Consultation outcome

Government response to NHS Pension Scheme: proposed amendments for April 2025

Updated 10 March 2025

Introduction

The NHS Pension Scheme is designed to offer significant value in retirement to people who have chosen to dedicate part or all of their careers to serving the public through the NHS. Backed by the Exchequer, the NHS Pension Scheme offers the security of a guaranteed income in every year of retirement for its contributing members, on some of the most generous terms available from a pension scheme.

The Department of Health and Social Care (‘the department’) keeps the rules of the pension scheme under review to ensure it continues to help the NHS attract and retain the staff needed to provide high-quality care for patients.

There are 2 NHS Pension Schemes:

• the current 2015 Scheme
• the previous scheme, which is divided into the 1995 and 2008 Sections (‘the legacy scheme’)

Due to this, there are 3 different sets of regulations under which entitlement to pension and other benefits are calculated:

• The National Health Service Pension Scheme Regulations 1995 (SI 1995/300) (‘the 1995 Regulations’)
• The National Health Service Pension Scheme Regulations 2008 (SI 2008/653) (‘the 2008 Regulations’)
• The National Health Service Pension Scheme Regulations 2015 (SI 2015/94) (‘the 2015 Regulations’)

This consultation proposed the following changes to the scheme rules to:

• retrospectively amend the definition of overtime in the 2015 Scheme so that it aligns with the long-standing policy and practice for additional hours worked by part-time staff to be pensionable up to whole-time equivalent (WTE) hours
• clarify the method for calculating member contributions where pay reduces during a period of absence
• provide for general practitioners (GPs) and non-GP providers to update their annual certificate of pensionable profits for 2024 to 2025 to the amount declared to HM Revenue and Customs (HMRC) on their revised tax return. This is required as a result of HMRC’s reforms to standardise the accounting period for businesses
• allow members who are affected by the McCloud remedy to revoke a deferred choice election or for a deferred choice election to lapse in certain circumstances
• make other technical and miscellaneous amendments, including new references to neonatal care leave that the Department for Business and Trade will bring into law from 6 April 2025

This document sets out the department’s response to comments received through public consultation.

Consultation process

The proposals and draft regulations were subject to public consultation which began on 10 December 2024 and ended on 4 February 2025. A consultation document describing the proposals and draft regulations was published on GOV.UK, with responses invited through the consultation platform.

The larger NHS trade unions, a number of NHS employers and other interested parties were formally notified of the consultation.

In accordance with section 22 of the Public Service Pensions Act 2013, the department has followed the procedure for making changes to the protected elements of the NHS Pension Scheme, and has published a report detailing these changes. This includes consulting with persons (or representatives of the persons) that the department believes are likely to be affected by the changes. The department worked with the Scheme Advisory Board to seek feedback on a number of the proposals before launching the consultation, including the changes to additional hours and reduced pay. The Scheme Advisory Board is a statutory board comprising trade union and employer representatives that advises the Secretary of State for Health and Social Care on the merits of making changes to the NHS Pension Scheme.

Additionally, the department has considered the desirability of not making changes to member contribution rates, as is relevant to the changes outlined in the ‘Method for calculating member contributions if they are on reduced pay’ section of this document. The department considers that these changes will be beneficial or neutral to members because members will pay lower or the same contributions during periods of absence as a result. If the changes set out in this document are not made, then some members may pay higher contribution rates than they should during a period of absence. 

The department welcomed any comments or views on the proposals and draft regulations.

A total of 22 responses were received. The responses came from individuals, trade unions, employers and other organisations, including the:

• British Medical Association
• Leeds Teaching Hospitals NHS Trust
• NHS Business Services Authority (NHS Pensions)
• NHS Pension Board
• Royal College of Nursing
• Scheme Advisory Board
• University Hospitals of Leicester NHS Trust

The above organisations represent a wide number of interested parties. Trade unions often provide feedback on public consultations on behalf of their membership. The Scheme Advisory Board has representatives from both employers and trade unions and therefore has considerable scope to represent the views of the membership of the NHS Pension Scheme.

The NHS Pension Board’s response did not state whether they agreed or disagreed with the various questions, so they have not been included in the figures below. However, their comments have still been considered. The NHS Staff Council advised that they had seen the Scheme Advisory Board’s response and that they would not be submitting a separate response, due to the technical nature of the consultation.

Pensionability of additional hours for members who work part time

The consultation set out a proposed amendment to the definition of ‘overtime’ in scheme regulations. This proposal would mean that part-time members who worked additional hours between 1 April 2015 and 31 March 2024 have those additional hours treated as pensionable up to their WTE under scheme legislation. This proposal would mean that the regulations are consistent with published guidance and existing administrative practice. Any members who did not have those additional hours treated as pensionable would have the option to now do so.

Summary of consultation proposals

As outlined in the consultation, long-standing practice and policy intention has been to treat any additional hours worked by part-time staff as pensionable up to a ceiling of what would be their WTE contracted hours. Any hours worked above WTE are considered overtime and therefore not pensionable. This is the position set out in the scheme literature.

The consultation sought views on a proposal to retrospectively align the 2015 Scheme regulations with this long-standing practice and policy intention. This was proposed so that additional hours worked by part-time staff up to WTE during the period 1 April 2015 to 31 March 2024 are pensionable. Changes to scheme regulations made on 1 April 2024 confirmed that those hours would be pensionable in the future, correcting the issue prospectively. Members who already had their additional hours treated as pensionable would see no change to their pension record. This was because their additional hours had been treated in a way which was consistent with scheme literature, the policy intention and the legacy scheme. Any member whose employer did not treat those additional hours as pensionable would be given the opportunity to have them now treated as such. There would then be contribution arrears to pay in respect of those hours.

Consultation feedback

Respondents were asked 2 questions as part of the consultation. First, they were asked whether they agreed or disagreed with the proposal to retrospectively amend regulations to align with long-standing practice, so that additional hours worked between 1 April 2015 and 31 March 2024 by part-time staff are pensionable up to WTE.

