NHS Pension Scheme Consultation on proposed change to members contributions Oct 2023

NHS Pension Scheme (Scotland): proposed changes to member contributions from 1 October 2023 and

miscellaneous amendments

Scottish Government consultation 2023

About This Consultation

The NHS Pension Scheme (Scotland) continues to be an integral part of the NHS

remuneration package and offers significant value in retirement to people who have chosen to

dedicate part, or all, of their careers to the NHS in Scotland. The NHS Pension Scheme

(Scotland) offers the security of a guaranteed income in every year of retirement for all its

members, on some of the most generous terms available from a pension scheme.

In 2008, tiered contribution rates were introduced to reflect that higher earners were likely to

receive proportionally more benefits than lower earners in a final salary pension

scheme. To ensure the cost of the NHS Pension Scheme was fairly distributed

and affordable for all members, these tiered contribution rates asked higher earners to

pay proportionally more than lower earners to access the valuable benefits of the scheme.

As part of the McCloud remedy, from 1 April 2022 all members moved to the NHS

Pension Scheme 2015 which is a Career Average Revalued Earnings (CARE) scheme where member pensions

are increased by a percentage of their salary for each year they work. This change ensures that the

costs and benefits of the scheme are more evenly shared.

On behalf of Scottish Ministers, SPPA ran an initial consultation between 24 January 2022 and 27

February 2022 which sought views on a number of proposals for reforming the member

contribution structure. While some of the proposals were welcomed by stakeholders, the

majority of respondents rejected proposals to flatten the tiered contribution structure. As a

result of concerns about the cost-of-living pressures on NHS staff, the implementation of all

proposals was postponed.

The Scottish Government response to the initial consultation confirmed the

intention to proceed with proposals to move to using actual rates of pensionable pay to determine

members’ contribution rates and to increase contribution thresholds annually in line

with a single annual pay award percentage. However, the consultation response

committed to consult further on proposals to rebalance the contribution structure and

also on whether or not the implementation should be phased. This consultation seeks

views on the phased implementation of a revised contribution structure proposal and the

rationale for those changes.

The consultation also seeks views on the attached draft amending instrument which introduces

changes to the scheme regulations in order implement contribution changes and other

previously consulted on proposals. The draft Scottish Statutory Instrument (SSI) makes

changes to the regulations to; allow members who take their benefits in the 1995 Section to return

to work and build further pension in the 2015 Scheme, to permanently remove ‘the 16-hour

rule’ and to make changes to the scheme rules regarding inflation, as confirmed

in the consultation response published on 28 March 2023.

The draft SSI also makes changes to retrospectively extend the suspension of retire and return

restrictions in the scheme, as set out in the consultation response published on 21

October 2022.

Finally, the consultation seeks views on a number of miscellaneous scheme

amendments which include changes to the final pay control regulations in the 1995 Section,

changes to the opt out rules for Practitioner members and small amendments to

the definition of a Practitioner and rules around pensionable pay.

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Duration of Consultation

This consultation will run for a period of twelve weeks commencing on Tuesday 23 May and ending

on Tuesday 15 August 2023.

How to respond

Please use the consultation response form which can be downloaded from the SPPA website and, once

completed, send to sppapolicy@gov.scot before midnight on the closing date.

Alternatively, responses can be posted to:

NHSPS(S): Member Contributions Consultation (No. 2) SPPA, Tweedside Park

Tweedbank Galashiels TD1 3TE