There are 2 different NHS Pension Schemes:
- 1995 and 2008 Scheme
- 2015 Career Average Revalued Earnings (CARE) Scheme.
The 1995 and 2008 Scheme is split into two sections. Both are statutory final salary schemes. They use your pensionable earnings at, or close to retirement, to calculate your pension.
The 1995 section uses your pensionable earnings from the best of the 3 years leading up to your retirement.
The 2008 section uses your pensionable earnings average from the best 3 years within the 10 years leading up to your retirement.
2015 CARE Scheme
A CARE Scheme is a defined benefit pension scheme. The 2015 CARE Scheme is a public service pension scheme under the Public Service Pensions Act 2013.
The 2015 CARE Scheme uses your pensionable earnings throughout your career to calculate your pension.
Every year the amount you earn is calculated based on your actual pensionable pay in that Scheme year. The amount is increased through revaluation every year until you retire or leave the Scheme.
The current build up rate is 1/54th. This is decided by His Majesty’s (HM) Treasury, plus 1.5% each year. The pension earned in a Scheme year is revalued on 1 April of the following year.
Your final pension amount is the total of all these revalued pots from each year of your membership.
When you take your pension benefits, you’re guaranteed to be paid a specific amount. This is not dependent on investment returns.
If you leave the Scheme before being entitled to claim your retirement benefits, annual revaluation stops. This is replaced at retirement by Pension increase. Pension increase is used to maintain the value of your pension against rises in the cost of living.