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Re-assessing tiered contribution rates

The general basic rule is that a contribution tier for existing Officers Scheme members is set using the previous years’ pensionable earnings or whole time equivalent for members working part time. This is unless there has been, or there is, a change in circumstances including any pay increase. Where this occurs employers are required to carry out a reassessment and apply the correct contribution rate. It is important to note that where a pay rise is mid-year any increase in tiered contributions must be assessed at the point the pay rise occurs. This cannot be done retrospectively at the end of the year.

This means that following the implementation of the pay awards for staff on Agenda for Change, employers will need to arrange for regular re-banding exercise’s to take place. This ensures each member is paying the correct amount of contributions from the date in which the pay increased. Please note this pay award does not affect those staff that are not covered by Agenda of Change .i.e. practice staff, Independent Providers staff, Direction body staff, General Practitioners & Non-GP Partners.

The cost of living increase and pay increase may happen on a different date dependant on the members pay step (increment) date. This means that organisations will have to identify members affected by this on a monthly basis and re-asses their pension contributions and bandings to reflect this where appropriate.

For more information regarding tiered contributions please refer to our factsheet. Further guidance regarding the pay award changes can be found on the NHS Employers website.