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We work hard to avoid using jargon in all our communications with you but some terms are unavoidable. These are explained here or you can download a printable version from the link in Related documents.

We’ve included some terms which we try not to use but you will often see in communications about pensions in general.

If there are any terms you don’t understand but which aren’t explained here, please let us know using the Contact us tab.

2008 Section Choice Exercise

Some members of the 2008 section within the protection period may be better off switching to the NHS 2015 scheme on 1st April 2105, depending on their career and retirement plans. For this reason, protected members of the 2008 section will be given a choice to opt out of protection.

Members who qualify for this choice will be contacted by SPPA directly with more information in due course.

95 Section Choice Exercise

This will be a second opportunity to choose to transfer your service in the 1995 section, earned up to 31 March 2008, to the 2008 section.  This exercise will be run in Scotland sometime after April 2015 and will only affect a small number of people. Members affected will be written to directly with more information in due course. To qualify, members will have to have been eligible for the previous Choice Exercise and not have full protection. 

Accrual rate

This is the proportion of earnings which count for pension each year. In other words how much pension you earn in any one year. For example the accrual rate in the NHS 2015 scheme is 1/54th of pensionable earnings each year. 

Active member

You are an active member if you are paying into the scheme.

Actuarially reduced

This is a reduction in your pension if you take it before normal pension age to take account of the fact that it is paid for longer.    

Additional contributions

This is a facility for  members to pay extra contributions to buy additional annual pension, or in order to buy out some of the actuarial reduction (described above) if you retire at age 65 in the NHS 2015 scheme. 

CARE

Career Average Revalued Earnings is a type of defined benefit pension scheme. A defined benefit scheme guarantees a certain level of benefit at retirement, according to a fixed formula. In this respect it is similar to the current final salary sections of the NHS Pension Scheme.

In a CARE scheme your pension is based on your pensionable pay right across your career. The pension you earn each year is based on pensionable pay in that year and is increased by a set revaluation rate, linked to inflation, for each year up to retirement or leaving. The final pension is calculated by adding together the pension earned in each year of membership. 

Commutation

This is an option to exchange some of your pension for a lump sum (which is currently tax free). You currently receive £12 of lump sum for every £1 of annual pension you give up. There is a maximum amount of tax free lump sum HMRC will allow you to take.