Southdown 2026 - Blog , Uncategorized

NHS Pensioners & the McCloud Remedy

Tue, 21 Jul 2026 13:41:33 +0000

The latest dates for Remedial Service Statements

NHS Pensions has confirmed two separate timelines based on the different circumstances of retired members.

These timelines reflect how pension benefits are currently being treated under the Remedy:

Timeline 1: Members Receiving 2015 Scheme Benefits

Expected receipt of RSS statement: End of December 2027

This applies to members who:

● Are currently receiving 2015 Scheme benefits (for all or part of the remedy period), OR

● Retired before 1 October 2023 and built up pension in the 2015 Scheme during the remedy period

This group includes most members whose benefits are likely to change due to the remedy. Their RSS will show them whether switching to 1995/2008 scheme benefits would be advantageous.

Timeline 2: Members Already Receiving 1995/2008 Scheme Benefits

Expected receipt of RSS statement: End of June 2030

This applies to members who:

● Had their pension returned to the 1995/2008 Scheme on 1 October 2023 (for these members, discrimination has already been addressed), OR

● Moved to the 2015 Scheme on 1 April 2022 or retired before doing so

Members in this category will often see little or no change to their current benefits, though individual outcomes vary. They will still receive an RSS with the option to switch to 2015 Scheme benefits if they choose.

The Uncertainty Continues

McCloud has created significant problems for divorcing couples and those involved in pensions on divorce work and the uncertainty continues for NHS Retired Members who are affected by the Remedy. Until an affected member receives their RSS, the true value of their pension is unknown.

If the parties are considering pension sharing as a means of settlement, they should note that where a CEV statement for a retired member has been issued before the RSS has been issued and an election made, the CEV could alter once an election has been made (particularly if the alternative option is chosen), which would then impact on the pension credit awarded to the ex-spouse.

We understand that NHS Pensions will not hold up pension sharing implementation, but if the member makes a different remedy choice post-divorce than that assumed at the time the CEV is prepared for pension sharing purposes, they will retrospectively adjust the benefits for the pension credit member and the original scheme member once the remedy choice has been made.

The issue here is that it could mean that the percentage share in the Annex is calculated based on terms different to what the member may choose shortly after the divorce has been finalised, the eventual outcome for each party may differ to what was agreed.

A practical step to consider in any financial settlement involving a retired NHS member who hasn't received their RSS is to flag this as early as possible in financial settlement discussions and to consider what if any flexibility can practically be built into negotiations and settlements.

PPF and FAS Members Set to Benefit from The Pension Schemes Act

Fri, 12 Jun 2026 07:54:59 +0000

Recent changes introduced through the new legislation are set to enhance benefits for many members of the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS), while also helping to reduce costs for levy payers.

The changes represent a significant step forward, strengthening member outcomes and providing greater flexibility for schemes with surplus assets.

One of the most important changes introduced by the Act concerns inflation increases on pension benefits earned before 1997.

Historically, pensions in payment relating to pre-1997 service did not receive inflationary increases through the PPF, even where the original occupational pension scheme provided such protection. Under the new legislation, the PPF will now be able to apply future inflation increases of up to 2.5% per annum to these benefits where the original scheme rules included inflation protection.

Broadly, two groups of members are expected to benefit.

1. Members Whose Original Scheme Rules Included Pre-1997 Indexation

Many occupational pension schemes provided inflation increases on pension benefits earned before 1997. Where these increases were required under the original scheme rules, members will, in most cases, begin to receive annual increases of up to 2.5% on all of their pre-1997 benefits through the PPF or FAS.

The PPF estimates that this change will benefit approximately:

180,000 current PPF members, and
85,000 current FAS members.

For many pensioners, this represents a valuable enhancement to their retirement income and provides additional protection against the effects of inflation.

2. Members with Post-1988 Guaranteed Minimum Pension (GMP) Indexation Only

Some schemes provided inflation increases only on Guaranteed Minimum Pension (GMP) benefits accrued between 6 April 1988 and 5 April 1997, with no increases applying to other pre-1997 pension rights.

Guaranteed Minimum Pension is the minimum level of pension that contracted-out occupational schemes were required to provide. Under the new legislation, members of these schemes will generally become entitled to inflation increases on the relevant post-1988 GMP element of their pension through the PPF or FAS.