Of the 21 responses received to this question:

• 17 (81%) agreed
• 1 (5%) disagreed
• 3 (14%) didn’t know

The Scheme Advisory Board, British Medical Association and Royal College of Nursing were all supportive of the proposal, stating that they felt it is appropriate to bring the 2015 Regulations in line with long-standing practice. Given that the amendment has already been made prospectively from 1 April 2024, they felt that it is fair for the amendment to also be applied retrospectively to ensure consistent treatment and intergenerational fairness between members.

The British Medical Association added that they do not anticipate significant, if any, numbers of part-time staff to have had their pay treated in line with the erroneous regulatory language, as the 2015 Scheme guidance to employers had been in line with this correction already.

Other organisations and responses from individuals supported the proposal. Where respondents disagreed with the proposal or did not know, they did not give reasons for their responses.

The second question respondents were asked was whether they agreed or disagreed that affected members who did not pension their additional hours during the period 1 April 2015 to 31 March 2024 should now be given the option to do so.

Of the 21 responses received to this question:

• 17 (81%) agreed
• 1 (5%) disagreed
• 3 (14%) didn’t know

The responses generally supported the proposal. The Scheme Advisory Board stated that they considered it to be fair and appropriate in principle and expressed that care will be needed to ensure that members have sufficient time and flexibility to pay arrears so there are no unnecessary barriers which could influence member decisions. They also felt that setting a specific time frame for payment could serve as a useful guideline for employers.

The British Medical Association also supported this proposal. They said that because the 2015 guidance to employers had been in line with this correction already, they did not anticipate significant, if any, numbers of part-time staff to have had their pay treated in line with the current drafting of the 2015 Regulations. However, as it is technically possible for this to have happened, they agreed that it is sensible to allow such members to remedy their position retrospectively. 

The Royal College of Nursing were in favour of this proposal, stating that providing this option allows members to make decisions that suit their financial circumstances, providing members with greater security should they elect.

The University Hospital of Leicester supported the proposal, and felt it was fair and equitable because in some cases members would have assumed that additional hours were pensionable and may have taken on extra work for that reason.

Leeds Teaching Hospital, the NHS Business Services Authority and a number of responses from individuals also expressed support for the proposal, commenting on how it promotes consistency, fairness and equity.

Where respondents disagreed with the proposal or did not know, they did not give reasons for their response.

Government response

The department is grateful for the responses received on these proposals.

The department agrees with the points raised by the Scheme Advisory Board in relation to providing members with flexibility to pay arrears. The NHS Business Services Authority will review all cases and work with the member to ensure that there is an appropriate solution to support each individual member’s circumstances. The current arrears process can allow members to make the payments over a period of time, if they choose to do so. Employers will also be able to agree payment plans, in line with normal practice.

The department recognises the importance of there being an appropriate amount of time available for employers and members to take action where necessary. Regarding the timeframe for employers to notify affected members of the option to now retrospectively pension their additional hours, the department will amend the deadline for employers to do so from 1 October 2025 to 1 January 2026. This allows further time for the NHS Business Services Authority to work with and help employers take action.

Members will have 3 months from the date of receiving this notification to make their election. The regulations allow employers to extend this period where their staff need further time to make their election, up to a backstop of 1 July 2026 by which time all elections should be made.

The department is working with the NHS Business Services Authority to ensure that the administration processes for this proposal work as efficiently as possible within the current business as usual framework. The NHS Business Services Authority anticipates that the number of employers affected, if any, should be minimal.

Method for calculating member contributions if they are on reduced pay

The consultation set out proposed amendments to clarify how members’ contribution rates should be calculated when they are in receipt of less pay than they usually would be, due to certain types of authorised absences.

Summary of consultation proposals

As outlined in the consultation, the way that contribution rates are calculated for the NHS Pension Scheme was changed on 1 October 2022. Instead of the contribution rate being based on members’ WTE, contribution rates are now calculated using their actual annual pay. This means that many part-time members of the NHS Pension Scheme pay fewer contributions than they previously would have done. The department sought to reach agreement with stakeholders, prior to bringing in these policy changes.

The same policy principles apply to calculating contribution rates when members are on reduced pay and the consultation sought to reach agreement on 2 amendments to clarify the approach in regulations.

First, it was proposed that amendments would be made to clarify that, from 1 October 2022, member contribution rates are based on actual reduced pensionable pay, rather than what the member would have been paid if they were on full pay (commonly referred to as ‘deemed pay’). It was not proposed that this amendment would affect benefit accrual, and members still build up benefits based on their deemed pay.

Second, there was a proposal to amend the calculation for unpaid leave so that contribution rates can be calculated for members who go straight from full pay to zero pay, rather than step down to reduced pay, prior to moving to zero pay. This is a technical amendment to ensure that members who go straight to zero pay can continue to accrue pension benefits, in certain circumstances. No changes to the method of calculating member contributions for members who are on unpaid leave were proposed, with the pensionable pay from directly before the member went on unpaid leave continuing to be used in these circumstances.

Consultation feedback

The department sought to reach agreement on the proposals, through the consultation with stakeholders (through the Scheme Advisory Board) and public consultation.  

Respondents were asked 2 questions as part of the consultation. First, they were asked whether they agreed or disagreed with the proposal to clarify that member contribution rates should be based on actual annual pensionable pay for members who are in receipt of reduced pay.

Of the 21 responses received to this question:

• 12 (57%) agreed
• 4 (19%) disagreed
• 5 (24%) didn’t know

Most respondents agreed with the proposals because they felt that it reduced the financial strain on members who were on certain types of authorised leave. Some respondents expressed that they felt this proposal supported inclusivity and affordability, particularly for certain types of scheme member - for example, those with caring responsibilities.

The Scheme Advisory Board noted that some employers had been calculating member contribution rates based on reduced pay and that this change would bring consistency across employers.

Some respondents raised concerns about the administrative impact of backdating changes to 1 October 2022. There were concerns raised that employers might find the changes burdensome.

