McCloud Remedy Pensions

[Rollin]

I have an NHS pension which was mainly the 1995 Section.
I was then transferred into the 2015 Section.

It now appears, because of the McCloud judgement, that I will have a choice of whether to revert the 2015 Section back to the 1995 Section or not.

I assume this means that I will be able to start my whole pension at 60 if I convert the 6- 7 years of pension from the 2015 section back to the 1995?

Are there any calculators that are able to show what pension benefits I would get if I changed back to the 1995 Section?

Complicated.

Edited by Rollin on Tuesday 19th October 20:03

Edited by Rollin on Tuesday 19th October 20:03

[PF62]

If the results of the consultation are followed then the decision will only be taken when you retire and they will provide calculations showing which scheme would provide the better result.

It isn’t as straightforward as changing everyone back as some are better off under the 2015 scheme - even if they decided to retire at 60 and take the actuarial reduction.

[Rollin]

Thanks.
It would be nice though if it was possible to compare retiring at 60 and 67, before you actually retire

[ben_h100]

I’m also affected by this. Although I’m only 35, I’m able to take some pension benefits at any point after 40 so I have an active interest in how it plays out.

The latest is that the comparison calculators will be released in the next few months.

[Rollin]

ben_h100 said:

I’m also affected by this. Although I’m only 35, I’m able to take some pension benefits at any point after 40 so I have an active interest in how it plays out.

The latest is that the comparison calculators will be released in the next few months.

Thanks for the info.

[PF62]

Rollin said:

Thanks.
It would be nice though if it was possible to compare retiring at 60 and 67, before you actually retire

The difficulty why you cannot do this in most cases is you are comparing a final salary scheme with a career average scheme.

So although you can do the maths to compare the two schemes (and having done it myself that isn’t particularly hard as all the details and actuarial rates are published), what you cannot do is predict what will happen to your career and pay between now and retirement.

If that is a reasonably short period of say five years then any estimate might not be far off, but ten or twenty years - well you would just be guessing.

And that was why the consultation recommendation was that the decision be taken at retirement not when the new ‘2022’ replacement for the 2015 scheme is brought in - lots of people would have made the wrong decision leading to a potential ’McCloud 2’.

[foiled]

Unravelling all those pension annual allowance charges between 2015 and 2022, twenty years hence, will be fun!

[PF62]

foiled said:

Unravelling all those pension annual allowance charges between 2015 and 2022, twenty years hence, will be fun!

The consultation document for the Civil Service scheme, and I assume the others are similar ( www.civilservicepensionscheme.org.uk/members/2015-... ) indicates that although any tax due will be paid when someone retires in twenty years, the calculation will be done in 2022.

The calculation will notionally put the person back into the old scheme until they actually make the decision.

Although with the four year limit on assessing tax they will only be able to go back to 2017 so cannot tax the two earlier years (but if there is a refund in those two years it will be paid as compensation).

[Rollin]

Setting aside the effect on the amount of pension, will it now be possible to take the 2015 section benefits (up to 2022) at 60 like the 1995 section?

[PF62]

Rollin said:

Setting aside the effect on the amount of pension, will it now be possible to take the 2015 section benefits (up to 2022) at 60 like the 1995 section?

Yes, but you could always take the 2015 benefits at 60 anyway, although with an actuarial reduction.

The vast majority of people just saw the actuarial reduction and thought - “that’s bad” but never did the maths on the higher accrual rate to see whether the 2015 scheme was actually worse - for some (not all) it wasn’t and actually provided a larger benefit than the preceding scheme.

And this is why the government couldn’t simply roll everyone back from the 2015 scheme to their previous scheme, because some would lose out if they did.

[p1doc]

will be interesting to see if nhs pension schemes will do usual estimates with disclaimer advising members to get financial advice separately at their own cost, i am due to turn 55 in 2028 and planning to go then so will likely convert my 2015-2022 to 95 scheme to enhance this
all relying on government talks to keep 55 as age you can retire on for those in 95 scheme....