Impact on pension

How it works

Entering into any salary sacrifice arrangement (e.g Childcare Vouchers, Car Schemes etc) that reduces gross pensionable pay will affect your pension built up in that period. The overall effect from participating in a salary sacrifice scheme will reduce the amount of final benefits.

Pension Information

Changes to the NHS Pension Scheme from 1st April 2015 changed the way a Salary Sacrifice impacts on retirement benefits for some staff.

For staff who have Full Protection, i.e. within 10 year of normal pension age at 1st April 2012, they can remain in their existing section of the Scheme and pension benefits will be paid under a Final Salary arrangements and calculated using the best salary in the last 3 years before retirement and is usually the final year’s salary. A salary sacrifice in the period used to calculate retirement benefits will impact on the amount due.

For staff who have Tapered Protection, i.e. based on how many months beyond 10 year of normal pension age at 1st April 2012. For each month beyond 10 years, the tapered protection end date of 31 March 2022 is reduced by two months. They can remain in their existing section of the Scheme and pension benefits until the date of transfer to the new 2015 scheme and will be paid under the Final Salary arrangements and calculated using the best salary in the last 3 years before retirement and is usually the final year’s salary. A salary sacrifice in the period used to calculate retirement benefits will impact on the amount due.

Other staff Without Protection, pension benefits will be paid under the Career Average Revalued Earnings (CARE) arrangements and calculated using all pensionable earnings. A salary sacrifice will reduce earnings and therefore reduce pension benefits paid at retirement. 

http://www.nhsbsa.nhs.uk/Pensions/4019.aspx 

Pension calculator

To see how a salary sacrifice arrangement will affect your pension, you can enter your details into the Pensions Calculator below.