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I have written a Q&A blog on this occasion to try and help lift some of the fog regarding the changes that came in on 1 April 2019 to the 2015 NHS Pension Scheme.
I have called this version one. If you have queries that I have not covered, email me at [email protected] and I will add answers to the bottom of this blog and change the version number.
We have provided answers to some of your FAQs below.
What has changed?
The Department of Health and Social care (DHSC) have made changes to the regulations that affect the 2015 NHS pension scheme. This includes changes to annualisation arrangements and employer contributions.
What did the BMA do?
The BMA met with NHS Pensions, other trade union representatives and the DHSC to voice its concerns about the proposed changes. DHSC consulted on the proposals and the consultation findings and government’s response is now available.
You can also read BMA’s response to the consultation here.
What does this mean for annualisation?
Annualisation, the regulation affecting certain members of the pension scheme – those who have transitioned to the 2015 scheme and who have taken breaks within the pension scheme year – may have to tier their pension contributions at a higher rate based on their annualised earnings, rather than their actual earnings.
In addition to this, the updated regulations remove the one- month concession for Type 1 and Type 2 GPs and remove the three- month concession for locum GPs.
My usual statement - The BMA has never agreed to the practice of annualisation and we disagree with the way that the regulations are being interpreted and applied. Read our statement on annualisation here.
According the consultation, it is deemed that locums have an advantageous position and therefore should be annualised. Is this true?
We do not believe this is correct. We believe that locums are disadvantaged by these changes.
Will this affect those that work part- time?
For Type 1 and Type 2 GPs who are in a contract for the whole year, they will not be annualised, even if they are part time.
E.g. a GP is a Partner/salaried one day a week from 1 April 2019 to 31 March 2020. They are not annualised despite working one day a week.
If their contract is not for the whole pension year, then they will be annualised. Any break between contracts will also lead to annualisation.
What we are not clear on is whether working over a weekend would lead to annualisation, as we have received inconsistent advice. We are working with NHS Pensions to seek further clarification on this.
What if I do additional work?
The current rules being applied are called “Add then annualise”. Each role is no longer annualised separately and these changes have been made retrospectively to everything since 1 April 2015.
If you have breaks, the more days you work, the less “worse” annualisation will be.
Will it affect me if I were to go on Maternity leave?
If you are in a contract for the whole pension year while on maternity leave, annualisation will not affect you. However, if you were to have breaks between employments or do locum work then it would affect you.
What about locum-ing?
This is the most difficult to answer.
To continue with an example like the above, if a GP were to work in a practice as a locum one day a week, under a locum arrangement, they would be annualised. In comparison, if a salaried GP were do the same work one day a week in the same practice, but under a salaried contract, they would not be annualised.
What about working on the weekends?
We are still seeking further clarification from NHS Pensions on this. The advice received seems to suggest that if a locum works in a practice/provider that is only open five days a week, then weekends would be excluded. However, if a locum were to work where the practice/provider opens seven days a week, the locum would be annualised including weekends.
Will the Annualisation Calculator account for this next year?
Again, we do not know.
If I am a locum, should I pension all my locum work?
If you are a sole locum, the more days you are in the scheme, the less “worse” annualisation will be because a GP is annualised over 365 days.
When will the new locum A and B forms be released for use?
Last year, NHS Pensions consulted us on the forms prior to their release and took on board some of our comments.
We are yet to receive confirmation on the new forms for 2019 – in the interim the only thing I can suggest is to use the current forms and cross out the 2018 and write 2019.
What Tier should I use?
Whether you are a Type 1, Type 2 or a locum GP it is your responsibility to pay the correct tier.
The correct tier will be based on your income after adding all your practitioner roles together. You need to apply the same tier for all your practitioner roles. Officer roles do not count towards your tier.
If you are paying a lower tier during the year, you would need to ensure that you top this up to the correct tier at the end of the year. If you were to overpay, at the end of the year you would need to claim the monies back, either from your provider or from Capita (PCSE) depending on your role.
We can only advise you to choose the preferred method that would suit you better, but you will need to ensure that you have paid the correct tier at the end of the year. For more background, please read our series of blogs on Capita.
What about GP Trainees?
GP trainees are Officers in the NHS pension scheme. They become Practitioners when they become a GP. There are still some GP roles that fall under the Officer scheme (e.g. CCG roles, some OOH providers, some appraisers). When you are an officer, the tier is based on the whole time equivalent. In the first year of being a GP, a trainee will not have a full pension year, so they will always be annualised.
The Employer contribution has increased from 14.38% to 20.68%, do I need to claim this from the practice?
No. From 1 April 2019 the employer’s contribution rate will change from 14.38% to 20.68% for all scheme members, however for the year 2019/20 the employer’s contribution rate will remain at 14.38% with HM Treasury making up the balance. Please check the NHSBSA guidance (page 3).
