NHS changes in small steps…

NHS McCloud Regs: a series of small steps…

This is the start of a series of articles explaining the new NHS remedy regs.

We’ll only be sending this series of explanatory steps via our newsletter: signup for this regular series via our newsletter here:

https://expertpensionsconsulting.co.uk/public-service-pension-schemes-understanding-the-mccloud-judgement-and-reclaiming-overpaid-tax/

It’s a series of small steps, going through each of the new regs (for remedy) and highlighting the financial planning opportunities at each step - which is a win-win for members of the NHS, because for each opportunity there is an informed decision that the member must take - and we can help them understand the best options for their best interests.

The 2022 act and the Public Service Pensions (Exercise of Powers, Compensation and Information) Directions 2022 require government departments (which essentially covers all the public sector schemes we are familiar with - Civil Service, Police, Local Government and Fire Brigade, to name the main ones) to make amendments to public service pension scheme regulations to remedy - known as ‘McCloud remedy’ [see more here]

The ‘McCloud remedy’ has 2 parts:

The first:

• closed the legacy public service pension schemes on 31 March 2022
• ensured equal treatment for all public service pension scheme members by moving all active members into the reformed public service pension schemes on 1 April 2022

Following a consultation, this first part of the remedy was implemented for the NHS Pension Scheme through the National Health Service Pension Schemes (Amendment) Regulations 2022, which came into force on 1 April 2022.?

On that date all active members of the 1995 to 2008 NHS Pension Scheme (the ‘legacy scheme’) were moved to the 2015 NHS Pension Scheme (the ‘2015 scheme’).

Now that’s important and it’s done: ALL public sector workers are in the ‘’2015’’ scheme or CARE scheme from 1 April 2022: all public sector pension members no longer have active accrual in legacy public sector schemes.

That’s worth remembering: ALL public sector legacy schemes are closed.

The second part of the remedy will require decisions to be made by members.

In simple terms, for NHS Pension Scheme members (who were impacted) they have a clear choice:

• returns members who moved to the 2015 scheme back into the legacy scheme for their pensionable service (‘remediable service’) from 1 April 2015 to 31 March 2022;

• offers a choice of whether to receive either (1) legacy scheme benefits or (2) 2015 scheme benefits for their service from 1 April 2015 to 31 March 2022.

The deadline set by the 2022 act for the McCloud remedy to come into effect is 1 October 2023.

That’s it in simple terms.

But, herein lies the challenge for members: the NHS are not going to provide advice for members on the best decision for them.

We can.

This will impact the 1.1 million NHS Pension Scheme members with remediable service.?

The Department of Health and Social Care is now consulting on a draft Statutory Instrument (SI) which will make changes to NHS Pension Schemes Regulations to facilitate the retrospective part 2 of the McCloud remedy.?

This SI will impact the 1.1 million NHS Pension Scheme members with remediable service [see more here]

The draft National Health Service Pension Schemes (Remediable Service) Regulations 2023 should allow eligible NHS Pension Scheme members to make that retrospective choice and put them, as far as possible, in the pension position they would have been in had the discrimination not occurred.

We'll help you understand how the regs will be applied for NHS members. We'll go through each step, with case study examples.

Sign up for our newsletter. It will be issued weekly, starting next Tuesday morning on 22 August and by the time the member statements start hitting their doorstep, you'll know how to deal with them.

Our next article will start explaining the draft regs, one step at a time - and we’ll start looking at segmenting members and choices, so that you can identify those public sector members with the most significant choices to be made - and how you can help them.