Respondents (such as the British Medical Association and the Scheme Advisory Board) also highlighted the need for clear communications to members, so that affected members who are due a refund understand why they are receiving the refund.

Not all respondents who disagreed with the proposal gave a reason for doing so. One reason for disagreeing with the question was that employees on a reduced level of pay would pay fewer contributions than members on an unreduced level of pay, despite receiving the same pension benefit. The other reason for disagreeing was that the deeming provision (which means that members still build up benefits based on their full pay) provides fairness where the absence is not the member’s fault - for example, due to sickness.

The second question respondents were asked was whether they agreed or disagree that, for members on unpaid leave who choose to continue building up pension scheme benefits, their member contributions should be based on their pay period immediately before they went on unpaid leave.

Of the 21 responses received to this question:

• 14 (67%) agreed
• 5 (24%) disagreed
• 2 (10%) didn’t know

(Percentages have been rounded to the nearest whole number so might not total 100% when rounded.)

Respondents were generally very supportive of the proposal and a number of responses explained that they thought it was fair and would create consistency. The British Medical Association said that the mechanism for calculating contributions when on unpaid leave was understood. They added that the change should mean there is less potential for administrative errors, compared with calculating the rate by using a level of pay that has not been paid or received by the member, before their pay reduced to zero.

The Scheme Advisory Board raised concerns about the administrative burden of determining the correct contribution rate. They also made a couple of further suggestions about members’ contributions when they are on unpaid leave. First, they suggested that the regulations could be amended to allow members to pay a higher level of contributions before they go on leave. This was suggested to minimise opt outs from members who return from unpaid leave and pay contribution arrears. Second, the Scheme Advisory Board suggested that a default ‘buy back rate’ be applied to contribution arrears, perhaps by using the lowest member contribution tier (which is currently 5.2%). The Scheme Advisory Board cited reasons of transparency, consistency and administrative simplicity for this suggestion.

The Royal College of Nursing also raised that they believe the option to continue building up pension benefits even when on unpaid leave is underutilised. They believe that this is due to limited or non-existent pension advice in the workplace and said that they would welcome standard advice issued by the NHS Business Services Authority and training resources from NHS Employers.

One respondent who disagreed did so because they felt that contribution rates should be based on what members actually receive, rather than the amount of pay they had previously received. On the other hand, another respondent disagreed because they said that the contributions should be based on annual salary.

The NHS Pension Board urged the NHS Business Services Authority to offer support to employers to ensure the changes to contributions are easy to understand. Their reasons for this were not only so that the changes are implemented correctly, but also to ensure members receive consistent and accurate information from both their employer and the NHS Business Services Authority about their member contributions and their benefits.

Government response

The department welcomes the responses to the 2 questions on this section and notes that most respondents agreed with the proposals.

One respondent disagreed with the proposal to use members’ actual reduced earnings to calculate the contribution rate because this means that some members will pay fewer contributions than other members whose pay is unreduced. The department has considered this feedback and has balanced it against other respondents that believe the proposal would lead to fair outcomes for members. While the respondent is correct that both members would receive the same pension benefit, despite one member having paid fewer contributions, this is believed to be fair and equitable given that the member on reduced pay has received less pay.

The other reason for disagreeing with the proposal was that the deeming provision creates fairness, particularly when the member is on leave due to a reason outside of their control - for example, sickness absence. The deeming provision referred to here means that members build up pension benefits as if they are still in receipt of full pay. The department has noted this concern and would like to reassure members that the deeming provision will still be applied when calculating the benefits that the member will build up. The consultation document and draft regulations do not change the amount of benefits, only the amount of contributions that are paid for those benefits.

Concerns were raised about the administrative burden of these changes. The department notes that there has been inconsistency in the way that the contributions have been calculated since October 2022 and it is correct that this should be rectified. The changes to the regulations clarify the approach that applied from 1 October 2022 and was included in payroll requirements. Where payroll providers have followed the payroll requirements, no changes will need to be made. However, where payroll providers did not implement those changes, they will need to do so now and backdate the changes to 1 October 2022 to ensure that members are treated consistently. The department acknowledges that this may create an administrative impact on payroll providers if they did not implement the payroll requirements at the appropriate time.

For the second proposal, which related to members when they are on unpaid leave, respondents disagreed for contrasting reasons. Members must make contributions to build up benefits in the NHS Pension Scheme. Therefore, where members are on unpaid leave, member contributions cannot be based on their actual pay figure of zero because that means that no contributions would be payable. Instead, the regulations have been drafted to calculate members’ pension contributions by looking at the amount that they were paid directly before their pay dropped down to zero.

Similar reasoning applies to the suggestion from the Scheme Advisory Board that members could pay the lowest contribution rate and that this would help with administrative simplicity. However, a pay figure is still needed to apply the contribution rate to. Consequently, amending the 2015 Regulations to allow a different rate to the pay figure could introduce more complexity. In practice, many members who receive reduced pay prior to going on unpaid leave (for example, if they are in receipt of statutory maternity pay) will be in the lowest contribution tier. However, the proposal would mean retaining the current method of calculation and basing member contributions on the amount of pay that they received prior to their pay reducing to zero.

Concerns were raised across both questions about the need to provide clear and consistent information. This was raised both in relation to members who may receive a refund and ensuring that they understand why they receive the refund, and in relation to members who can continue to build up pension savings when they are on unpaid leave. The department welcomes these suggestions and will consider how best to ensure that clear communications and guidance are provided. 

In addition to the changes set out in the consultation document, the department will also amend regulation 28 (Pensionable earnings: break in service) of the 2015 Regulations to take out the gendered reference to women on maternity leave when disregarding days where members return to work for the purpose of keeping in touch when calculating reduced pay. This amendment will clarify that keeping in touch days for all members who are on adoption leave or shared parental leave will be treated in the same way and ensure consistency across the different types of leave when calculating reduced pay for the purposes of member contributions.

Given the positive feedback received and taking into account the reasons given for disagreeing with the proposal, the department intends to implement the changes set out in the consultation document and the amendment to keeping in touch days outlined above.

