Scottish Public Pensions Agency (SPPA) monthly payments calculations: FOI release

Information requested

"Exactly how you would calculate (including any formulas involved) the amount for monthly payments for early ill health retirement pensions for somebody on an NHS pension that is mixed between the various NHS pension schemes.”

Response

Lower-tier Ill Health Pension
If a member is assessed as being unable to carry out the duties of their own job they will be entitled to the early payment of the retirement benefits they have earned to date in all NHS Pension Schemes (with no reduction for early retirement). This is known as a lower-tier ill health pension.

Upper-tier Ill Health Pension
If a member is assessed as being permanently incapable of carrying out the duties of both their own job and also any other regular employment of like duration to their NHS job, they will be entitled to early payment of the retirement benefits they have earned to date in all NHS Pension Schemes plus an enhancement, known as an upper-tier pension. An upper-tier pension is made up of a lower-tier pension plus an upper-tier pension enhancement. The calculation of the enhancement is based on rules of the pension scheme the member is active in at the point they apply for ill health retirement and it is only their active pension which is enhanced. For example, a member who is currently a member of the 2015 Scheme and has preserved benefits in the 1995 Section, will receive an enhancement to their 2015 Scheme benefits and their 1995 Section benefits accrued to date will be payable without enhancement. The upper-tier ill health enhancement is calculated as follows:

1995 Section and 2008 Section
• Equal to two-thirds of the member’s prospective pensionable service to Normal Pension Age.

2015 Scheme Tier 2 pension
• A pro rata enhancement based on 1/2 of the member’s prospective pension to Normal Pension Age.

The regulations below provide for the calculations of ill-health retirement pensions in each of the NHS Pension Schemes including the formula for upper-tier enhancement.

1995 Section

The National Health Service Superannuation Scheme (Scotland) Regulations 2011

E3 Early retirement pension on ill health grounds (post 1st April 2008)
(4) Subject to paragraphs (5) and (6), if the member meets the upper tier condition in addition to meeting the lower tier condition, the pensionable service on which the pension is based will be increased by two-thirds of the pensionable service the member could have completed had the member stayed in pensionable employment until normal benefit age.

2008 Section

The National Health Service Superannuation Scheme (2008 Section) (Scotland) Regulations 2013

2.D.8 Early retirement on ill health: active members and non-contributing members
(5) The annual amount of an upper tier ill health pension (disregarding any additional pension) is to be calculated as specified in regulation 2.D.1(4), but on the assumption that the member's pensionable service—
(a) is increased by the enhancement period where the member has returned to pensionable employment 12 months or more after having a break in such service and it would be more favourable to the member to treat the member's pensionable service before and after the break, and all such other breaks (if any), as continuous; and
(b) is not increased by the enhancement period in the circumstances referred to in sub-paragraph (a)
if—
(i) the member's pensionable service before and after the break is treated separately under regulation 2.G.2 (general rule: separate treatment of service etc.); or
(ii) the member's pensionable service in respect of an earlier service credit is treated separately under regulation 2.K.7.

(6) Subject to paragraph (7), in this regulation “the enhancement period” means two-thirds of the member's assumed pensionable service.

2015 Scheme - For publication, please refer to attachment. 

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FoI - 202100144029 - Information Released - 2015 Scheme

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