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Staff pensions

Q: I have recently received NHS Pension Choice packs for my staff asking them to decide if they would like to move to the new NHS Pension Scheme and I would be grateful if you can tell me what are the main issues they would need to take into account when making their decision?

A: As with GPs, the main factor that will determine whether or not staff members should remain in what is called the '1995 section' of the scheme or transfer all of their accrued and future scheme membership to the '2008 section' is the age at which they plan to retire. Assuming normal circumstances apply, my firm's calculations show that scheme members under the age of 60 (on 1 October 2009) who plan to retire before age 63 may be better off remaining in the 1995 section, where those who plan to retire after age 64 would benefit from moving to the 2008 section. Other key factors that would need to be taken into account are that existing added years contracts cannot be continued under the 2008 section and 2008 section benefits cannot be taken before age 55.

Some practice nurses in the 1995 section may also benefit from 'special class' status which means that they can retire from age 55 without any reduction to their accrued benefits. Special class status is not offered in the 2008 section.

Depending on individual circumstances, there may be other issues to take into account and any members who are unsure which section is best for them personally should get advice from their financial adviser.

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