The PPF expects this change to affect approximately:

39,000 current PPF members, and
27,000 current FAS members.

How Can Members Check Whether Their Scheme Is Eligible?

The PPF has published a list of schemes whose members may qualify for these additional increases. Members who believe they may be affected should consult the list or await further communication from the PPF or FAS, which expects to begin writing to affected members during the summer.

A list of all eligible schemes can be found here: https://www.ppf.co.uk/our-members/pre97-schemes

How will this impact on PODE Reports ?

Where a PPF member belongs to a scheme that is eligible we will factor into our calculations these changes

Implementation Already Underway

Work to implement the new measures has already begun, and the PPF has confirmed that it intends to start writing to affected members during the summer. Members who may benefit from the changes can therefore expect further communication in the coming months.

These reforms represent a welcome development for many pensioners, delivering improved benefits and ensuring that members receive protection more closely aligned with the promises made under their original pension schemes.

Changes to Public Sector Scheme CEV Calculations

Wed, 27 May 2026 09:10:55 +0000

The Background

The Government announced on 19 May 2026 that the discount rate that public sector schemes use to calculate Cash Equivalent Values (CEVs), and by extension pension credit benefits, has increased. This means that the actuarial factors prepared by the Government Actuary Department (GAD) and used by PODEs such as ourselves, are subject to change. The GAD has currently suspended calculation of all CEVs for pensions on divorce, and the new factors will follow in due course.

What is the expected impact ?

Broadly, the change means that CEVs calculated for pension on divorce will reduce.

The reduction will vary by a number of factors, but in simplified terms could lead to reductions of up to around c4%for members at or very close to retirement age and c10% for members within20 years of retirement (and broadly something in between for members somewhere between 0 and 20 years from retirement).

Implications if the member spouse has any public sector pensions

The change means that, for any pension share that is due to be implemented after the new factors come into force, the CEV(s) used for implementation will be lower (by broadly the amounts discussed above) compared to those calculated using the ‘old’ factors (i.e. those in force prior to the announcement yesterday) – all other things being the same.

However, it is worth noting that as most¹ public sector schemes only permit internal pension sharing, then the change will also impact the factors used to calculate pension credit benefits in broadly the opposing direction for internal shares.

This means that for an internal pension share, overall, a lower CEV may still give rise to a similar level of pension credit and therefore the calculated pension share(s) are likely to be similar to if recalculated on the new factors.

But…the position is a little more nuanced

However, there will be cases where this does not hold true, most notably where:

There is a material age gap between the parties, as the CEV factor depends on the member spouse’s age and the pension credit factor depends on the ex-spouse's age, and these will not always move by the same amount.

There is a material gap between the age when the member spouse’s pension beneﬁts come into payment and the age when the ex-spouse’s pension credit beneﬁts come into payment (most typically this will be in the uniformed schemes).
The share is calculated assuming an external transfer in certain LGPS² cases. In such cases the ex-spouse receives a share of a lower CEV (compared to the same CEV calculated on the old factors). The change is also likely to make external implementation of pension credits arising from the LGPS slightly less beneﬁcial.
The interaction with the McCloud remedy and the new factors gives rise to additional complexities and considerations (in practice likely to be rare edge cases).

It’s worth noting that in practice, a change in figures arising from any of the above, may still not be material in the overall context of pension sharing outcomes. However, we raise these as additional points to consider when discussing with your clients.

Is that everything ?

The change is likely to impact other factors, such as those used to adjust benefits paid early or late, but is generally anticipated to have a more modest impact on overall results. The true impact, however, will only be known with the benefit of the updated factors.

Implications if the ex-spouse only has public sector pensions which are not being shared

While the change would reduce the CEV calculated in respect of public sector benefits, the change does not directly impact the actual income (and/or lump sum), and so is not expected to have a material impact on outcomes (whether we are assessing income or capital).

What should you do for ongoing cases ?

Largely business as usual, as in many cases the change is likely to be broadly neutral on the calculated pension sharing outcomes.

However, it is worth taking into account the cases described above where this may not be the case.

1 The Local Government Pension Scheme is the exception as it offers the choice between an internal pension credit and an external transfer as well.

2 Depending on facts and circumstances of each case, as it may be more beneficial to both parties to implement an internal share, in which case similar arguments discussed for other public sector schemes