I'm Leaving. What will happen to my pension?
Opting out or ceasing active membership of the superannuation scheme
Following automatic enrolment by your employer, or if you are already an existing member of the NHSSS(S), you decide to opt out of the scheme but are staying in your job, please make sure you fully understand what you are giving up. Before making your final decision, speak to your employer and seek independent financial advice.
If you have less than two years qualifying service in the scheme, you can apply for a refund of the contributions you have paid. Refunds are only available to members under normal pension age. Tax and National Insurance contributions will be deducted from the refund before it is paid to you.
If you have been in the scheme for two or more years, you can leave your benefits with the scheme. These are called Preserved Benefits. If you return to work or decide to contribute to the scheme after preserving your benefits, this additional service may be linked with your preserved service, or if more advantageous, seperate benefits will be awarded in respect of the additional service.
You may be able to transfer the benefits you have earned in the scheme to another pension arrangement. You will be required to contact your new pension provider to request further information about this.
If you have reached normal pension age and opt out of the scheme but carry on working in the NHS, you will not be able to claim your retirement benefits until your employment ends.
Some of the benefits of staying in the superannuation scheme are:
(i) Contributions are taken from your pay before tax, so you get tax relief on any amount you pay.
(ii) From the day you join you receive life insurance cover and family benefits if you die.
(iii) On retirement (after two years membership) you will receive a basic pension payable for life and a one-off tax free lump sum (equal to three times your pension).
(iv) If you are forced to give up work because of ill-health you can apply for ill-Health Retirement and may qualify for an enhancement of your service.
Other information to consider
If you are a member of the 1995 Section of the scheme and decide to opt out and then decide to start contributing to the scheme after a break of five years or more, you will only be eligible to join the 2008 Section of the scheme.
If you compare alternatives with the NHS scheme, you will see that in terms of value for money the scheme is hard to beat, and its benefits are guaranteed.
If you are in any doubt about your options when leaving the superannuation scheme, please seek independent financial advice.