Section 2: Eligibility – HSC Pension Service

Qualifying Membership
Reckonable Membership
Contributing Membership
Non Contributing Membership
Whole Time Membership
Part Time Membership

2.1 Eligibility

Employers have a statutory responsibility to inform employees about scheme benefits. If employers are approached by employees who appear to be seeking financial advice on the various options open to them, they should be informed that neither the employer nor HSC Pension Service is empowered to give such advice, but that they may contact an Independent Financial Advisor (IFA) who is registered to give financial advice.

Each eligible person on commencement of HSC employment shall be included in the scheme automatically, unless they have made an election not to join.

Members may choose to ‘Opt Out’ of the scheme at any time in order to make alternative pension provision. They do this by completing a SD502 form, available from our website.

If employees decide not to participate in the scheme, but later change their mind, they may apply to join the scheme

Each eligible member must decide whether to remain in the scheme or not. To ensure employees make an informed decision, it is the employer’s responsibility and legal obligation to ensure that all employees receive a copy of the HSC Pension Scheme Guide which is available from the Scheme Website.

HSC employees aged between 16 and 75 (65 in the case of members of the special classes/Mental Health Officer (MHO) whether employed full time or part time are eligible to join the scheme. Exceptions are:

individuals who hold only an honorary HSC appointment.
re-employed HSC pensioners (with the exception of those who retired on ill-health (upper) and who have returned to HSC employment before reaching age 50).
employees who are absent from work for any reason.

1995 Section – A person may not join the 1995 section of the scheme if they are:

under the age of 16, over the age of 75 (other than members who are aged 70 on or before 31 March 2008 who are receiving their HSC Scheme benefits).
employees commencing HSC employment for the first time on/after 1 April 2008.
former employees who have returned to HSC employment and who did not have enough service to qualify for benefits when they left (under two years) and have received, or are only entitled to a refund for their earlier service.
members who leave the 1995 section on or after 1 April 2008 and subsequently transfer their benefits to another scheme.
those who were previously in the 1995 section and since 1st October 2008 have returned after a gap of more than 5 years since they were last in HSC pensionable employment including previous membership that qualified a member for a benefit from another Health Service Scheme.

2008 Section – A person may not join the 2008 section of the scheme if they are:

under the age of 16, over the age of 75 (other than members who are aged 70 on or before 31 March 2008 who are receiving their HSC Scheme benefits).
employees commencing HSC employment before 1 April 2008 and do not subsequently transfer to the 2008 section under the Choice arrangements.
those that were previously in the 1995 section and since 1 October 2008 have returned after a gap of less than 5 years since they were last in HSC pensionable employment including previous membership that qualified a member for a benefit from another Health Service Scheme.

2.2 Age and Membership Limits

A person may not join the scheme if they are under the age of 16, over the age of 75 (other than members who are aged 70 on or before 31 March 2008 who are receiving their HSC benefits).

Members will receive a pension at age 75 if they are still in HSC employment and have not claimed scheme benefits before then.

Please note that employees up to the age of 75 who have not previously been members of the scheme were able to join the scheme from 1 April 2008 as a result of the reform changes.

Maximum Membership and Age Restrictions – 1995 section

This applies when a member has service in the 1995 section prior to 1 April 2008.

Members were restricted to 40 years pensionable membership at age 60 (age 55 for Special Classes and Mental Health Officers) and 45 years overall in respect of pensionable service accrued prior to 1 April 2008. The age 60 restriction was lifted from 1 April 2008 and members are limited to 45 years pensionable membership in total. Therefore, members who were unable to accrue more service as they had reached their limits under the 1995 section, would be eligible to accrue more service from 1 April 2008 up to 45 years (Special Classes and Mental Health Officers must be over age 55).

If a member continues in pensionable employment contributions must be paid until the member reaches age 70, or completes 45 years pensionable membership and reaches age 65.

Mental Health Officer (MHO) and Special Class (SC)

Members are restricted to 40 years pensionable membership at age 55. When the maximum 45 years pensionable membership is reached before age 60 a member must continue to pay contributions until age 60 unless they opt out of the scheme or claim their pension benefits.

Where maximum 45 years pensionable membership is reached after age 60 but before age 65 a member must cease paying contributions when the 45 years membership is achieved. Pension benefits are not payable until the member leaves HSC employment.

Members must cease to pay contributions at age 65 regardless of the amount of pensionable membership they have achieved.

Maximum Membership and Age Restrictions – 2008 Section

This applies where the member joined the scheme for the first time on or after 1 April 2008 and those who took the option to transfer to the 2008 section.