GP and non-GP provider annual certificates of pensionable profit

The consultation outlined proposals to provide for GPs and non-GP providers to update their annual certificate of pensionable earnings where provisional figures are used to the amount declared to HMRC on their revised tax return for 2024 to 2025 onwards. This proposal was required as a result of HMRC’s reforms to standardise the accounting period for businesses.

Summary of consultation proposals

As set out in the consultation, the profits of unincorporated businesses must be taxed on a ‘tax year’ basis from 6 April 2024. This change affects GP practices that do not align their annual accounting period with the tax year. This new requirement was brought about by HMRC changes to primary legislation, and the department estimated this to affect around 30% of practices in England and Wales.

The consultation proposed to make a minor amendment to the 2015 Regulations which would mean that affected GPs and non-GP providers must provide a revised annual certificate of pensionable earnings to the host board where their GP practice accounting year is not aligned with the tax year, and where their certificate was based on a provisional figure submitted to HMRC in their Self Assessment tax return.

It was proposed that an updated annual certificate must be completed and sent to the host board within one month of the deadline for the member to notify HMRC of the correct figure on their amended tax return. The host board would then determine the correct amount of pension contributions and pensionable earnings.

Consultation feedback

Respondents were asked whether they agreed or disagreed that the proposed changes to scheme rules about the annual certificate of pensionable profit should be implemented.

Of the 20 responses received to this question:

• 9 (45%) agreed
• 1 (5%) disagreed
• 10 (50%) didn’t know

The British Medical Association supported this proposal. They noted that it was due to tax legislation encouraging unincorporated businesses to align their accounting period with the UK tax year. Unincorporated businesses who do not wish to align their accounting period with the UK tax period will report provisional figures which are then amended when final figures are known. This means that finalised figures will align with the UK tax year.  

The Scheme Advisory Board emphasised that their primary concern was ensuring that no unexpected issues arise during the transition year in which the changes are implemented.

The NHS Business Services Authority agreed with the proposal to change the wording of the regulations to support where a GP practice does not align its annual accounting period with the tax year and provisional figures have been included in the GP’s tax return and therefore also in the annual certificate. Once the estimated pay can be confirmed at the time of the following year’s tax return, the earlier annual certificate may need to be revised. They also confirmed that the wording of the draft regulation itself is clear.

Finally, one respondent commented that GP pensions seem very complicated to process, although they did not expand on this other than to say that pensions for administrative staff are more straightforward. Some of the respondents commented on the complexity of the transition year. While the transition year is outside of the scope of this consultation, those comments have been noted.

Of the respondents who disagreed or did not know, one respondent explained that they did not know enough about the topic to comment.

Government response

The department is grateful for the responses received on these proposals and notes the general support for this proposal. The department will proceed with the proposal and monitor any potential complications identified in the transition year.  

The department intends to lay the draft regulations that were consulted on, with one small refinement that does not change the policy intention. This is to remove the definition of ‘provisional figures’ that it previously planned to include in the draft regulations. On reflection, adding an additional definition is unnecessary, as this term has its natural and ordinary meaning.

Revocation or lapsing of deferred McCloud remedy choices

The consultation outlined proposals to allow McCloud remedy ‘deferred choice election’ choices to lapse or be revoked, in certain circumstances.

Summary of proposals

Eligible members will be given a choice at retirement of taking legacy scheme benefits or electing to take 2015 equivalent scheme benefits for their pensionable service during the 7-year period between 1 April 2015 to 31 March 2022 (sometimes known as the ‘remedy period’).

Regulations for eligible members to make that choice on retirement, known as a ‘deferred choice’, are already in place. The consultation detailed the department’s proposal to change the regulations to allow a deferred choice election to be revoked or to lapse in 2 specific circumstances.

The first proposed change was to allow members to revoke a deferred choice election up to 2 weeks before their benefits are due to be put into payment. The second proposed change was to cause a deferred choice election made by a member to lapse in circumstances where the member dies more than 2 weeks before the day on which their first benefit payment is due.

Consultation feedback

Respondents were asked 2 questions as part of the consultation. First, they were asked whether they agreed or disagreed with the proposal to allow members to revoke a deferred choice election up to 2 weeks before the day on which the first benefit payment is due.

Of the 20 responses received to this question:

• 15 (75%) agreed
• 0 (0%) disagreed
• 5 (25%) didn’t know

A number of respondents provided comments on this question. The Scheme Advisory Board, NHS Pension Board and British Medical Association were supportive of the proposal provided that the 2-week window gave. They queried whether the 2-week period would give the NHS Business Services Authority enough time to enact the revocation and/or asked that the effects of the proposal on the NHS Business Services Authority were properly assessed and resourced. The Scheme Advisory Board also commented that it may be appropriate to include a provision in the proposed regulations to extend the cancellation deadline for certain cases. The Royal College of Nursing, one NHS employer and one individual respondent agreed with the proposal and commented that they were supportive of the proposal and the flexibility it provided to members.

The NHS Pension Board also requested in their response that communications with members about their McCloud remedy choices are accessible to minimise confusion and delays. The NHS Business Services Authority agreed that the proposal was reasonable. It sought clarity on whether the proposal was to allow revocations up to 2 weeks before members’ ‘payable date’ or the first date the member would receive pension benefits, as these dates may not always be the same. This would be the case where a member does not receive a lump sum payment upon pension commencement and their first payment of benefits is of an annual pension.

The second question respondents were asked was whether they agreed or disagreed with the proposal that a deferred choice election lapses if the scheme manager is notified of the death of the member and that notification is received up to 2 weeks before the day on which the first benefit payment is due.

Of the 20 responses received to this question:

• 14 (70%) agreed
• 1 (5%) disagreed
• 5 (25%) didn’t know

Three respondents provided comments on this proposal. The British Medical Association supported the flexibility this gave to members’ beneficiaries to make the best financial decision for their circumstances. The Scheme Advisory Board responded that they supported this proposal and that the lapsing of a choice in these circumstances would not mean that members’ original decision would be inappropriate. The Royal College of Nursing supported the proposal as it ensures decision making power transfers to designated persons, allowing them to make decisions in the best interests of deceased members’ beneficiaries.