Krishan Aggarwal is Deputy Chair of the Sessional Subcommittee, GPC UK and a member of the BMA Pensions Committee.
You can follow him on Twitter @Krishanx
If the pension contribution is being annualised, then do locums have the same rights as their salaries and partner colleagues with regard to death in mservice on a day that they are not working?
No. From 1 April 2019 the employer’s contribution rate will change from 14.38% to 20.68% for all scheme members, however for the year 2019/20 the employer’s contribution rate will remain at 14.38% with HM Treasury making up the balance.
Je suis so confused. So, HM treasury making up the difference how.....
Also, I'm a gp locum, one session a week..... And other sessions at a different practice..... At varying points in the year Is it necessary to annualise?
I'm so depressed about it.
What's the point in being a GP and working anymore.
Unfortunately, I feel the fog regarding annualisation is only being thickened, rather than lifted. The only thing I am clear on is that the BMA is objecting to annualisation. I can only assume that the BMA has a specific understanding of how annualisation might work, otherwise I am unsure as to how it can be so firmly objecting.
My previous understanding was that, as a locum, if I e.g. decided to take 3 months off, then I would have to pay employee pension contributions at the tier rate that would apply if I had continued to earn during those 3 months at the same level as during each of the other 9 months in the year (leaving aside how this might be calculated given my locum income varies month by month, even if I don't take any holidays). I then read somewhere (not sure where) that the key to avoiding annualisation was to be working on 1 April this year and 31 March next; this is plainly ridiculous. I am now understanding from the above that I will be paying contributions at the tier rate that would apply if I were earning the same as I earn on an (average?) working day on each of the 365 days of the year; this is also plainly ridiculous.
Please, BMA, can you at least be clear as to what you are objecting? And if it isn't clear as to whether my locum income will be annualised from some sort of daily, monthly, or other calculated income - please can you, er, just be clear that this isn't clear?
This is all very urgent. We are, very obviously, already into this pension year, and some may decide that they don't want to make NHS pension contributions at the end of this month, depending on how annualisation will apply to them. Personally, I carefully book my locum work so I earn up to a pension tier threshold, and have booked work many months ahead on the basis of this level of income. This may become utterly pointless. I am also wondering whether if, say, one likes to work around 5 sessions a week, would one be better off doing this as one session a day than 2 days one week and 3 days the next? But this may well now be a consideration for future years.
I hope we can see more clarity soon. Many thanks.
Does that mean if you change jobs (salaried),let's say sometime in july /august, and may have one or two weeks holiday between the jobs, you will get annualised?
1. No, Locum GPs currently have no rights to Death In Service benefits, if we die on a day we are not actually working. Even if we have further work booked in a days time. Our bereaved loved ones will get nothing, despite the fact that we have probably paid contributions into our NHS Pensions over many years.
Ridiculously this rule means bereaved families would also not receive anything if, for example, we were tragically killed whilst travelling between a morning surgery and a booked afternoon surgery with a different Practice. Presumably too if the death happened to occur over a weekend?
2. Yet for 2015 Scheme Annualisation purposes we are required to multiply up as if we are working every day of the 365 days in a year.
I really don’t understand how NHS England can have it both ways!
So if we change jobs as a Salaried GP, or to Locum GP from Salaried (or Salaried to Locum) at any point other than on 31 March/ 1 April, or with any gap between posts of more than 1 day,
we fall foul of Annualisation ;
And if we take any holiday or any leave at all as a Locum GP for longer than 1 day!
we fall foul of Annualisation ;
And if when working as a Locum GP we have to take time off for illness, or need to take maternity, Parental or adoption leave, or if we take time out to volunteer to work for a medical humanitarian charity....... we fall foul of Annualisation ;
Or we just happen to have a break between Locum jobs of more than 1 day.....
In all the above scenarios we will be subject to Annualisation when calculating our Pension contribution tier, but my understanding is that the Pension we receive will be based on our actual career average earnings, not our earnings as if we multiplied up to 365 days of every year.
We pay in, but we don’t get a fair amount out.
It’s an absolute rip off!
3. “I am now understanding from the above that I will be paying contributions at the tier rate that would apply if I were earning the same as I earn on an (average?) working day on each of the 365 days of the year; this is also plainly ridiculous.”
=> Yep, that’s about the sum of it.
I completely agree it’s ridiculous, and I think it is discriminatory - especially when we look at the groups of GPs most likely to be affected by the above scenarios.
4. “Does that mean if you change jobs (salaried),let's say sometime in july /august, and may have one or two weeks holiday between the jobs, you will get annualised? “
=> Yes, you will be subject to Annualisation in this case.
Annualisation = discrimination. I’m angry about it.
Does anyone have any useful suggestions of an alternative pension scheme?
This pension scheme is enough good it somebody help to more exploration specially in this field.
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