Members can accrue 45 years pensionable membership in total. If a member achieves 45 years pensionable membership and continues in HSC employment they can, if they wish, continue to pay contributions into the scheme.

Although they cannot exceed the maximum 45 years of membership, when the member comes to retire, they can choose to select the excess years “pensionable pay”, to be taken into account when determining the 3 best consecutive years pensionable pay in the last 10 years.

To be eligible for this provision the member must apply in writing giving notice of an intention to remain in pensionable employment beyond 45 years. HSC Pension Service should receive that notice not earlier than 3 months before the member reaches the 45 year limit. Members will be notified of their total accrued service in the Annual Benefit Statement. It is at this point that HSC Pension Service can identify members who are approaching 45 years’ service and will notify employers accordingly.

Contributions must be paid until the member reaches age 75, opts out or claims his pension. Pension benefits will be calculated using the most beneficial 45 years.

Maximum Membership and Age Restrictions – 2015 Section

There is no maximum membership restriction in the 2015 scheme.

Contributions must be paid until the member reaches age 75, opts out or claims his pension.

2.3 What is Membership?

Membership is the length of time a member has contributed to the scheme. It is used in the calculation of benefits and for determining eligibility to certain allowances. In order to qualify for certain scheme benefits members have to accrue a certain amount of membership.

All whole time contributing membership counts at full calendar length towards qualifying and reckonable membership.

All contributing part time membership counts at full calendar length towards qualifying membership but is converted to the whole time equivalent for reckonable membership.

2.4 Types of Membership

There are four types of membership:

Qualifying;
Reckonable;
Contributing;
Non-contributing.

The four types of membership also incorporate:

Whole Time Membership; and
Part Time Membership;
Dependent upon the employee’s contracted hours at the time of contributing to the scheme.

Qualifying membership

Qualifying membership is membership that counts towards determining eligibility to benefits, but is NOT always reckonable in the calculation of those benefits.

The following are taken as qualifying service:

All contributing membership (still reckonable for benefit purposes)
Part time pensionable service i.e. the calendar length of time rather than the service actually worked.
Refunded service since 6.4.75 – if a member leaves the scheme and takes a refund, then re-joins within one month of leaving, the refunded service counts as qualifying service regardless of whether or not the member has repaid the refund.
Transferred in service –the actual membership in a former scheme when a member transfers those benefits to the HSC Pension Scheme. NB: in some cases the service credit given may not be on a day for day basis.
All non-contributing membership.

It should be noted that all reckonable membership is qualifying membership but not all qualifying membership is reckonable.

The following does NOT count as Qualifying Membership:

if a member has an additional service contract the service being bought cannot be used to determine their qualifying service.

Reckonable membership

Reckonable membership is membership that counts both for deciding entitlement to benefits, and for calculating them. Type of membership that counts for reckonable purposes include:

any period of pensionable employment in respect of which the member pays contributions to the scheme.
any period of additional service that the member has purchased.
any period of service credited to the member as part of a transfer.
non-contributing membership usually counts at half-length towards reckonable membership.

Types of membership which do NOT count for reckonable purposes include:

any period of employment in respect of which HSC Pension Service has paid contributions to another occupational scheme (transferred out service).
any period of service that has been used in the calculation of previous benefits.
any period where the employee has opted out of the scheme.
any period where scheme has discharged liability (e.g. refunds).
any period of unauthorised unpaid leave where contributions are not payable, including strike days.

General points for Qualifying and Reckonable Service:

if a member leaves pensionable employment or dies and has leave entitlement that has not been taken – the member’s employment will be treated as qualifying and reckonable service for a period equal to the leave not taken and the payment will be treated as pensionable pay for that period.
in some cases the employer may decide not to terminate the member’s employment due to non-contributions and limits on sick pay. If this is the case the member should pay contributions accordingly. This in turn will mean that the member will still be entitled to apply for ill health or death in service benefits.

Contributing Membership

This is membership during which contributions have been paid and counts towards both qualifying and reckonable membership.

Membership still counts as contributing even when a member is on paid sick leave, paid maternity/paternity leave or any type of authorised unpaid leave where contributions are still payable

e.g. unpaid maternity leave, unpaid career break (only where contributions are paid). The member may be on reduced pay due to sick leave but the employer will continue to pay contributions for the full rate of pensionable pay. This is called ‘deemed pensionable pay’ and should be used for the calculation of pensionable pay.