Government response

The department is grateful for the consideration respondents have given to these proposals.

The proposal consulted on is that revocations to deferred choice elections will be accepted if members notify the NHS Business Services Authority in writing and in such form as required, more than 2 weeks before the date the first payment of benefits is due. The consultation made it clear that primary legislation does not allow revocations after any benefits have become payable after the end of a member’s deferred choice election period. The department has raised feedback as to whether 2 weeks would give the NHS Business Services Authority sufficient time to enact a revocation with the authority. The NHS Business Services Authority will strive to ensure the first payment of benefits reflect members’ changed decisions. However, the adjustments to benefit calculations required may mean that some members will see their benefits changed retrospectively after their first benefit payment to account for this change. The earlier members inform the NHS Business Services Authority that they wish to change their deferred choice decision, the more likely the NHS Business Services Authority will be able to ensure that members’ first benefit payment will reflect this change.

The department continues to recognise the importance of clear communications for members affected by the discrimination identified by the McCloud judgment and its remedy. It is working with the NHS Business Services Authority, external experts, NHS trade unions and NHS employers to develop and user-test remedy-related member communications and resources.

In response to the NHS Business Services Authority request for clarification on the deadline to revoke an election, the department can clarify that it intends for the cancellation deadline to be 2 weeks before the date any benefits become payable after the end of their deferred choice election period, or such later date before any benefits become payable after the deferred election period as the scheme manager considers reasonable in the circumstances of a specific case. The department will make changes to the draft regulations to remove any ambiguity over this deadline.

Technical and miscellaneous amendments

The consultation also proposed a series of technical and miscellaneous amendments to scheme regulations. These related to 6 different areas:

• neonatal care leave
• the meaning of pensionable service
• parental bereavement leave
• the implementation of revised costs for additional pension
• members who incorrectly accrued benefits in the 2008 Section after 1 April 2015
• the forfeiture of lump sums

Neonatal care leave

Neonatal care leave and pay is a new entitlement to leave and pay for employees with responsibility for children receiving neonatal care. This will come into force on 6 April 2025. The consultation outlined proposed amendments to include references to neonatal care leave in scheme regulations.

Summary of proposals

The consultation proposed a series of amendments to scheme regulations, to insert references to neonatal care leave alongside references to other types of authorised leave under the scheme, such as maternity leave. This would mean that members on neonatal care leave could continue to build up pension benefits. Under this proposal, member contributions for those on neonatal care leave would be calculated like they are for other authorised absences from work, such as maternity leave.

Consultation feedback

Respondents were asked if they agreed or disagreed that provision should be made for members to continue building up pension benefits while on neonatal care leave as part of the consultation.

Of the 21 responses received to this question:

• 17 (81%) agreed
• 3 (14%) disagreed
• 1 (5%) didn’t know

Respondents were very positive about the proposed changes and agreed that these changes should be made so that neonatal care leave is treated consistently with other similar types of authorised leave. One respondent raised that it could help address the gender pension gap and another respondent said the change ensures that members are not disadvantaged for taking necessary time off to care for their newborns.

Three respondents disagreed but did not give reasons for doing so.

Government response

The department is grateful for the responses received on these proposals and will implement the changes outlined in the consultation document.

Meaning of qualifying service

Previously, deferred members of the 1995 Section who returned to NHS employment or scheme membership between 1 October 2008 and 31 March 2015 after a break of 5 years or more could join the 2008 Section on their return. However, when changes were made to regulations in 2015, the provisions that allowed qualifying service in the 1995 Section to count as qualifying service in the 2008 Section were removed in error. Therefore, the consultation outlined proposals to correct this.

Summary of proposals

The consultation proposed to correct this error retrospectively, from 1 April 2015, by making amendments to scheme regulations. These amendments would mean that qualifying service in the 1995 Section would continue to count as qualifying service in the 2008 Section for affected members.

Consultation feedback

As part of the consultation, respondents were asked if they agreed or disagreed with the proposal to make a retrospective correction, so that qualifying service in the 1995 Section would continue to count as qualifying service in the 2008 Section for relevant 1995 Section deferred members who joined the 2008 Section between 1 October 2008 and 31 March 2015.

Of the 20 responses received to this question:

• 16 (80%) agreed
• 0 (0%) disagreed
• 4 (20%) didn’t know

Respondents broadly agreed with this proposal and acknowledged that it corrects a historical error. There were no responses that disagreed with the proposal and while some respondents did not know whether they agreed or disagreed, no further commentary was provided.

Government response

The department is grateful for the responses received to this proposal and will proceed with the changes outlined with the consultation document.

Parental bereavement leave

Parental bereavement leave was added to the NHS Pension Scheme regulations in 2020 via amendments made by the Parental Bereavement Leave and Pay (Consequential Amendments to Subordinate Legislation) Regulations 2020 (‘the 2020 Regulations’). These amendments were designed to ensure that members on parental bereavement leave were treated in the same way as members on other types of leave. Although this happened in practice, the 2020 Regulations inadvertently omitted to amend certain cross references to various types of leave in the 2008 Regulations to include parental bereavement leave. The consultation therefore proposed to correct this.

Summary of proposals

The consultation proposed to insert relevant cross references to parental bereavement leave into the 2008 Regulations retrospectively, from 6 April 2020. As a result of the proposal, the scheme regulations would treat members on parental bereavement leave in the same way as members on maternity leave, adoption leave, paternity leave and parental and shared parental leave.

Consultation feedback

Respondents were asked if they agreed or disagreed that the 2008 Regulations should be amended to fully reflect the practice of treating members on parental bereavement leave in the same way as members on maternity leave, adoption leave, paternity leave and parental and shared parental leave.

Of the 20 responses received to this question:

• 20 (100%) agreed
• 0 (0%) disagreed
• 0 (0%) didn’t know

All respondents agreed with this proposal and the comments received were supportive of updating cross referencing so that the 2008 Regulations are consistent with the original policy intention.

