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Document How is a 2015 Scheme pension calculated?

The 2015 Scheme is a Career Average Revalued Earnings (CARE) scheme. The amount of pension you earn each year is determined by what is known as the ‘build up rate’. In the 2015 Scheme the build up rate is 1/54th, so you earn a pension each year of 1/54th of your pensionable earnings.

Your pension earned each year will be increased each year by a rate, known as ‘revaluation’, in the period before you retire or leave. The revaluation rate is determined by Treasury Orders plus 1.5% each year. Treasury Orders are the method by which the Treasury notifies the value of the change to be applied as part of revaluation. The pension earned in a Scheme year (April to March) is revalued on 1 April of the following and each subsequent Scheme year until you retire or leave. For example, if the Treasury Order in a year was 2% then the pension would be revalued by 3.5% at the beginning of the following year.

If you leave this Scheme before becoming entitled to claim your retirement benefits, annual revaluation stops and is replaced at retirement by the addition of Pensions Increase. Pensions Increase is used to maintain the value of your pension against rises in the cost of living.

An example of how this works can be found on the 2015 Member Guide on the NHS Pensions website.
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