Understanding your NHS Total Reward Statement
Dental specialist financial adviser Karen Watson-Brown discusses the NHS Total Reward Statement and how the McCloud judgement has impacted it.
What is the annual reward statement?
Every NHS pension member should have access to their Total Reward Statement (TRS) this is updated yearly and shows the benefits accrued to date in all sections the individual is a member of.
Some dentists may not have access to their TRS. This is often due to record keeping errors – they will need to contact the NHS Business Services Authority directly.
Some NHS pension members will also receive a growth input statement. This specifically relates to annual allowance (AA) growth for the relevant NHS pension schemes. It is only issued to members who have growth in excess of the standard £60,000 annual limit, or if a member has specifically requested one.
What is the McCloud judgement and how has it has impacted the annual reward statement?
The McCloud ruling, or McCloud judgement as it is also known, was a Court of Appeal decision. It stipulated that previous changes made to the NHS pension (and other public sector pensions) discriminated against younger members of the scheme. To rectify this, a seven-year remedy period was confirmed between April 2015 and March 2022. All service in the 2015 NHS pension scheme has been rolled back to the members’ original scheme (either 1995 or 2008).
Members will continue to have a choice at their individual point of retirement if they wish to have their NHS pension calculated on legacy terms (with the years rolled back) or on reformed terms (with the pension accrual remaining in the 2015 scheme).
Until August 2024 the TRS had not reflected these changes to the NHS pension. However, pension figures have now been updated for all members, but only to show legacy benefits and not the two choices all members will have. This additional information is expected sometime before April 2025.
Members will now see their service in the original, or legacy scheme, increase and the value of accrued pension in the 2015 scheme will significantly reduce to show less service, with only contributions built up since April 2022 showing on the statement.
Many dentists received their Total Reward Statement in August 2024, how does this statement differ from that of 2023?
The Total Reward Statements were issued in 2023, but this year is the first time they have been updated to show the rollback of pension benefits impacted by McCloud.
What hasn’t been issued since October 2022 is the growth statement for AA input. We are still waiting for these to be issued in October 2024, this will include the recalculation of pension growth during the remedy period. It is important to note however, that this is for England and Wales only. This hasn’t been the case for Scotland.
Do you think that dentists could benefit from specialist support when it comes to understanding their NHS pension and wider financial planning?
It’s always a good idea to speak with a dental specialist financial adviser from Wesleyan Financial Services. We have the knowledge and experience in dealing with the changes of the NHS pension scheme to help you understand your own personal circumstances.
What is right for one dentist may not be appropriate for another. An adviser will spend time with you to discuss your current situation and where you want to be in the future and help to formulate your own financial plan.
Seek support from specialists
If you are looking for support understanding your NHS pension or guidance with any of your finances, you can speak to a dental specialist financial adviser at Wesleyan Financial Services by booking a financial review here or calling 0800 316 3784.
At Wesleyan Financial Services, a team of specialists focus solely on dental professionals and their unique financial planning needs. They are there to back you on each stage of life’s journey, from graduation to post-retirement and every step in between.