The locum pension paradox – annualising days not covered by death in service

The emerging implications of the 365-day annualisation of pensions for GPs within the 2015 pension scheme become even more bizarre when you factor in that GP locums within the NHS pension scheme are not entitled to 365-day death-in-service benefits.

As we near the end of a pension year and many of us digest the implications of annualisation, it’s welcome to get some perspective from our financial advisor contributors ('Is the property market a 
good alternative to NHS pensions?') on just how valuable the NHS pension remains compared to private pensions and other longer term investments, even if you do end up being subjected to an extra bill for annualisation.

Why is locum break-in-service work annualised for 365 days when death-in-service benefits only cover for a fraction of this?

This is some solace, but only some, and only if you look at pension provision in a silo, isolated from the rest of what’s happening to GPs. Because pension provision is part of the package of being a GP, and other parts of that package are under threat: working in an over-stretched service which places us in positions of “enforced underperformance”; the culture of rising litigation; the fear of being found personally (or even criminally) liable for system failures; and rising indemnity costs, along with uncertainty about how occurrence-based cover that adequately supports individual practitioners will be provided in the future.

On the matter of annualisation, there is some ‘equality’, in that as this applies across the entire NHS workforce (all employee pension contributions tiers are based on notional whole-time equivalent income), then it should arguably also apply to GPs too.
However, and a BIG however, the break in service rules that are now applied when a GP changes from a Type 1 or Type 2 Practitioner to a locum are a major problem, especially in the current climate of significant GP recruitment and retention problems, by reducing the attractiveness for GPs to offer flexible, sporadic locum support or take on new roles, and risking the unanticipated consequence of further reducing GP capacity. This needs monitoring and addressing.

Already NASGP is hearing from GPs who were doing the “right thing” by offering extra locum cover, or taking on a salaried or partner role, and are now finding that they are affected by annualisation. In some cases, the extra pension cost they are paying is more than the extra locum pay they received.

And the usual response NASGP hears is “I won’t do extra locum work again” or “I wouldn’t have taken the job if I’d known.”

Finally for GPs working solely as locums, there is the extra irony that if they have a “break in service” they will have to apply their daily rate to 365 days a year. But some of the NHS pension benefits do not apply to them 365 days a death-in-service benefits are paid to your family if you happen to die on a day when you’re not booked to work.
If our government is serious in any way about GP retention and recruitment, and better still, making best use of the existing pool of flexible GPs, a whole, “joined up” approach to the experience of being a grassroots GP is fundamental to any plans.

Beware the NHS pension annualisation booby trap

Sara was a salaried GP for 4 years, and has worked as a locum GP since 2001 in over sixty different GP practices. As well as NASGP’s appraisal and revalidation lead, and mother to twins, she is also the brains behind NASGP’s Practeus platform.

Sara’s an avid reader, especially fiction, history and trains (yes, trains); loves walking, pilates and beans on toast with cheese.

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