NHS Pensions Choice Exercise

The pensions Choice exercise will be rolled out in 2009 and will last for three years. It gives members who are signed up to the age 60 arrangement of the NHS Pension Scheme a one-off opportunity to move to the age 65 arrangement under the New NHS Pension Scheme.

Employers will have an important role to play in delivering the Choice exercise. Comprehensive advice on what employers need to do is being developed. As well as the operational requirements of delivering Choice at a local level, employers also need to recognise the strategic importance of the exercise in light of emerging demographic trends, including the increasing age of the general and working populations and tightening labour markets.

What do employers need to do?

• Set the Choice exercise in the context of local age strategies. If employers want to encourage staff to work longer to meet future service delivery requirements, the flexibilities of age 65 arrangement (under the New NHS Pension Scheme) can form part of a wider package of support.
• Improve the management and quality of pension data for staff who are members of the NHS Pension Scheme, making the appropriate links with the Electronic Staff Record (ESR) and workforce planning requirements. The better the quality of your member's pension data the easier it will be for employers to manage their responsibilities as part of the Choice exercise.
• Support NHS Pensions communication activities, including the distribution of 'Choice packs' to staff and dealing with queries from staff. Each member will receive a benefit comparison statement to help them make an informed decision about their future NHS pension provision. The statement will outline the key differences between the age 60 and age 65 arrangements of the NHS Pension Scheme.

Briefing and consultation sessions

NHS Employers is undertaking work to help employers understand what they need to do to ensure that they are prepared for the Choice exercise. To date, representatives from 200 organisations have provided feedback on the Choice exercise at consultation sessions, hosted by NHS Pensions and NHS Employers. This feedback is being used to inform the implementation strategy. There will be further opportunities to attend briefing and consultation sessions before the Choice exercise begins next year. To express interest in attending, contact NHS Employers.

Background

The age 65 arrangement was introduced in April 2008 under the New NHS Pension Scheme; it is a final salary scheme with a normal pension age of 65. The arrangement enables increased flexibility, particularly in the run-up to retirement when staff can opt to step down to a less demanding role, and take part of their pension.

Delivery of the Choice exercise is being led by NHS Pensions with support from the NHS Pension Scheme Governance Group, a partnership between NHS Trade Unions and employers, with input from health department representatives. The NHS Pension Scheme Governance Group falls under the auspices of the NHS Staff Council and is managed by NHS Employers.

More information

Information is available from the NHS Pensions website.

NHS Employers has produced a pensions briefing for organisations on the changes that were introduced to the NHS Pension Scheme in April 2008.