All members moved to the 2015 CARE scheme and final salary closed to accrual

The final salary sections of the NHS Pension Scheme (Scotland) closed to further accrual from 1 April 2022, and all members moved into the 2015 Career Average Revalued Earnings (CARE) scheme for future service from that point¹. The Scottish Public Pensions Agency (SPPA), an executive agency of the Scottish Government, set out the change in a consultation published in 2023, describing it as part of the McCloud remedy¹.

Under the 2015 CARE scheme, member pensions are increased by a percentage of salary for each year worked, rather than being based on final salary at retirement¹. The SPPA said the change "ensures that the costs and benefits of the scheme are more evenly shared"¹.

The 2015 scheme itself was introduced from 1 April 2015, following the Independent Public Service Pensions Commission chaired by Lord Hutton, which recommended a career average earnings model as the core public service pension scheme¹. The SPPA document states that the 1995 and 2008 sections of the scheme used a final salary accrual method¹.

The same consultation set out separate proposals on member contribution rates, which are not part of the 1 April 2022 change. It proposed replacing the existing contribution table with two new tables to assess members' contribution rates from 1 October 2023, with a first phase from October 2023 and a second phase from October 2024¹. The consultation ran for twelve weeks from Tuesday 23 May to Tuesday 15 August 2023¹. An initial consultation ran between 24 January 2022 and 27 February 2022¹.

The document also records that employers contribute 20.9% of each member's pensionable pay towards the cost of scheme benefits, and that members are required collectively to contribute 9.8% across the whole scheme membership, known as the member contribution yield¹. It states the yield rose from 6.6% to 9.8%, phased in over the three years from 2012/2013 to 2014/2015, and that over the last three years the yield continued to drop from 9.6% to around 9.3%¹.

Why it matters for households

For members of the NHS Pension Scheme (Scotland), pension built up in the 1995 and 2008 final salary sections stopped accruing from 1 April 2022. Service from that date builds pension in the 2015 CARE scheme, where each year's pension is a percentage of that year's salary and is revalued, rather than being calculated on final pay at retirement¹. The change affects future service only; the SPPA document does not state that pension already built up in the earlier sections was altered.

The consultation document also notes that the draft amending regulations would allow members who take their benefits in the 1995 Section to return to work and build further pension in the 2015 Scheme, and would permanently remove the 16-hour rule¹. It states that abatement for Special Class Status holders in the 1995 Section would remain suspended until 31 March 2025¹.

The contribution figures in the document are proposals and historical rates, not rates in force for all members. The 2015-16 structure ran from 5.2% for pay up to £15,828 to 14.7% for pay above £111,377¹. The proposed tables set out rates including 5.2% up to £21,614, 5.8% from £21,615 to £25,981, 7.3% from £25,982 to £32,914, 9.5% from £32,915 to £66,017, 12.7% from £66,018 to £92,423, 13.7% from £92,424 to £123,147 and 14.7% at £123,148 and above¹.

What happens next

The consultation on member contributions closed on Tuesday 15 August 2023¹. The document states that the proposed contribution changes would be implemented from 1 October 2023, in two phases, the first from October 2023 and the second from October 2024¹. It also states that changes to the final pay control rules would be effective from 1 April 2023, given effect retrospectively from that date¹. The document does not report the outcome of the 2023 consultation.