Consultation response

The department is grateful for the responses received on these proposals and will proceed with the changes outlined with the consultation document.

Implementation of revised costs for additional pension

Members of the NHS Pension Scheme have the option to purchase additional pension. The cost of this depends on factors that change from time to time. According to the 1995 and 2008 Regulations, new factors may apply immediately to new purchases that begin after the revised factors are introduced, but new factors apply from the beginning of the next scheme year for purchases already in progress. However, the 2015 Regulations state that new factors apply immediately in all cases. The consultation therefore outlined a proposal to make all 3 sets of regulations consistent.

Summary of proposals

The consultation proposed an amendment to the 2015 Regulations, with effect from 1 April 2025. This would align all 3 sets of regulations, so that new factors may apply immediately to new purchases that begin after the revised factors are introduced. For purchases already in progress, the new factors apply from the beginning of the next scheme year.

Consultation feedback

As part of the consultation, respondents were asked if they agreed or disagreed that the 2015 Regulations should be amended so that new purchases of additional pension that begin after an in-year change to the cost will be based on that new cost.

Of the 19 responses received to this question:

• 9 (47%) agreed
• 4 (21%) disagreed
• 6 (32%) didn’t know

Although a number of respondents disagreed with the proposal or did not know whether they agreed or disagreed, the commentary received from respondents was supportive.

Respondents acknowledged that the proposal corrected an unintended inconsistency in the 2015 Regulations, compared with the 1995 and 2008 Regulations. The NHS Business Services Authority added that it also removes any uncertainty and confusion for members who may start paying at one rate only to receive an adjustment to the cost a few months later.

Of the 4 respondents who disagreed with the proposal, only one, the British Medical Association, provided comments. These comments focused on the difference between additional pension and added years, and the link this may have with the gender pensions gap. This is discussed in more detail in the statutory duties section of this document.

Government response

The department is grateful for the responses received on these proposals and will proceed with the changes outlined with the consultation document.  

Members who incorrectly accrued benefits in the 2008 Section after 1 April 2015

The consultation explained that the Public Service Pensions Act 2013 prevented most members from accruing benefits in legacy public service pension schemes from 1 April 2015. Members who met certain criteria could continue accruing benefits in legacy schemes, where they had service in a public service pension scheme before 1 April 2012. However, in the NHS Pension Scheme, the 2008 Regulations incorrectly stated that the requirement was for members to have had service in the 2008 Section “on or before 1 April 2012”. This meant that 135 members who first joined the 2008 Section on 1 April 2012 were incorrectly permitted to remain members of that section after 1 April 2015.

Summary of proposals

The consultation proposed to correct this error with retrospective effect from 1 April 2015. Under this proposal, the 135 members of this group would automatically become entitled to 2015 Scheme benefits for their service between 1 April 2015 and 31 March 2022, when the 2008 Section closed to all members. For most members, 2015 Scheme benefits are likely to be higher, so they would not be negatively affected as a result of this proposal.

However, it is estimated that for between 30 and 50 members of this group, 2008 Section benefits are likely to be higher. The consultation proposed a further amendment to regulations, to ensure that these members are not worse off because of the correction. This proposal would allow for additional payments to be paid to members, to bring their benefits earned between 1 April 2015 and 31 March 2022 up to the same level as the benefits that would have been paid from the 2008 Section.

Consultation feedback

As part of the consultation, respondents were asked if they agreed or disagreed that members should not be worse off as a result of the retrospective correction to membership eligibility and should, if necessary, receive an additional payment from the 2015 Scheme to make up any difference between 2008 Section benefits and 2015 Scheme benefits for service between 1 April 2015 and 31 March 2022.

Of the 20 responses received to this question:

• 19 (95%) agreed
• 0 (0%) disagreed
• 1 (5%) didn’t know

Four respondents provided comments on this proposal. The British Medical Association, the Royal College of Nursing and the Scheme Advisory Board agreed that affected members should not face financial detriment because of the proposed correction. The Scheme Advisory Board and the British Medical Association highlighted that some members may have already made retirement decisions based on accruing 2008 Section benefits between 1 April 2015 and 31 March 2022, and that it would not be appropriate to retrospectively reduce their benefit accrual.

Government response

The department is grateful for the responses received on these proposals and intends to proceed with the proposal as set out at consultation.

Forfeiture of lump sums

Survivor benefits payable in the NHS Pension Scheme, including adult survivor pensions and lump sums, may be forfeited if the intended beneficiary (‘the survivor’) is convicted of the murder or manslaughter of that member, or of any other offence of which unlawful killing of that member is an element. Provisions in the 2008 Regulations and 2015 Regulations providing for lump sums on death clarify that these will not be payable to the convicted beneficiary by cross referring to other regulations on forfeiture. However, these references currently point to offences of which the member is convicted. This is an error, and instead these references should point only to offences of which the intended beneficiary is convicted. The consultation therefore set out proposals to correct this.

Summary of proposals

The consultation proposed to correct the relevant references with retrospective effect from 1 April 2008 (for the 2008 Section) and 1 April 2015 (for the 2015 Scheme). Under this proposal, the lump sum provisions in scheme regulations would accurately cross-refer to a beneficiary’s conviction for unlawfully killing a member, rather than any offence for which a member has been convicted. This would align the regulations with practice and policy.

Consultation feedback

Respondents were asked whether they agreed or disagreed with the proposal to correct scheme regulations so that the power to forfeit lump sums accurately refers to a beneficiary’s conviction for unlawfully killing the member, rather than any offence for which the member had been convicted, as part of the consultation.

Of the 20 responses received to this question:

• 14 (70%) agreed
• 3 (15%) disagreed
• 3 (15%) didn’t know

Respondents were broadly supportive of the proposal. In particular, the Scheme Advisory Board and Royal College of Nursing recognised the change is due to a drafting error and correction will ensure alignment of the policy intent, current practice and purpose. The British Medical Association and the Royal College of Nursing proposed that the lump sum and/or survivor benefits should instead be payable to the deceased’s estate where forfeiture as a result of a beneficiary’s conviction has been directed. Another respondent disagreed because they felt that a driving offence is different to unlawful killing so suggested that the length of sentence or severity of the crime should be considered when deciding to exercise forfeiture powers.

