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Reduction or forfeiture of NHS Pension Scheme benefits and using the ‘02’ exit code

The NHS Pension Scheme Regulations allow for NHS pension benefits to be reduced or forfeited under certain circumstances. 

Reduction of NHS pension benefits

Employing Authorities should make NHS Pensions aware of any legal proceedings in respect of a loss to public funds as a result of a Scheme member’s criminal, negligent or fraudulent act or omission.   

Where there is a loss to public funds as a result of a Scheme member's criminal, negligent, fraudulent act or omission their NHS pension benefits may be reduced to recover the loss. Where an Employing Authority has suffered a financial loss, NHS Pensions may reimburse them directly by offsetting the member’s NHS pension benefits once these have been claimed. Please note that the loss to public funds does not include any investigation or legal costs incurred by the employer.

When contacting NHS Pensions, Employing Authorities should provide as much information as possible including:

  • The amount of loss to public funds and whether any of the loss has been or is to be repaid by other means.
  • Details of how the loss to public funds has occurred.
  • Copies of the Certificate of Conviction if applicable.
  • If the amount of the loss to public funds is disputed, a copy of the Court Order enforcing the member’s obligation to repay the loss.
  • Where the amount of loss to public funds is not disputed by the member, NHS Pensions will require the member’s consent to offset benefits in order to recover the loss  

Correspondence should be sent to Julie Edwards, Audit and Fraud Prevention Manager at NHS Pensions preferably by recorded delivery.


Where an active or deferred Scheme member has been convicted of any of the following offences some or all of their NHS pension benefits may be forfeited:

  • An offence in connection with employment which is certified by the Secretary of State either to have been gravely injurious to the State or to be liable to lead to serious loss of confidence in the public service.
  • An offence of treason.
  • One or more offences under the Official Secrets Acts 1911 to 1989 for which the member has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years.

Survivor and/or dependants benefits may be subject to forfeiture if the survivor or dependant has been convicted of the murder, manslaughter, or unlawful killing of the member.  

Any correspondence should be sent to the Technical Consultancy Team at NHS Pensions preferably by recorded delivery.

02 exit code

Exit code 02 should only be used on a member’s pensionable employment record if the Employing Authority is recommending the recovery from pension benefits of a loss to public funds or a forfeit of pension benefits for a serious offence.

Where NHS Pensions receives leaver information from an Employing Authority with a potential  termination/exit code 02, form SM219 will be issued in order to confirm the exit code. Employing Authorities with access to Pensions Online (POL), will receive an automated POL notification.

Once an 02 exit code is confirmed, NHS Pensions will review all the information and contact the Employing Authority accordingly.