calculated will be as follows:

  • 20 years’ full-time MHO plus 1 MHO doubled year = 22 years
  • 20 years’ part-time MHO (5 PAs) = 10 scaled years, plus
  • 1 year at 5/10 commitment doubled = 1 scaled year (365 x 5/10 = 183 (doubled = 365).

Total scaled service for the part-time MHO including doubling = 11 years.

​Only complete years of service are doubled. Please note that doubled years are only achieved on the anniversary of your doubling date.

Because of the impact of doubling, it is possible for MHOs to achieve maximum service limits earlier than other doctors.

 

Buying additional pension

Buying AP (additional pension) enables you to purchase up to an additional £5,000 of annual pension to be bought in units of £250.

You should note that it is not possible to coordinate the end date of the purchase to coincide with your normal pension age of 55. AP contracts can only terminate at age 60 or 65.

​If you retire before the chosen termination date, the AP benefits will be subject to actuarial reduction. This will be the case even where your main benefits are payable in full following retirement at age 55 or later.

 

Working in an MHO post outside of the NHS

If you carried out MHO type work outside of the NHS, this can be used to count towards the 20 year period required to trigger doubling of service, known as qualifying MHO service, but cannot be used in the calculation of your NHS pension.

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 to count towards doubling or not. BMA pensions can help you with these enquiries.

If you are credited with service of this type, the earliest your doubling can begin is age 50, once 20 calendar years’ of qualifying MHO service has been achieved.

 

Other MHO duties that can count towards your status

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 trigger doubling:

  • 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.

​If MHO service is not showing on your record it may be that you are not eligible for MHO status. It may just be an error and we can help you to rectify this - contact us.

 

Death in service benefits

You will be covered for death in service benefits if:

  • you are under age 60 and have yet to retire, even if you have achieved scheme maximum service
  • you are over age 60 and have withdrawn from contributing to the scheme but have yet to retire
  • if you have opted out of the scheme you will not be covered for death in service benefits.

 

When can I access my NHS pension after retiring?

It is only possible to access unreduced benefits from age 55 onwards if retiring from NHS pensionable service, whilst in a MHO qualifying post and after having attained at least 20 calendar years’ of MHO service.

A member with over 20 years’ MHO service who leaves the scheme before age 55, and does not return, can claim their preserved benefits in full at age 60. The benefits will be based on a comparison between a normal non-MHO pension calculation and one which takes account of potential service they could have had had they remained a MHO until age 55. This is known as uniform accrual.

A member with over 20 years’ MHO service who leaves the scheme after age 55, and does not return, can claim their preserved benefits in full at age 60. The benefits will take account of any doubling that had been achieved by the time of leaving the scheme.

If benefits are accessed before age 60 without rejoining the NHS in a MHO qualifying post they will be actuarially reduced.

However, when an MHO has 20 years’ or more MHO service and returns to a MHO qualifying post within five years of leaving, even for just one day, they can access their benefits in full from age 55 if the retirement application is submitted on the day(s) when pensionable work is undertaken.

 

If you leave the NHS

Where a MHO transfers service out to another pension scheme, the transfer value is increased, using the uniform accrual method, to reflect the fact that doubled years could have been achieved through continued service in the NHS pension scheme.

Care should be taken when transferring to other public sector pension schemes as schemes are often described as ‘similar’ or with reciprocal arrangements but MHO benefits can be lost if transferred out and then back into the NHS pension scheme.

 

How your pension is calculated if you have over 45 years service

If you work beyond the maximum of 45 years pensionable service, the pension is calculated using whichever of the following two options produces the better result:

  • pensionable salary up to the date 45 years service is achieved (or age 60 if later), combined with service up to that point including doubled years. The resulting pension and lump sum are then increased in line with inflation up to the last day of service, when they are put into payment
  • pensionable salary up to the last day of service, combined with service up to that date excluding doubled years.

​The NHS pensions agencies will automatically pay the most beneficial package.

 

A change to your circumstances

  • If you retire under tier 2 ill health retirement the enhancement you are awarded will not be doubled.
  • ​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 benefits in full from this age onwards.