Government response

The department is grateful for the responses received on these proposals. The department acknowledges the concern about dependents not being able to benefit from any lump sum or survivor pension where forfeiture is directed in this scenario and can confirm that the existing regulations require any lump sum on death benefit would be paid to the member’s personal representatives in cases where there is no beneficiary.

The regulations do not allow for the survivor pension benefits to be paid to someone else. This is because the eligibility criteria cannot be met by someone who is not a scheme partner, spouse or civil partner of the member. However, where benefits are payable to dependent children, higher rates may be payable where a survivor pension is not in payment.

The department notes the comment on different severities of crimes related to unlawful killing. The existing regulations provide the Secretary of State with the power to forfeit none, all or part of a beneficiary’s benefits on a case-by-case basis.

Considering the responses received, the department will proceed to correct the relevant references as proposed.

Statutory duties

The department considered the effect of the proposed changes in the context of the required statutory duties, including the public sector equality duty (PSED), and set out its initial analysis in the consultation document.

Consultation feedback

As part of the consultation, respondents were asked if there were any further equality issues as a result of the proposed changes, that they thought the department should consider.

Of the 21 responses received to this question:

• 3 (14%) answered yes
• 11 (52%) answered no
• 7 (33%) didn’t know

(Percentages have been rounded to the nearest whole number so might not total 100% when rounded.)

Respondents requested that the department closely monitor the effect of these changes on groups with protected characteristics, particularly women, who it was felt could be disproportionately affected by part-time work and career breaks.

A small number of respondents also raised the gender pension gap in the NHS Pension Scheme and suggested that the department consider additional steps that might be taken to close the gender pension gap. The Scheme Advisory Board stated they would welcome the opportunity to consider the gender pension gap further.

Finally, the British Medical Association raised concerns that moving members into the 2015 Scheme may have exacerbated the gender pension gap due to ending access to added years contracts to supplement periods of part-time working. The British Medical Association took the opportunity to highlight their view that access to added years contracts for legacy scheme members should be restored or to allow additional pension to be purchased at the same rate as pension earned through employment.

Government response

The department is grateful for the responses received to this question and notes the interest in exploring the gender pension gap. The department will work with the Scheme Advisory Board to consider the gender pension gap in further detail.

The department’s view is that the PSED analysis published as part of the consultation remains relevant.

Additional proposals

From time to time, the department will consult on proposals that will not come into force straight away. This section sets out proposals that were previously consulted on and sets out the next steps.

Abolition of the lifetime allowance

The department previously consulted on a proposal related to the abolition of the lifetime allowance and the introduction of new allowances following the Finance Act 2024. This consultation ran from 26 October 2023 to 7 January 2024 and the department published its response to that consultation on 22 February 2024.

Background

The previous consultation proposed making consequential amendments to scheme regulations to update relevant definitions and ensure the smooth operation of current provisions and any future requirements relating to the lifetime allowance and new allowances. The National Health Service Pension Schemes (Amendment) Regulations 2024 (SI 2023/281) made consequential amendments relating to partial retirement and the types of benefit that can be taken from the NHS Additional Voluntary Contributions Scheme. These amendments came into force in April 2024 and were made because these provisions were not fully covered by the provisions of the Finance Act 2024.

The department proposed to make the remaining amendments to provisions in the next amending instrument. These proposals included:

• amending regulations which apply prior to 6 April 2024 and relate to the lifetime allowance
• removing references to the lifetime allowance provisions from 6 April 2024
• amending the regulations to introduce the new allowances

The consequential amendments will be made retrospectively to 6 April 2024 to take effect from the start of the financial year 2024 to 2025. 

As part of that earlier consultation, the department asked whether respondents agreed or disagreed with the proposal to amend scheme regulations with the intended effect of removing reference to the lifetime allowance. Of the 160 responses received:

• 99 (62%) agreed
• 16 (10%) disagreed
• 45 (28%) didn’t know

The proposal was to amend scheme regulations with retrospective effect to 6 April 2024 to ensure that references to the lifetime allowance are redundant from 6 April 2024 and to transition to the new allowances. The department concluded that it would go ahead with the remaining consequential amendments.

Draft amending regulations

The draft regulations which were included within the consultation document did not provide for the remaining consequential amendments relating to the abolition of the lifetime allowance. This section explains how these remaining consequential amendments will operate in scheme regulations.

Amending regulation 4 amends regulation T2A of the National Health Service Pension Scheme Regulations 1995 (SI 1995/300) (the 1995 Regulations) and comes into effect retrospectively from 6 April 2024.

Paragraphs (2), (4), (6), (8), (10) and (13) of amending regulation 4 amend paragraphs (2), (7), (8), (8A), (8B) and (10) of regulation T2A to make these paragraphs effective only before 6 April 2024, as they reference provisions of the lifetime allowance and are therefore redundant from 6 April 2024.  

Paragraphs (3), (5), (7), (9), (11) and (14) of amending regulation 4 insert new paragraphs (2B), (2C), (7A), (8ZA), (8AA), (8C) and (10A) into regulation T2A to mirror the provisions in the redundant paragraphs, only with reference to the provisions in section 14 and schedule 9 of the Finance Act 2024. Paragraph (9) of regulation T2A is amended by paragraph (12) of the amending regulation 4 to include reference to the inserted new paragraphs in regulation T2A.

Amending regulation 6 amends regulation 16 of the National Health Service Pension Scheme (Additional Voluntary Contributions) Regulations 2000 (SI 2000/619), applicable to members who have made additional voluntary contributions, and comes into effect retrospectively from 6 April 2024.

Paragraphs (2) and (4) of amending regulation 6 amend paragraphs (3) and (4) of regulation 16 to make them effective before 6 April 2024 only, as they reference provisions of the lifetime allowance and are therefore redundant from 6 April 2024.  

