The costs of the Scheme are determined by the Government and also the Scheme Actuary who performs periodic valuations of the Scheme to determine how much needs to be paid in to provide the benefits paid out. These costs are shared between the HSC employers and the Scheme members.
As a Scheme member you pay a contribution towards your pension based upon your pensionable pay. The more you earn, the higher your contribution rate may be. Your employer pays the remainder of the pension contribution.
There are seven rates of member contribution, starting from 5% of pensionable pay for the lowest earners and this increases based on their whole time equivalent pensionable pay. The thresholds at which the rates change are linked to nationally agreed pay rates at set levels and are based on salaries equivalent to someone working full-time. If the overall cost of the Scheme increases, the amount you pay may also increase.
|Pensionable pay (whole time equivalent) paid in 2014-15||Contribution rate 2015/16|
|Up to £15,431.99||5.0%|
|£15,432 to £21,477.99||5.6%|
|£21,478 to £26,823.99||7.1%|
|£26,824 to £47,845.99||9.3%|
|£47,846 to £70,630.99||12.5%|
|£70,631 to £111,376.99||13.5%|
Contributions are taken from pay before tax so members receive tax relief on any amount they pay. Members may also pay a lower rate of National Insurance. This can reduce the actual amount that they pay to between approximately 4.0% and 8.70% depending on their contribution rate, earnings level and personal rate of tax. You will find factsheets on the links below for the Scheme years 2015/2016 through to 2018/2019 and previous years. A Scheme year starts on 1 April and ends on 31 March.
The rules in respect of tiered contributions apply to members of both the 1995 and 2008 Sections of the HSC Pension Scheme and also the new 2015 HSC Pension Scheme.
Your employer contributes an amount equal to 16.3% of your pensionable pay.
For more information regarding cost and contributions click on the relevant link below: