Understanding your Total Reward Statement (TRS)

You have probably heard about your NHS Total Reward Statement (TRS), but are you unsure what it actually represents? You won’t be alone if you don’t understand all the figures on your TRS and what they mean or why your financial summary seems to display little relationship to your income.

For a majority of our NHS pension scheme members, your Total Rewards Statement is available to view annually from August each year, accessible via your Trust’s Electronic Staff Record Programme (ESR) or from the TRS website. Your TRS is unique, so do take the time to understand what this statement is telling you.  

In this article, we will decipher the Total Reward Statement and provide you with all the tools so you can accurately read the results. If you still need help, we do offer a personalised translation if you prefer, so do get in touch.

Personal details & financial summary

This section is self-explanatory but still worth checking. The page starts with your personal details, followed by a financial summary of your income to show how your income is made up for the year, and is based on the previous tax year. If any information detailed in the financial summary is incorrect, it may be that the NHS Pensions Agency does not have your most up-to-date information. If this is the case, please investigate this thoroughly, as it could potentially impact your NHS pension at retirement. It’s considerably easier to correct errors in data each year than when you are trying to retire and need to tackle it. 

GP partners may see older figures due to the lag in time for preparing and submitting accounts.

Annual benefit statement

This section will concern your pension scheme, and if you have been a member of multiple pension schemes, these will be separated in the ‘Annual Benefit’ section of the TRS.

A couple of things here to look out for to ensure that the NHS Pensions Agency have the correct information for you: 

1) Ensure that the date you joined the scheme is correct along with your pay. Your pay will not necessarily correspond with your payslips, as the Total Reward Statement could be showing the previous tax year’s income. The pay should be reflective of all your superannuated income.

If you hold multiple posts, errors can also occur if the details of each post are relayed to the NHS pension scheme at different times of the year, as sometimes the most recent pay details ‘overwrite’ the previous, even if it is for a different but continuing role. 

2) The “Updated To” section will typically be a date in the past for the 1995 and 2008 schemes, as this will show the date you joined the 2015 NHS pension scheme.

When looking at the 2015 pension scheme details, the “Updated To” date should correspond to the last tax year the information is correct to, so if you are looking at a new TRS after August 2023, it should be correct to 31st March 2023.

Standard benefits

This section will show what your pension is estimated to be if you were to retire now. It is worth noting that in the case of hospital doctors, the figures will not take into account pay progression, so although it reflects pension now, it is not an accurate reflection of where your pension will be in the future. This is particularly true for those with benefits in the 1995 and 2008 sections of the NHSPS.

Pension

This is the amount you would be due annually if you were to retire at the normal pension age for the scheme. Remember this is different for the 1995 (Age 60), 2008 (Age 65) and 2015 (State Retirement Age) schemes.

Lump sum

The amount you can withdraw from your pension as a one-off lump sum at the normal retirement age. 

The NHS pension schemes will allow you to sacrifice your pension income in return for a maximum lump sum. Further down this page, you will see “benefits if you take the maximum lump sum” section. This section details the impact on your NHS pension income at retirement if you take a lump sum at your normal retirement age. You can choose to take a lump sum between what the pension is worth pre-lump sum and taking the maximum. 

Adult dependent pension

This section shows the amount a partner or dependent will receive annually if a scheme member (you) were to die. As a member, you need to be actively contributing to the NHS pension at the time of death. The figure is only an estimate as there could be a few variables before an exact figure can be calculated. Children may also be eligible for a children’s pension, which they could receive up to their 23rd birthday.

Remember, if you are not married or in a civil partnership but are in a relationship with financial interdependence, then you can nominate your partner to receive this pension.  You need to fill out an  NHS PN1 Form >. If you have no documentation, then there is no eligibility!

Reckonable membership

Reckonable membership is the one that you need to pay attention to. This is used to calculate the pension benefits you will receive at retirement. If any of your service is missing on this tally, it will have a direct effect on your benefits in retirement, so do check it carefully each year.

Hypothetical annuity cost

This is a rough estimate of how much a comparable pension would cost if bought privately and annuitised instead of through the NHS pension scheme. It has little bearing on anything apart from showing you the value of what you have compared to those people outside of the NHS whose pension pot is directly linked to the contributions they will have made. It is a common misconception that this is the lifetime allowance value, which it is not.  At the time of writing the Lifetime Allowance is looking to be abolished. 

Death benefits & nominations

This section shows the amount of aid a dependent would receive in the event of the holder’s death. By default, this would be a spouse or civil partner. You can nominate your beneficiary by completing this simple form: NHS Pensions – Lump sum on death benefit nomination (DB2)

If you want your spouse or registered civil partner to receive 100% of your lump sum on death benefits you do not need to complete this form, as they will receive it automatically unless you have previously nominated someone else to receive it. If you die without completing this form and you do not have a spouse or registered partner, the lump sum will be paid directly to the member’s estate and distributed according to your will.  

Pensionable earnings statement

This section shows how much you have accumulated in your pension scheme year after year. The revaluation figure consists of an estimate of inflation provided by the treasury, plus another 1.5%.

Any other things to consider?

With the McCloud updates still pending until October 2024, the Total Reward Statement could change dramatically, so it would be prudent to retain a copy of your NHS Total Reward Statement prior to any changes, giving you the ability to reference data should there be any errors.

You must understand your NHS Total Reward Statement, so please get in touch if you need further guidance.

This article is not specific advice. We would always suggest you seek specialist advice in this area.

Do you check and understand your NHS Total Reward Statement?  Let us know by leaving a comment below