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Insert NHS Logo
Insert Address
Date
Insert name of Employing Authority - A change in the law that affects everyone working in the NHS
Dear Colleague
To help people save more for their retirement, the government now requires employers to enrol their workers into a workplace pension scheme. This applies to those who aren’t already in a qualifying scheme and who are:
· earning over £8,105 a year (£676.01 a month) (changes from 6 April 2013)
· aged 22 or over; and
· under State Pension age.
We therefore are enrolling anyone not already in a pension scheme (and who meets the age and earnings criteria above) into our pension scheme on Insert staging date. If you are eligible you will be enrolled in to the NHS Pension Scheme.
There are a small number of staff who are not entitled to join the NHS pension scheme for example:-
· If you are already in receipt of a NHS pension
· If you work full time at another Trust
· If you are absent from work due to long-term sickness, maternity leave, etc. when the statutory duty to automatically enrol you applies.
These staff will be enrolled into an alternative scheme called “NEST”
· NEST is only for staff not eligible to join the NHS pension scheme.
· The initial employee contribution is 1% of qualifying earnings, with an employer contribution of 1%. This will increase to a maximum of 5% employee and 3% employer by 2018.
You can choose to opt out of a scheme if you want to, but if you stay in you will have your own pension which you get when you retire.
· Insert name of Employing Authority and you will both pay into it every month
· The government will also contribute through tax relief.
· Your pension belongs to you, even if you leave us in the future
Why is this happening?
The government’s aim is for more people to have another income, on top of the State Pension, when they come to retire. The full basic State Pension in 2012-13 is £107.45 a week for a single person. This is intended to be a foundation - you may want more.
Employers are enrolling their workers automatically into a scheme to make it easier for people to start saving.
What does this mean for you?
NHS Pension Scheme
The payments into the NHS Pension Scheme are:
Proposed 2013/2014 Contribution Rates before tax relief (gross)
Annual pensionable pay(full time equivalent) / Contribution rate (before tax relief) 2012/13 (gross) / Contribution rate (before tax relief) 2013/14 (gross)
Up to £15,278.99 / 5.0% / 5.0%
£15,279.00 to £21,175.99 / 5.0% / 5.3%
£21,176.00 to £26,557.99 / 6.5% / 6.8%
£26,558.00 to £48,982.99 / 8.0% / 9.0%
£48,983.00 to £69,931.99 / 8.9% / 11.3%
£69,932.00 to £110,273.99 / 9.9% / 12.3%
£110,274.00 and over / 10.9% / 13.3%
· Your contribution shown above is taken directly from pay.
· Employer contribution of 14% is paid at the same time.
· Tax relief is given at source.
Example:
Remember, depending on your earnings per year, the actual contributions for you will be higher or lower.
Please note:
· Your payslip will show your pension contribution.
· The percentage of tax relief might not be exactly as shown here, as other factors might affect it. For example, if your earnings are close to one of the tax band levels.
· If you have an enhanced/fixed protection in place and meet the age and earnings requirements for automatic enrolment, you must by law be automatically enrolled. If you wish to opt out after you have been automatically enrolled then you should follow the process and timescales outlined in appendix A
If you wish to work out your contribution in £ rather than % you can use the workplace pensions calculator https://www.moneyadviceservice.org.uk/en/tools/workplace-pension-contribution-calculator
NEST Pensions Scheme
NEST Example: Based on a full time salary of £15,279 on 1st April 2013 (1% employee contribution and 1% employer contribution) and basic rate (20%) tax relief. Contributions are based on the part of your salary that falls within the limits for automatic enrolment, not your full salary.
(NEST = 1% Nest = 1% = Total NEST 2%)
We will increase the contributions to [NEST] to meet the minimum levels set by government.
Date
/Employee Contribution
/Employer Contribution
/Total Contribution
/1st March 2013 / 1% / 1% / 2%
1st October 2017 / 3% / 2% / 5%
1st October 2018 / 5% / 3% / 8%
You will be sent a welcome pack providing personalised details regarding your contributions, the employer contributions and tax relief. This pack will also provide full details regarding the opt out process and timescales.
How much will you get from this pension when you retire?
This information was/will be given to you when you join either scheme. Booklets and fact sheets are available on line at www.nhsbsa.nhs.uk/pensions.
If you are enrolled into NEST, this information will be sent to you.
What you need to do in (Staging Month).
