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Practice staff pensions

Q: I have heard that GP staff will shortly be given the opportunity to join the new NHS Pension Scheme. Does it make financial sense to do so?

A: There are now two NHS Pension Schemes (NHSPS). Members who joined the NHSPS before 1 April 2008 are in the 1995 Section and anyone joining for the first time after 31 March 2008 will be in the 2008 Section.

Eligible practice staff will be sent 'NHS Pension Choice' packs in the coming months, giving them the opportunity to join the 2008 Section. The packs will include personalised statements comparing the benefits of both schemes.

Although the 2008 Section has a better accrual rate (the rate by which benefits build up each year), the main factor that will determine whether a member will be better or worse off is the age at which they plan to retire.

Members in the 1995 Section can retire from age 60 without penalty, whereas members who retire from the 2008 Section before the age of 65 would receive reduced benefits.

Assuming normal circumstances apply, members who retire before the age of 63 are likely to be better off remaining in the 1995 Section, while those who retire after the age of 64 would benefit from moving to the 2008 Section.

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