Pensions

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Sick leave FAQs

Answers to questions about how sick leave affects pensions, covering deemed pay, stepping back, disallowed days and additional pension purchase and other queries.

How will a period of paid sick leave affect my pension?
What is deemed pay?
How will a period of unpaid sick leave affect my pension?
What are disallowed days?
What is stepping back?
Am I covered for death in service benefits during a period of sickness absence on reduced or nil pay?
At what rate do I pay pension contributions during a period of reduced or nil pay?
Will a period of sickness absence affect my contribution tier?
Does my employer pay pension contributions during a period of reduced pay?
Are my added years contributions affected during a period of reduced or nil pay?
Is my Additional Pension Purchase affected during a period of reduced or nil pay?
I have MHO status. How will a period of no pay sick leave affect my service?
Do I need to be on sick leave to apply for ill health retirement?

 

How will a period of paid sick leave affect my pension?

A period of paid sick leave is treated as pensionable service.

If you are a Secondary Care doctor who is contributing to the final salary section of either the 1995 or the 2008 sections, while you are in receipt of contractual sick pay your pension will continue to accrue based on your pay and commitment level prior to your period of sick leave. This will apply even during a period of reduced pay.

For pension purposes you will be credited with scaled service proportionate to your normal whole-time or part-time hours, and you will be credited with receiving your usual rate of pensionable pay. This is known as deemed pay.

If you a GP partner you will be entitled to deemed GP pay. If you suffer a genuine loss of pensionable income as a result of illness you may qualify for deemed sick pensionable pay to be credited to your pension records. You should contact your Local Area Team or Health Board or the relevant Pensions Agency for advice. Evidence may be required to demonstrate a genuine loss in pensionable income

If you are a Salaried GP you will be entitled to deemed GP pay on the same basis as for a GP partner.

If you are a locum GP you will not be covered by the deemed pay arrangements.

 

What is deemed pay?

If you are a Secondary Care doctor who is forced to retire following a period of ill health your pensionable pay will be calculated on your whole-time equivalent irrespective of the fact that you might have been in receipt of reduced pay.

If you are a GP and your income reduces as a result of a period of sick leave your Local Area Team or Health Board will advise the Pension Agency that your earnings should be deemed to be those which applied during the twelve months before your earnings reduced. This means that at retirement your benefits are calculated assuming that no earnings reduction had occurred.

 

How will a period of unpaid sick leave affect my pension?

If you are a Secondary Care doctor who is contributing to the final salary section of the 1995 or the 2008 section, a period of unpaid sickness absence is treated as non pensionable. Your employer will notify the Pensions Agency that these are disallowed days and will not count towards the calculation of your pension.

You will be recorded as having no NHS pensionable earnings for this period. This period will be ignored from the calculation of pensionable pay for the purposes of determining either total pensionable pay (TPP) (1995 section), or reckonable pay (2008 section), and stepping back will apply.

If you are a GP you will not accrue any service or be credited with any pensionable earnings during any period of unpaid sickness absence.

 

What are disallowed days?

Periods of unpaid sickness absence are recorded as disallowed days as you have received no pay and no pension contributions are to be collected. The period cannot be treated as pensionable membership for benefits purposes.

 

What is stepping back?

Stepping back allows the scheme to ignore periods of unpaid absence when calculating pensionable pay for Secondary Care doctors. Pensionable pay must be calculated over 365 paid days.

 

Am I covered for death in service benefits during a period of sickness absence on reduced or nil pay?

If you are in receipt of reduced or nil pay due to illness you will continue to be covered for death in service benefits.

 

At what rate do I pay pension contributions during a period of reduced pay?

When you are in receipt of reduced pay your contributions are based on your reduced rate of pay.

 

Will a period of sickness absence affect my contribution tier?

No. You will be allocated to a contribution tier on the basis of your unreduced earnings.

 

Does my employer pay pension contributions during a period of reduced pay?

When you are in receipt of reduced pay your employer will continue to pay contributions based on your unreduced pay.

When you are in receipt of nil pay the employer contributions stop and the Pensions Agencies will be notified that these are disallowed days.

 

Are my added years contributions affected during a period of reduced or nil pay?

When you are in receipt of reduced pay you will continue to pay added years contributions based on your unreduced pay.

When you are in receipt of nil pay then contributions towards added years stop and the Pensions Agencies will be notified that these are disallowed days.

If your unpaid sickness absence exceeds 12 months, you will be able to resume paying towards your added years contract on your return to work as long as your NHS contractual service is not broken.  The no pay period will be classed as disallowed days and the total additional service credit will take into account this period of missing contributions.

 

Is my Additional Pension Purchase affected during a period of reduced or nil pay?

When you are in receipt of reduced pay you will continue to pay contributions towards your Additional Pension Purchase based on your unreduced pay.

When you are in receipt of nil pay then contributions towards your Additional Pension Purchase will stop.

If your unpaid sickness absence exceeds 12 months, you will be able to resume paying towards your additional pension contract on your return to work as long as your NHS contractual service is not broken. The no pay period will be classed as disallowed days and the total additional service credit will take into account this period of missing contributions.

 

I have MHO status. How will a period of no pay sick leave affect my service?

Periods of no pay sick leave will be excluded from your pensionable service which may affect the accrual of your doubled service.

 

Do I need to be on sick leave to apply for ill health retirement?

No, the regulations do not require that you are on sick leave to be able to submit an ill health application.

Should your employment cease you still need to satisfy the criteria for ill health retirement to be able to access the benefits early without reduction. The fact that your employer has terminated your employment for health reasons does not guarantee a successful application for ill health retirement. Please see the Ill health retirement FAQs for further information.