If you want to opt out of either pension scheme you will be given instructions in the pension letter sent to you confirming which scheme you have been auto enrolled into. More details on how to opt out can be seen at Appendix A for the NHS Pension Scheme or Appendix B for NEST.
If you want to stay in the pension scheme you don’t have to do anything. Your personal details will be passed to the pension provider and your pension will start building from insert date, when the first payments will be made. You will be able to see this on your payslip.
You do not have a choice of pension scheme; you may only join NEST if you are not eligible for the NHS pension scheme.
If you have any queries please contact:-
Insert local contact details as required
Yours sincerely
Insert Name etc
Appendix A
How to opt out of the NHS Pension Scheme
If your completed opt-out form is received between [insert automatic enrolment date] and [insert end date for opt out window] you will be removed from NHS Pensions Scheme. Any payments you have already made will be refunded, and you will not have become an active member of the scheme on this occasion.
If you have fixed or enhanced protection in place, due to the lifetime allowance, please ensure that you are aware of the tax implications of opting back into the pension scheme. More information can be found on the website at:
http://www.nhsbsa.nhs.uk/3126.aspx
If you want to stop making payments after [insert end date of opt out window] you can do so. The payments you have already made may not be refunded, but will be paid out on retirement. More information about leaving the Scheme and refund of contributions can be found on the website at: http://www.nhsbsa.nhs.uk/Pensions
If I opt out or stop making payments, can I re-join the NHS Pension Scheme at a later date?
If you opt out or stop making payments you may be able to re-join the NHS Pension Scheme. If you wish to do this write to your payroll department asking them to re-enrol you into the Scheme.
A regular reminder
If you opt out or stop making payments you will be automatically enrolled back into a pension scheme at a later date (usually every three years). This is because your circumstances may have changed and it may be the right time for you to start saving.
Appendix B
How to opt out of NEST
To opt out, please see instructions in your opt in pack that will be sent to you direct from NEST when you have been enrolled.
If you decide you don’t want to be a member of NEST you can opt out during the opt-out period. This is normally a one-month period that starts after your employer enrols you. You can find this date in the letter that comes with the pack. If your completed opt-out form is received within the opt-out period, you will be removed from the scheme. Any payments you have already made will be refunded, and you will not have become an active member of the scheme on this occasion.
After the opt-out period has passed, you can still choose to stop making contributions but you won’t get a refund of any contributions you’ve already made. Your contributions will stay in your NEST retirement pot until you reach the age where you can take your money out.
If I opt out or stop making payments, can I re-join NEST at a later date?
Yes, you can re-join NEST. To do so, contact your Payroll department.
A regular reminder
Anyone who opts out or stops making payments will be automatically enrolled back into a pension scheme at a later date (usually every three years). This is because your circumstances may have changed and it may be the right time for you to start saving. We will contact you when this happens, and you can opt out if it’s still not right for you.
Appendix C
Questions you may have
Will the amounts paid into my pension change?
Yes, the amounts will automatically increase or decrease accordingly if your earnings go up or down.
For NEST only, we are going to increase the amounts being paid into your pension over the next few years. This is to meet the government’s minimum standards, all information will be given on opt in.
What if I want to pay more into my pension pot?
NHS Pension Scheme - You can increase the amount you put in if you want, information on increasing your benefits can be found on the website at: http://www.nhsbsa.nhs.uk/Pensions/2659.aspx
NEST – Information about saving in nest can be found at: http://www.nestpensions.org.uk/schemeweb/NestWeb/public/NESTforSavers/contents/nest-for-savers.html
What is tax relief?
The government takes tax off your income. You can see this on your payslip. Tax relief means some of your money that would have gone to the government as tax now goes into your pension through a ‘relief at source’ arrangement.
Fixed Protection
If you have an enhanced or fixed protection in place, due to the lifetime allowance, please ensure that you are aware of the tax implications of opting back into the pension scheme.
For information on pensions and saving for later life visit:
https://www.gov.uk/workplace-pensions
or www.nhsbsa.nhs.uk/pensions.
A commitment from us
If you are under 75, work or usually work in the UK, and earn over £5,564 a year (the amount set by the government for this):
- we must by law continue to maintain your membership of a scheme that meets certain government standards; and
- if your membership of such a scheme ends (and it is not because of something you do or fail to do), we must by law put you into another scheme that meets government standards straightaway.