NHS Pension Scheme

Simon Burns Excerpts

Wednesday 7th March 2012 Written Statements

[The Minister of State, Department of Health (Mr Simon Burns)]

The National Health Service Pension Scheme and Injury Benefits (Amendment) Regulations 2012, laid on 5 March 2012, bring into force increases to contribution rates for members of the NHS Pension Scheme for England and Wales. The increases apply to service from 1 April 2012 and continue throughout the financial year.

At the spending review 2010, the Government announced increases to member contribution rates in public service pension schemes saving £2.8 billion a year by 2014-15, to be phased in from 1 April 2012. The contributions are to be increased progressively with protection for the lower paid and to minimise instances where members choose to opt out of the scheme.

Last year the Department consulted on a structure of tiered contribution rates that meet these requirements. The consultation opened on 28 July 2011 and closed on 21 October 2011, and nearly 9,000 responses were received. The Department revised the original consultation proposal so that a greater number of lower and middle earners are protected from an increase in 2012-13.

The Government remain committed to securing in full the spending review savings in 2013-14 and 2014-15 by further increasing member contributions in public service pension schemes in addition to the 2012-13 rises. The Department will consult formally on proposals in due course.

These regulations also introduce new administration requirements to support implementation of taxation provisions within the Finance Act 2011. Further, the regulations alter scheme transfer rules in order to exclude the Isle of Man Unified Public Service Pension Scheme from 1 April 2012, as this new scheme will be incompatible with the terms of the Public Sector Transfer Club.