Benefits
The Network Pension Scheme provides a pension for life at retirement, a lump sum option, a pension on retirement through ill health, and lump sums and pensions for the partners and children of members who die. The benefits are defined by the scheme rules and do not depend on investment returns. This page describes each benefit; the figures that apply to an individual member are shown in their annual benefit statement and may be requested from the Pension Service at any time.
How a pension is worked out. The scheme is a career average scheme. In each scheme year a member earns a pension of one sixtieth of the pensionable pay they received in that year. On 6 September the pension earned so far is revalued at the rate determined by the Treasury Department, so that it keeps its value until it is paid. The table below shows the first five years of a member joining on 6 September 2026 on pensionable pay of 36,000 credits, with pay rising by about 3 per cent a year and a revaluation rate of 2 per cent. The figures are illustrative.
| Scheme year | Pensionable pay (credits) | Pension earned in the year (credits) | Total pension after revaluation (credits a year) |
|---|---|---|---|
| 2026 to 2027 | 36,000 | 600 | 600 |
| 2027 to 2028 | 37,200 | 620 | 1,232 |
| 2028 to 2029 | 38,400 | 640 | 1,897 |
| 2029 to 2030 | 39,700 | 662 | 2,597 |
| 2030 to 2031 | 41,000 | 683 | 3,332 |
After thirty years on this basis the member would have earned a pension of about 37,000 credits a year, payable for life from the age of 66, and could exchange up to one quarter of it for a lump sum of about 111,000 credits.
The benefits. The eight benefits of the scheme are described below.
- Pension at retirement
- For each scheme year of pensionable service a member earns a pension of one sixtieth of the pensionable pay received in that year. The pension earned in each year is revalued on every 6 September until it comes into payment. The pension is payable for life from the normal pension age of 66, or earlier or later with the factors set out on the Retirement page.
- Lump sum by commutation
- At retirement a member may give up part of their pension, up to one quarter, for a lump sum. The rate of exchange is 12 credits of lump sum for each credit of annual pension given up. The choice is made on the retirement declaration and cannot be changed after the pension comes into payment.
- Ill-health pension
- A member who is permanently unable to carry out the duties of their post may retire on an ill-health pension at any age, on the certificate of a medical practitioner appointed by the Service. There are two tiers, set out in the table below, according to whether the member is able to take other regular employment.
- Death in service
- If a contributing member dies, a lump sum of three times their pensionable pay at the date of death is paid to the person or persons the member has nominated, or otherwise to the member's estate. Pensions are also paid to the member's partner and dependent children, calculated as if the member had continued in service to the normal pension age.
- Survivors' pensions
- On the death of a member, whether in service, with a deferred pension or in receipt of a pension, a pension is paid to the member's partner for life and to each dependent child until the age of 18, or 23 while in full-time education. The amounts are set out in the table below.
- Five-year guarantee
- If a pensioner dies within five years of their pension coming into payment, the balance of five years' pension, less any payments already made, is paid as a lump sum to the person or persons the member has nominated, or otherwise to the member's estate. Survivors' pensions are paid in addition.
- Deferred pension
- A member who leaves the employment of a participating member organisation after completing the qualifying period of two years keeps the pension earned to the date of leaving. It is revalued each year in the same way as the pension of a contributing member and is payable from the normal pension age, or from the age of 56 with a reduction.
- Pension increases
- Pensions in payment, including survivors' pensions, are increased on 6 September each year at the pension increase rate determined by the Treasury Department. The first increase applies on 6 September 2027 and is proportionate for pensions that came into payment during the preceding scheme year.
Ill-health retirement. The two tiers of ill-health pension are decided on the certificate of a medical practitioner appointed by the Service and may be reviewed at intervals until the normal pension age.
| Tier | Condition | Pension |
|---|---|---|
| Tier 1 | Permanently unable to carry out the duties of the member's post, but able to take other regular employment | The pension earned to the date of retirement, paid without reduction for early payment |
| Tier 2 | Permanently unable to take any regular employment | The pension earned to the date of retirement, enhanced by half the pensionable service the member would have completed to the normal pension age |
Survivors' pensions. A partner is a spouse, civil partner or a person with whom the member had lived as a partner for at least two years and whom the member had nominated. Survivors' pensions are increased each year in the same way as members' pensions.
| Beneficiary | Death after retirement or with a deferred pension | Death in service |
|---|---|---|
| Partner's pension | One half of the member's pension before any lump sum was taken | One half of the pension the member would have earned to the normal pension age |
| One dependent child, where a partner's pension is paid | One quarter of the member's pension | One quarter of the pension the member would have earned |
| Two or more dependent children, where a partner's pension is paid | One half of the member's pension, shared equally | One half of the pension the member would have earned, shared equally |
| Dependent children, where no partner's pension is paid | One third of the member's pension for one child; two thirds shared equally for two or more | One third or two thirds of the pension the member would have earned, on the same basis |
Nominations. A member may nominate one or more persons to receive the death in service lump sum, and may nominate a partner who is not a spouse or civil partner, by writing to the Service. Nominations may be changed at any time. A member who has made no nomination should do so; without one the lump sum is paid to the estate, which may delay payment.
Questions about benefits, requests for a statement and nominations may be sent to contact@pensions.gov.vin. For the rules in full, see the Scheme Rules; for the procedure and the factors for early and late retirement, see Retirement; for answers to common questions, see the frequently asked questions.