Protection of Pay can apply:
- if you’ve suffered a reduction in pay through no fault of your own
- due to a voluntary step-down arrangement agreed with your employer
It protects the final salary benefits earned in the 1995 or 2008 Section whilst on the higher rate of pay.
Protection of Pay does not apply to benefits earned in the 2015 Scheme. If you have a final salary link to 1995 or 2008 Section benefits, these can continue to be protected.
You can apply for:
- involuntary protection of pay when the reduction is through no fault of your own. This applies to 1995 and 2008 Section membership.
- voluntary protection of pay for an agreed step-down arrangement. This applies to 1995 Section membership only
You do not need to apply for protection of pay if you’re:
- reducing your hours and not your hourly rate of pay
- a General Practitioner (GP)
Involuntary protection of pay
You must apply for protection of pay within 3 months of your pensionable pay reducing.
If your employer agrees to ‘freeze’ your higher salary for a period of time, you can apply for protection from the date this arrangement begins.
When applying for protection of pay, there’s no:
- age restriction
- minimum level of pay reduction requirement
- limit to the number of applications you can make if your pay reduces on more than one occasion
Redundancy
If you’re made redundant, you may be able to protect your pension benefits if you return to NHS employment in a lower paid job within 12 months.
You do not need to apply for protection of pay if you return to NHS employment after 12 months. This is because 1995 and 2008 Section benefits are automatically protected once you have a break in membership of 12 months.
Voluntary protection of pay
You can apply if you’ve:
- reached minimum pension age
- had a reduction to your pay of 10% or more for at least 12 months
- not suffered any other reduction in pay in the 12 months before the reduction
- chosen to step-down to a role where your new or remaining duties are less demanding and carry less responsibility than your previous duties
The employer must provide us with information that the step-down has been agreed. Where a step-down role is arranged with a different NHS employer, both employers must confirm they agreed to the step-down.
How to apply for protection of pay
You must complete a SM R9 form and send it to your employer.
You must send the form to your earlier employer if you’ve:
- had a reduction in pay between employers due to redundancy
- voluntarily stepped down between employers
We aim to provide a response within 40 working days from the receipt of your application. Your current employer will let you know if your application has been accepted.
The SM R9 form and further information is available on our website.
How is your pension calculated once protection of pay is accepted
Applied for protection of pay before joining the 2015 Scheme
If you have one period of protection when you retire, 2 pensions will be calculated:
- a pension based on your protected rate of pay plus cost of living increases for membership up to the date of protection
- a second pension for membership after that date which will be calculated on your pay at retirement
If by retirement, the protected pay plus cost of living increases is not more beneficial to you, the whole of your 1995 or 2008 Section benefits will be calculated using your pay at retirement.
Applied for protection of pay after joining the 2015 Scheme
The protected pay figure plus cost of living increases will be used for the final salary of your 1995 or 2008 Section benefits. If by retirement, this is not more beneficial to you, your 1995 or 2008 Section benefits will be calculated using your pay at retirement.