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Career average revalued earnings meaning
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What does Career average revalued earnings mean?
Career average revalued earnings (CARE) describes a defined benefit pension design in which a member builds up a slice of pension each scheme year based on that year’s pensionable pay and the scheme’s accrual rate. Each annual slice is then revalued (for example by CPI or a fixed rate) up to retirement, and the total of the revalued slices determines the pension. This contrasts with final salary schemes, which use pensionable pay near retirement. CARE reduces sensitivity to late‑career pay changes and “salary spiking”.
CARE is a descriptive pensions practice term rather than a single statutory definition. It is embedded in scheme rules and, for UK public service schemes, provided for under legislation such as the Public Service Pensions Act 2013 (and equivalent Northern Ireland legislation). Statutory revaluation for deferred members and indexation of pensions in payment may apply in addition, subject to legislation and scheme terms.
CARE is widely used in UK public sector pensions (for example LGPS 2014, teachers, NHS) and in some private sector schemes, and has close parallels in Ireland. Usage and core features are broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though accrual rates, pensionable pay definitions and revaluation measures are scheme‑specific.
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View the related Practice Notes about Career average revalued earnings
PRACTICE NOTES
Reformed Teachers’ Pension Scheme 2015 (England and Wales): legal framework, governance, funding (cost cap/SCAPE), eligibility, contributions, benefits and McCloud remedy
What is the Teachers’ Pension Scheme? The Teachers’ Pension Scheme (TPS) is a statutory public service pension arrangement for members of the teaching profession in England and Wales. Since 1 April 2015, the TPS has consisted of two schemes: The reformed TPS (often described in TPS literature as the ‘2015 Scheme’), established on 1 April 2015 under the Public Service Pensions Act 2013 (PSPA 2013) as a career average revalued earnings (CARE) scheme. This Practice Note concerns that scheme. The legacy TPS, created by the Superannuation Act 1972 (SA 1972) as a final salary scheme for those who joined before 1 April 2015. It closed to future accrual on 31 March 2022, while retaining a final salary link within that scheme. For more, see Practice Note: The legacy Teachers’ Pension Scheme. Separate schemes operate in Scotland and Northern Ireland and are outside the scope of this Practice Note. When the reformed TPS launched, the government acted to close the legacy TPS to...
21 May
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PRACTICE NOTES
Reformed NHS Pension Scheme 2015 (England and Wales): statutory framework, governance and funding, contributions, CARE benefits, McCloud remedy, membership, survivor benefits, flexible retirement, transfers, outsourcing and GMP indexation
What is the National Health Service Pension Scheme? The NHSPS is an unfunded public service occupational pension that delivers salary‑related, defined benefit (DB) retirement provision for health service staff. The reformed NHSPS (often termed the ‘2015 Scheme’) began on 1 April 2015 as a career average revalued earnings (CARE) arrangement. New starters since that date have joined this scheme, which is the focus of this Practice Note. The legacy NHSPS (the ‘1995/2008 Scheme’) consists of two separate final salary sections—the 1995 Section and the 2008 Section—both closed to future accrual, while preserving a final salary link within that scheme. For further details, see Practice Note: The legacy National Health Service Pension Scheme. There are distinct schemes in Scotland and Northern Ireland, which are not covered by this Practice Note. When the reformed NHSPS opened, the government acted to close the 1995 and 2008 Sections to future accrual, subject to: ...
21 May
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PRACTICE NOTES
Legacy Teachers’ Pension Scheme (England and Wales): statutory framework, final salary benefits, contributions, governance, eligibility and the McCloud remedy
What is the Teachers’ Pension Scheme? The Teachers’ Pension Scheme (TPS) is a statutory public service pension scheme for members of the teaching profession in England and Wales. Since 1 April 2015, the TPS has consisted of two distinct schemes: the reformed TPS (often described in TPS literature as the ‘2015 Scheme’), introduced on 1 April 2015 under the Public Service Pensions Act 2013 (PSPA 2013) as a career average revalued earnings (CARE) scheme for those joining on or after 1 April 2015. For further information, see Practice Note: The reformed Teachers' Pension Scheme the legacy TPS, set up under the Superannuation Act 1972 (SA 1972) as a final salary scheme for members who joined before 1 April 2015. This scheme is the subject of this Practice Note Be aware there are separate schemes in Scotland and Northern Ireland, which are not covered by this Practice Note...
21 May
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