Paragraphs (3) and (5) of amending regulation 6 insert new paragraphs (3A) and (4A) into regulation 16 to mirror the provisions in the redundant paragraphs, only with reference to the provisions in section 14 and schedule 9 of the Finance Act 2024. Paragraph (5) of regulation 16 is amended by paragraph (6) of amending regulation 6 to include references to the inserted new paragraphs in regulation 16.

Amending regulation 14 amends regulation 2.J.8 of the 2008 Regulations, applicable to officer members of the 2008 Section, and comes into effect retrospectively from 6 April 2024.

Paragraph (2) of amending regulation 14 amends paragraphs (2) of regulation 2.J.8 to make this paragraph effective only before 6 April 2024, as it references the provisions of the lifetime allowance and is therefore redundant from 6 April 2024.  

Paragraph (3) of amending regulation 14 inserts new paragraph (2A) into regulation 2.J.8 to mirror the provision in the redundant paragraph, only with reference to the provisions in section 14 and schedule 9 of the Finance Act 2024.

Amending regulation 20 amends regulation 3.J.8 of the 2008 Regulations, applicable to practitioner members of the 2008 Section, and comes into effect retrospectively from 6 April 2024.

Paragraph (2) of amending regulation 20 amends paragraphs (2) of regulation 3.J.8 to make this paragraph effective only before 6 April 2024, as it references the provisions of the lifetime allowance and is therefore redundant from 6 April 2024.  

Paragraph (3) of amending regulation 20 inserts new paragraph (2A) into regulation 3.J.8 to mirror the provision in the redundant paragraph, only with reference to the provisions in section 14 and schedule 9 of the Finance Act 2024.

Amending regulation 29 amends paragraph (16) of schedule 3 of the 2015 Regulations and comes into effect retrospectively from 6 April 2024.

Paragraphs (2), (4), (6), (8), (10) and (13) of amending regulation 29 amend sub-paragraphs (2), (7), (8), (9), (10) and (12) of paragraph (16) to make these paragraphs effective only before 6 April 2024, as they reference provisions of the lifetime allowance and are therefore redundant from 6 April 2024.  

Paragraphs (3), (5), (7), (9), (11) and (14) of amending regulation 29 insert new sub-paragraphs (2A), (7A), (8A), (9A), (10A) and (12A) into paragraph (16) to mirror the provisions in the redundant sub-paragraphs, only with reference to the provisions in section 14 and schedule 9 of the Finance Act 2024. Sub-paragraph (11) of paragraph (16) is amended by paragraph (12) of the amending regulation 29 to include references to the inserted new sub-paragraphs in paragraph (16).

Conclusion and next steps

The department is grateful for the responses received during the consultation, which have helped test the proposals and provided valuable insight.

Following this consultation, the department intends to proceed with the following proposals to amend scheme regulations from 1 April 2025 through secondary legislation:

• amend the definition of overtime in the 2015 Scheme so that it aligns with the long-standing policy and practice for additional hours worked by part-time staff to be pensionable up to WTE hours
• clarify the method for calculating member contributions where pay reduces during a period of absence
• provide for GPs and non-GP providers to update their annual certificate of pensionable profits for 2024 to 2025 to the amount declared to HMRC on their revised tax return
• allow members who are affected by the McCloud remedy to revoke a deferred choice election or for a deferred choice election to lapse in certain circumstances
• allow members on neonatal care leave to continue building up pension benefits
• ensure that qualifying service in the 1995 Section continues to count as qualifying service in the 2008 Section for relevant 1995 Section deferred members
• amend the 2008 Regulations to fully reflect the practice of treating members on parental bereavement leave in the same way as members on maternity leave, adoption leave, paternity leave and parental and shared parental leave
• correct an inconsistency in the 2015 Regulations, so that all new purchases of additional pension that begin after an in-year change to the cost will be based on that new cost
• correct the eligibility criteria for membership of the 2015 Scheme, while ensuring that any impacted members will not be any worse off as a result
• correct cross references in lump sum provisions in the 2008 and 2015 Regulations so that they correctly refer to a beneficiary’s conviction for unlawfully killing the member, rather than any offence for which the member had been convicted

Some of the amending regulations in this piece of legislation will have retrospective effect; where this is the case, this is described in the relevant section of this document.

Following consultation, the department has determined that 4 minor changes are required to specific elements of the proposals:

• where part-time members of staff worked additional hours up to WTE between 1 April 2015 and 31 March 2024 and these hours were treated as non-pensionable, the department has concluded that employers will have until 1 January 2026, rather than until 1 October 2025, to notify them of their right to make an election. This change should allow the NHS Business Services Authority sufficient time to provide the necessary advice to employers and for employers to then issue the required notices. In line with this change, the timeline for members to make their election has been amended by 3 months
• for members who return to work for the purpose of keeping in touch while on reduced pay, the department will also amend the regulations to take out the gendered reference to women on maternity leave. This change will clarify that keeping in touch days for all members who are on adoption leave or shared parental leave will be treated in the same way and ensure consistency across the different types of leave when calculating reduced pay for the purposes of member contributions
• where the regulations will refer to provisional figures for the purpose of GP and non-GP provider annual certificates of pensionable profit, the department will no longer include a definition of provisional in the regulations. This is because this term has its natural and ordinary meaning
• in relation to the revocation or lapsing of deferred choice elections the department will make changes to the draft regulations to remove any ambiguity over the relevant deadlines. The department can clarify that the relevant cancellation deadline will be 2 weeks before the date any benefits become payable after the end of a member’s deferred choice election period. This minor change to the language of the draft regulations is in response to feedback from NHS Business Services Authority around an ambiguity in the original drafting. The policy approach will not be changed

As part of the same piece of legislation, the department will also implement changes to scheme regulations necessary following the abolition of the lifetime allowance. The department previously consulted on these changes as part of a different consultation, which ran from 26 October 2023 to 7 January 2024.