Cash on tap
As of March 31 2022, the pension liabilities of the scheme were valued at £869.9bn – an increase of £112.8bn from the previous year.
The scheme also recorded a net cash requirement of minus £4.35bn against the estimate of minus £3.8bn, resulting in the scheme having surplus cash due to income exceeding pension benefit payments.
As the NHS Pension Scheme is an unfunded scheme, the liabilities are underwritten by the exchequer, but the excess £4.35bn cash will be returned to the Treasury during 2022-23.
The annual accounts also show the NHS Business Services Authority has fallen short in delivering annual benefit statements to all members, both active and deferred.
In August 2012, 91.77 per cent of scheme members were provided with an annual benefit statement, and while the scheme is “committed to its long-standing aspiration” of delivering a statement to all members, the latest finding marks only a 0.2 per cent increase on the previous year.
The report states: “The NHS Pension Scheme is the largest centrally administered Pension Scheme in Europe with over 2.3mn active or deferred members and some of the most complicated working patterns and calculations in the pensions industry.
“The complex nature of the Scheme means that it is unlikely that 100 per cent full automation of ABS calculations will be possible.”
Early retirement rise
Elsewhere, the NHS Pensions Scheme’s report revealed the number of active members within the scheme to be 1,0749,681 – a figure that was roughly in line with the prior year. Yet the number of leavers with deferred pension rights has risen sharply to 184,861, up from 139,987 in the 2020-21 report.
The finding follows a tumultuous period for members leaving the NHS Pension Scheme on the back of tax relief reforms leading to some doctors opting to reduce hours or retire early should the government push through with its plans to freeze the pensions lifetime allowance beyond 2026.
Under present plans, the allowance will cap the amount that can be saved into a pension, with contributions over £1,073,100 being eligible for a 55 per cent tax rate for lump sum withdrawals.
Difficulty around pension rules and pay erosion has resulted in almost half of consultants considering leaving or taking a break from the NHS, the British Medical Association said.
BMA consultants committee chair Dr Vishal Sharma said earlier in November that the current proposals “will not only leave our most senior doctors with little option but to retire early, it will also leave many senior nurses and other NHS workers facing the same situation”.
“We know the proportion of GPs retiring early has increased more than threefold since 2008, closely following the real-terms reduction in the lifetime allowance,” he added.
The findings from the latest NHS Pensions Scheme accounts corroborate the trend of members opting to retire early.
