A little known loophole in the NHSPS ‘Death in Service’ benefit regulations for GP locum members has been thrust into the spotlight by a bereaved family’s ongoing fight to secure the lump sum it believes is due to it.
Helen Sanderson, a Merseyside GP locum, died suddenly on Christmas Eve 2014. She was just 40 years-old and left behind a husband and two young children. For Helen’s family and friends grief and shock has been compounded by anger on discovering that her unexpected death has been rejected as a ‘death in service’ by the NHSPS – because she died on a day she was not scheduled to work.
Appeal for donations for family of GP locum denied 'death in service' payment http://t.co/tGApACYNXC
— PulseToday (@pulsetoday) August 14, 2015
The current stark reality determining the level of lump sum payments from the scheme to families is that a GP locum who is contracted to work from Monday to Wednesday is covered if, for example, they die on a Tuesday evening. However, if they die on a Thursday, they are not covered – as they are deemed to have left the service – even if they were due in the same surgery the following Monday.
Death in Service benefits for locum GPs – what you need to know
‘Deaths in service’ result in a lump sum payment based on two times the locum’s average annual income at the time of their death.
Deaths deemed ‘not in service’ will result in a payment based on a multiple of the locum’s accrued pension at the time of death. (The multiple will depend on which version of the scheme they were in).
It is important to note that the difference in the two types of payments from the scheme can be substantial. This is especially the case for younger GP locums in their 30s and 40s, who, perhaps as a result of career breaks, have not yet accrued a sizeable pension pot.
The NHS Pension Service decision not to rule Helen’s death as ‘in service’ is set to have far-reaching financial consequences for her young family as her husband Carl explains, “The actual difference in benefit pay-outs from the scheme is more than £110,000. The kids have lost their Mummy and they will almost certainly lose their home as well.” He is outraged by the ruling that she did not die ‘in service’, adding, “Helen was booked into sessions stretching into summer 2015, which is obviously a demonstration of her commitment to the NHS and the job. To say that she had left the service is a ludicrous over-interpretation of those regulations.Why would any locum dare take a holiday if they’re going to be exposed to this?” asks Carl. “I know a lot of Doctors and their reaction to this situation is identical; grief at losing Helen, anger at the injustice of the situation, followed by an appraisal of their own situation. There are 17,000 locum GPs in this country and every single one of them needs to know about this.”
Independent NHS Pension Specialist Kevin Walker of BW Medical Accountants believes that alarm bells should be ringing for GP locums and that they need to be warned about potential shortfalls so that they can plan accordingly. He says, “It’s a very serious issue and needs to be highlighted. Most people just don’t know that locums get completely different benefits to salaried members of the NHS Pension Scheme.”
The cost of cover
We asked BW Medical Accountants to provide indicative monthly costs for life cover to compensate for the lack of death in service benefits, and also life with critical illness cover, for GP locums at different ages. There is no differentiation between monthly costs for males and females.
|Life cover only||£7.70||£12.41||£19.52|
|Life cover and critical illness cover||£34.46||£59.55||£101.56|
|These figures are for illustrative purposes only and will vary depending on personal circumstances. Speak with a qualified financial adviser for specific costings.|
Kevin’s advice to mitigate against potential financial loss is clear, “Take action now. Get a pension statement so that you know exactly where you are pension-wise and speak to a well-qualified financial adviser who really understands the scheme and can make recommendations to cover any shortfall after your death based on your particular circumstances. Since the reality is that you are four to five times more likely to suffer a serious illness than to die, adding critical illness cover to your life cover may be essential to plug any gaps in your family’s finances should anything happen to you.” ●