The National Health Service (Superannuation Scheme, Pension Scheme, Injury Benefits and Additional Voluntary Contributions) (Scotland) Amendment (No. 2) Regulations 2010

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations further amend the National Health Service Superannuation Scheme (Scotland) Regulations 1995 (S.I. 1995/365) (“the 1995 Regulations”), the National Health Service Pension Scheme (Scotland ) Regulations 2008 (S.S.I. 2008/224) (“the 2008 Regulations”), the National Health Services (Scotland) (Injury Benefits) Regulations 1998 (S.I. 1998/1594) (“the Injury Benefits Regulations”) and the National Health Service Superannuation Scheme (Scotland) (Additional Voluntary Contributions) Regulations 1998 (S.I. 1998/1451) (“the AVC Regulations”).

Regulation 1 (contained in Part 1) provides for citation, commencement and effect, including that certain provisions of this instrument are to take effect from various dates before the date of commencement. Section 12(1) of the Superannuation Act 1972 (c.11) provides authority for the regulations specified in regulation 1(2), (3), (4) and (5) to take effect as from a date earlier than the making of these Regulations.

The remainder of the Regulations is divided into five Parts, with Parts 2 to 5 amending the 1995 Regulations, the 2008 Regulations, the Injury Benefits Regulations and the AVC Regulations respectively and Part 6 providing that certain persons detrimentally affected by these Regulations may elect for the provisions not to apply to them.

Parts 2 and 3 make similar amendments in respect of both the 1995 Regulations and the 2008 Regulations. They also introduce amendments specific to either the 1995 Regulations or the 2008 Regulations.

The changes dealing with similar issues in Parts 2 and 3 (amending the 1995 and 2008 Regulations)—

• introduce new provisions covering the arrangements for certain re-employed pensioner members of the 1995 Regulations to join the 2008 Regulations once a specified period of time has passed since retirement (regulations 3(5), 7, 10, 11, 12, 13, 24(b), 27, 28, 37, 41, 43, 44, 45, 46, 47, 52, 53(b), 55, 56, 62, 66, 67, 68, 69, 70, 71 and 76);

• clarify that in certain circumstances persons who have opted out of the 1995 Regulations and pensioner members of other Health Service schemes (England and Wales, Northern Ireland and the Isle of Man) will not be permitted to join or re-join that Section (regulations 4(2)(a) to (f), 15, 26 and 54). The changes relating to persons who have opted out and who cannot count any service in the 1995 Regulations are made with retrospective effect from 1st April 2008 (see regulation 1);

• introduce uprated pay/earnings bands for the purpose of assessing tiered contribution rates for members and remove the provisions which permit the Scottish Ministers to change the bands and tiered contribution rates by making a determination (regulations 5, 20, 30, 31, 32, 57 and 58);

• specify that the current employer contribution rate is 13.5% (regulations 6 and 33);

• provide for an adjustment to the method of revaluing ‘Additional Pension’ purchased to allow for negative inflation (regulations 17, 35 and 60);

• reflect the respective roles of the Scottish Ministers, the Treasury, the scheme actuary and representatives of employees and employing authorities in the setting of assumptions on which actuarial reports of the scheme’s liabilities are based (regulations 18 and 23);

• allow “pension credit members” to take their benefits early on an actuarially reduced basis and to commute pension on serious ill-health (regulations 19, 36, 38, 61, 63 and 64).

The changes specific to Part 2 (amending the 1995 Regulations)—

• clarify the way in which benefits resulting from a contract to purchase additional service are reduced when the member retires before normal pension age and claims actuarially reduced benefits (regulations 8, 9 and 16);

• provide for the scheme’s obligations in respect of guaranteed minimum pensions to remain linked to age 60 for women and age 65 for men (regulation 14);

• clarify the type of contributions to be paid by a Health Board (regulation 20(5) and (6));

• correct references to reflect the fact there is one NHS Pension Scheme consisting of two sections (the 1995 Regulations and the 2008 Regulations) (regulation 21 and the Schedule).

The changes specific to Part 3 (amending the 2008 Regulations)—

• amend the definitions associated with the formulae used for calculating reckonable pay (regulation 25);

• regroup regulations that deal with the member and employer contributions due in respect of members who are non-GP providers (regulations 29, 32 and 33);

• provide for employing authorities to pay a contribution to cover the cost of the early payment of the mandatory retirement lump sum paid to an Optant who retires from that authority on grounds of redundancy (regulation 34);

• adjust the income used to assess the abatement of a pension on a pensioner’s re-employment to take account of the mandatory lump sum that must be taken by a 2008 Section Optant (regulations 48 and 72);

• permit the acceptance of an option to join the 2008 Regulations made by 1995 Regulations members in certain circumstances with retrospective effect from 1st October 2009 (regulations 49, 50, 73 and 74);

• corrects the drafting of certain provisions (regulations 50(d), 51 and 75).

Part 4 amends the National Health Service (Superannuation Scheme, Pension Scheme, Inquiry Benefits and Additional Voluntary Contributions) (Scotland) Amendment Regulations 2010 which contained an error (regulation 77).

Part 5 amends the Injury Benefits Regulations to insert and update definitions of practitioners (regulation 78).

Part 6 (regulation 79) amends the AVC Regulations to—

• enable AVC arrangements to take advantage of HMRC easements under the Registered Pension Schemes (Authorized Payments) Regulations 2009;

• provide that a person with AVC proceeds totalling less than £2000 who is unable to secure an annuity, will be able to take payment in the form of a lump sum;

• incorporate references to the 1995 Regulations and 2008 Regulations.

Part 7 provides that deferred members, or members in receipt of a relevant benefit, who are detrimentally affected by these Regulations may elect for the provisions not to apply to them by giving notice within six months of the coming into force of these Regulations (regulation 80).