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Retirement age

Q: My husband (a surgeon) and I (a salaried GP) are in the 1995 Section of the NHS Pension Scheme (NHSPS). We have been buying added years in the scheme for the past five years with an aim of having 40 years of NHS service by age 60. If the NHSPS retirement age were to be increased to age 65 or older, we would have 40 years' service without needing the added years. What would be the benefit of continuing to buy them in these circumstances? Could we stop paying them? What, if any, benefit would we gain from the contributions made so far, or could we claim them back?

A: The maximum potential NHSPS membership limits are 40 years to age 60 (age 55 for members with ‘special class’ status) and 45 years overall. These limits are inclusive of added years purchases.
It is therefore possible for members who have taken out an added years contract to achieve 40 years’ service by age 60, but who then decide to continue working to age 65 (or later), to accrue a further five years of membership to arrive at the overall maximum limit of 45 years.
Where regular added years payments cease before the stated contract age, for example, as the result of financial hardship or if the member leaves NHS pensionable service, at retirement, the member will simply receive the proportionate amount of added years benefit purchased to the date on which the agreement ended.
Even if the normal retirement age of the NHSPS is increased in future as a result of the recommendations outlined in Lord Hutton’s report on public sector pensions, one of the key recommendations is that existing benefits accrued to the point of any change should be protected.
With regard to the NHS Pension Choices Exercise, if you were to decide to move to the 2008 Section, added years are not available. Existing added years contracts would therefore cease on transfer, with the member receiving a credit in the 2008 Section for added years purchased before the transfer.

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