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Document How is the value of a transfer into the NHS Pension Scheme calculated?

The process for calculating the value of a transfer into the NHS Pension Scheme from another pension provider is as follows:

Non Club transfers into the 1995 / 2008 Section

  • We take the value offered by the transferring scheme and adjust it to take account of any Guaranteed Minimum Pension included in the transfer.
  • We calculate the cost of purchasing one year of membership in the Scheme. This is determined by using your salary at the date you join the Scheme, or the date that payment has been received. This figure is multiplied by the appropriate factor supplied by the Government Actuary's Department (GAD) that is dependent on age and gender. This allows us to establish how much membership credit can be bought with your transfer value.
  • We will take the adjusted transfer amount and divide it by the cost of purchasing one year of membership in the NHS Pension Scheme.

Non Club transfers into the 2015 Scheme 

The credit resulting from a non Club transfer into the 2015 Pension Scheme is an additional pensionable earnings credit in the year in which the transfer occurs. This additional pensionable earnings credit is calculated in accordance with guidance and factors provided by the government actuary department (GAD) and are dependent on the member’s age, gender and Normal Pension Age (NPA).

How is the pensionable earnings credit calculated?

The transfer payment from the transferring scheme is firstly adjusted if necessary to take account of any Guaranteed Minimum Pension (GMP) liability included in the transfer.
This adjusted transfer value (or the original transfer value if no GMP liability is included) is then multiplied by 54 and the total amount divided by the factor supplied by the government actuary for the purposes of calculating a pensionable earnings credit.
The member earns a pension of 1 / 54th of the pensionable earnings credit. This pension is increased each year by inflation, known as Treasury Orders.
 
Club transfers into the 1995/2008 Section
 
The credit resulting from a Club transfer into the 1995/2008 Section is determined by reversing the calculation of the transfer payment.
 
Differences in scheme design are taken into account to determine the membership credit; however the new scheme membership credit is calculated irrespective of any change in salary between leaving the old scheme and joining the new scheme. 
 
Club transfers into the 2015 Pension Scheme

The credit resulting from a Club transfer into the 2015 NHS Pension Scheme is known as a ‘Club earned pension credit’.
 
In the NHS Pension Scheme this pension credit is revalued in accordance with the transferring scheme’s ‘in service’ revaluation provision whilst the member is in active NHS Pension Scheme membership.
 
How is the Club earned pension calculated?

The Club earned pension is calculated in accordance with guidance and factor tables provided by the government actuary and is dependent on the member's age, gender and Normal Pension Age (NPA). The factor applied adjusts the pension credit to account for any differences between the two schemes, for example if there are any differences in the amount of dependant's benefits payable.

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calculated, transfer value
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