FAQ: Who pays the employer’s contribution on an NHS pension?

The statutory NHS Pension Scheme Regulations and section 49 of the Pensions Act 1995 states that the employer has to pay the employer’s contribution if you’re contributing to the NHS superannuation scheme. However, some practices are unaware how this relates, resulting sometimes in the pernicious request for self-employed locums (who are all independent contractors) to agree to a ‘pension included’ fee.

The BMA is also very clear on this.

Legal obligations

Failure to remit contributions to the Scheme, complete relevant paperwork, update member pension records, or deny employees access to the Scheme constitutes a breach of the statutory NHS Pension Scheme Regulations and section 49 of the Pensions Act 1995. Section 48 of the Pensions Act 1995 and section 70 of the Pensions Act 2004 states that NHS Pensions has a legal duty to report any ‘breaches of law’ to the Pensions Regulator. If an individual is found guilty of a ‘breach of law’ they may be subject to a heavy fine, imprisonment, or both.

And also, according to the BMA, if that practice is a GMS practice it is also acting in breach of the statutory GMS SFE (Statement of Financial Entitlement). The SFE has penalty clauses including giving the PCO powers to withhold monies it pays to the practice if any part of the SFE has not been complied with.

Since early 2013, in England and Wales, since funding is provided for all superannuation contributions, including those of GP locums, it is now the responsibility of practices in England and Wales to pay the employer’s contribution for locums.

If a practice therefore refuses to pay, the NHS Pensions Division, the Pensions Division can withhold monies from a GP Provider’s pension benefits if they decide they have been acting illegally.

The NHS Pensions Division also have a duty to inform the Business Services Authority, at NHS Counter Fraud Services, if they believe that fraud may have taken place in the NHS. NHS Counter Fraud has already investigated several Practices who are allegedly breaking the law.

Exclusive advice from NHSPA

If you are an employed sessional GP (an assistant, retainer, or salaried) working for an organisation that qualifies as a NHS Pension Scheme Employing Authority (GP Practice, CCG, LHB, etc) your employer must, in law, ensure your employment is pensionable. If you are a self-employed GP locum working in the NHS you have been entitled to ‘pension’ your income since April 1st 2001. Your scheme membership is ‘triggered’ by completing (and submitting) forms A and B.

If you are a GP locum working for an agency (or a commercial deputising agency) or have set yourself up as a limited company you fall outside of the NHS Pension Scheme and cannot ‘pension’ your NHS income; you should therefore consider alternative pension arrangements.

Once you’re paying regular Scheme contributions into the Scheme, keep an eye out in your bank statements to ensure your cheques have been cashed as not all authorities send monthly statements.

Meanwhile, for GP locums, practices are responsible for paying the 14.38% employer’s contribution.

If a GP practice is any way, directly or indirectly, deducting the employer’s contribution from your fee, you must immediately remind them that this is outwith the rules of the NHS Pension Scheme. If they fail to comply, and rectify any previous deductions, in the first instance we recommend contacting the Pensions Ombudsman, who will issue you with a reference number and advice on how to proceed. Alternatively, the Pension’s Regulator will accept reports from whistleblowers.