Non-Contributing Membership

This is membership during which no contributions were paid. Types of non-contributing membership include:

the 2 year waiting period which was served by people who were employed in Ancillary, Maintenance/Building and Dental Surgery Assistant This two year waiting period is counted at full length for qualifying membership and at half-length for reckonable membership. The two year waiting period was abolished from 6 April 1988. Anyone who was already serving a 2 year waiting period on that date was automatically made pensionable in the scheme (unless they opted out) and any part of the waiting period already served reckons at half its length.
any period of unpaid sick leave.
any period of authorised unpaid leave where contributions are not yet recovered e.g. unpaid maternity leave.
any period of unauthorised unpaid leave where contributions are not payable, including strike days.

Whole-Time Membership

A member is employed whole-time if their contract of employment is on a whole-time basis, i.e. they work the number of whole time conditioned hours recognised in their particular job (sometimes also referred to as ‘full-time’).

All whole-time contributing membership counts at full calendar length towards qualifying and reckonable membership.

Part-Time Membership

A member is considered part-time in the scheme if he / she work less than the whole time conditioned hours for their job.

Benefits are based on the actual part time service but membership is based on the calendar length the service was accrued.

A part – time member can work in concurrent employments and accrue qualifying and reckonable service up to the whole time conditioned hours for the job. They would be capped on the whole time conditioned hours if combined hours are in excess of this.

Benefits in the 2015 scheme are calculated using a proportion of the members pensionable pay however the rules regarding qualifying membership for benefits still applies as are in the 1995/2008 sections of the scheme.

Historical

Prior to 31 March 1973 part – time employees were not eligible to join the HSC Pension Scheme.

From 1 April 1973 part – time employees could elect to join the scheme providing they were employed for at least half the standard hours for their grade.

From 1 April 1991 the regulations were changed further to allow for part-time staff to elect to join the scheme irrespective of the number of hours they worked. In the 1997 amendment regulations part-time staff were given the same right to automatic scheme membership as full time staff. However, this legislation was not retrospective so it only applied to staff whose employment commenced on or after 1 September 1997.

This means that prior to this date, part- time staff, who were already in HSC employment but not scheme members, were not automatically taken into the scheme but had to elect to join.

Legal Background

On 8 February 2001 the House of Lords announced its decision in relation to the rights of part-time staff to participate in occupational pension schemes. This is commonly known as “Preston Cases”. They ruled that part-time staff may retrospectively gain membership of occupational schemes back to 8 April 1976, subject to the payment of pension contributions in respect of the period for which membership was claimed. However, for a claim to have been considered, it must have been submitted to an Employment Tribunal within 6 months of a member leaving their employment.

Calculation of part-time service

A member’s pensionable service in part time employment will not count at its full calendar length but will be calculated using calculation a) or b) whichever is applicable:

a) If the member’s part–time employment is expressed in half days or sessions

Half Days/Sessions ÷ Number of days/sessions in week x 365**

b) If above does not apply and the pensionable service is measured in hours

Number hours per week ÷ Whole time conditioned hours x 365**

The above is sometimes referred to as the part-time fraction e.g. 18.75 / 37.5 would be a member working half of the whole time hours.

**Or whole time days in period to be calculated

Additional Hours Worked for Part-Time Members

A part-time member who works hours in addition to their normal working week will be pensionable on the extra hours worked up to whole-time conditioned hours.

Formula used to calculate this is:

Total Number of Hours, including additional part-time hours per week ÷ Number of whole time conditioned hours for the year x 365**

The table below shows the maximum number of hours that can be worked in a full year.

Standard Weekly Hours	Maximum Hours (in a full year)
33	1,721
35	1,825
36	1,977
36.5	1,903
37	1,929
37.5	1,955
38	1,981
38.5	2,008
39	2,034
40	2,086

Concurrent Part Time Employments

Part time members may contribute to more than 1 employment, but the total membership must not exceed 365 calendar days in each year.

2.5. Bank Workers

Membership for all Bank workers and all term-time staff is recorded in the same way as for part-time staff. The date of commencement should be the date the member joined the bank and the contract should be shown as a proportion of the standard whole-time hours i.e. 00.25 standard hours.

Employers are reminded that under the scheme regulations pension records for short term appointments such as Bank Nurses may remain open for short breaks in pensionable employment up to, but not more than 3 months from the date on which they last paid contributions.

During this period the member will continue membership in qualifying not pensionable terms. Where the period of a break exceeds 3 months, pensionable contracts should be closed and leaver information submitted to HSC Pension Service.

Should a period of over 3 months occur since the last day of actual employment, or the member is removed from the books or opts out of the scheme, the employment should be closed down on the last day worked.

2.6 Term Workers

Employees whose contracts are affected by school holidays or who hold annualised hours contracts are known as Term Time Workers.

Term Time workers, for service accrual and scheme benefit purposes, are treated in the same manner as part time members.