McCloud Judgment and Remedy FAQs - Moving into alpha April 2022

NICS Pension Schemes - McCloud Judgment Remedy FAQs

How does this change affect me financially?

Right now, we’re waiting for the policy detail and the legislation around 2015 Remedy to be passed. We can’t tell you what (if any) financial impacts this will have on your pension for any contributions made between 1 April 2015 and 1 April 2022 until after that happens. We anticipate this will be after October 2023.

We can say that you’ll be given a choice for how you would like your benefits to be calculated for that period.

Will being in alpha mean higher contribution rates?

For most members, the contribution rates will be the same as in the legacy schemes. There are a few exceptions to this:

  • If you earn in excess of the earnings cap (currently £172,800 per year) you’ll see an increase in pension contributions. Under the legacy scheme (with the exception of Nuvos), earnings on which contributions are paid are capped to this level, whereas there is no such cap in alpha.
  • If you have in excess of 45 years of reckonable service in classic, classic plus or premium you may have ceased to pay member contributions, and will resume paying contributions when you move into alpha.

Does moving to alpha affect my annual tax liabilities?

We cannot tell you how you will be impacted at this time but your tax position will become clearer in time and there is nothing for you to do at the moment.

Does moving to alpha affect my added pension contributions?

No. Added pension contributions you are already making into a legacy scheme can continue even after you have moved to alpha.

However, you will NOT be able to:

  • Make any lump sum purchases of added pension in the legacy scheme after you move to alpha
  • Set up any new periodical contribution arrangements retrospectively in the legacy scheme

I am moving to alpha on 1 April 2022, but I am already planning to retire in 2022, what do I need to do?

There’s nothing extra you need to do and nothing relating to 2015 Remedy will prevent you from retiring as planned.

If you are retiring before 1 April 2022, your pension will be made up of benefits built up in your legacy scheme. We will contact you after October 2023 to offer you a choice between your legacy benefits and alpha benefits built up between 1 April 2015 and 1 April 2022.

If you are retiring between 1 April 2022 and 1 October 2023, your pension will be made up of benefits built up in your legacy scheme and the alpha scheme. We will contact you after October 2023 to offer you a choice between your legacy benefits and alpha benefits built up between 1 April 2015 and 1 April 2022.

I am a member of classic and I will be moving to alpha on 1 April 2022.  I do not wish to work until my State Pension Age.  If I retire and claim my classic benefits after age 60, do I need to take my alpha pension early at a reduced rate?

No.  You are under no obligation to claim your alpha pension at the same time as your legacy benefits. If you leave employment as well as alpha, and you are over your legacy Scheme Pension Age (age 60 for classic, classic plus and premium and age 65 for nuvos), you can get your legacy pension paid immediately. Your alpha pension will be preserved unless you are over the minimum pension age and you claim it early. The alpha pension will be reduced for early payment.

What are the exceptions to the final salary link from my legacy scheme?

If you have a break in service of five years or more and rejoin the alpha scheme when you return, you won’t be eligible to retain a final salary link from the legacy scheme all the way through to retirement.

Will this change be reflected on my 2022 Annual Benefit Statement (ABS)?

No. The ABS statement that you receive reflects the benefits up to 31 March in that year.

You will first see your alpha benefits in the 2023 ABS.

Are there any calculators I can use to see the impact of this change on my pension?

Our current member calculators cannot take into account changes from the 2015 Remedy. 

You can however, use the calculators to calculate your pension benefits based on the pension you have already built up in the legacy and alpha schemes.

 

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