2019 in view pt 2 – Proposed changes to NHS pension scheme

The NHS pension scheme is re-evaluated on a four yearly basis. As part of this, the NHS pension Scheme Advisory Board of DHSC, published a consultation document on 18 December 2018, is suggesting that

  • the employee contribution rates will remain unchanged until reviewed again March 2021.
  • the employer contribution may rise from the current 14.3% (plus 0.08% admin fee) to 20.6% (plus 0.08%?) from 1 April 2019.

This is a substantial rise which, if implemented, would ultimately be paid via practices to their employees and GP locums. But the document includes some reassurance that “The Government have committed to providing additional funding to meet costs arising from the current actuarial valuation of the NHS Pension Scheme alongside the long-term funding settlement for the NHS”.

So it is the stated intention that practices will not be left to foot the bill for employer contributions. We can only hope that the funding does follow from this stated commitment, given that all the indicators are that the state-backed indemnity scheme, due to be launched on the same day, is also expected to be “funded from existing resources allocated for general practice.”

And what about annualisation? Mixed messages and lack of clarity - The Scheme Advisory Board say they wish to minimise opt-outs from the scheme and therefore have considered “A move to use actual pay, rather than whole-time equivalent pay, to determine contribution rates would be appropriate.”

But later on, the document appears to cement annualisation in place, and even infers that locums may no longer be allowed three months breaks in service “ The Department is aware that, in the past, some GPs have had breaks of up to three months (or, if they are a salaried GP, breaks of no more than one month) ignored when setting an annual rate of pay. From April 2019, breaks in pensionable service will be treated in line with the wording of the regulations, as amended. Consequently, a GP's annual rate of pay will be based on the number of days of pensionable service that they have undertaken during the relevant scheme year."

It is unclear and needs special scrutiny from pension regulation specialists with skill in drafting legal documents within the BMA to ensure GPs are not again left with the consequences of poorly thought out and poorly drafted regulations, as occurred in the 2015 scheme.

See also

2019 in view pt 1 – DHSC aim to launch state-backed indemnity for GPs in April 2019

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