‘Annualisation’ – a recap

There is an anomaly in the 2015 pension scheme that results in some members paying significantly more for the same amount of pension than others.

This is a particular problem for sessional GPs, as that their contribution tier (the percentage you pay each month) is not based on their actual pensionable pay, but their annualised pay.

Annualised pay is the amount you earned in a year divided by the total number of days worked, and then multiplied by 365. 

In effect, this means that many sessional GPs will pay 14.5% for their pension (the highest tier amount), even if a full time employed doctor with the same level of actual pensionable pay was being charged 5.6%.

We believe this is inherently unfair and have pursued every avenue available to overturn this decision by the Government.

Wider pensions discrimination background

You may be aware that when the 2015 scheme was introduced, protection was offered to older members that allowed them to remain in the 1995/2008 scheme.

This protection was not offered to younger members and as a result, this was found to be unlawful on the grounds of age discrimination.

The Government has recently consulted on their proposed remedy to this age discrimination. You can find the BMA response to this here.

The Government has proposed that affected members will be provided with the option to choose which pension scheme they would like to be in during the ‘remedy period’, which is between the 1 April 2015 and 1 April 2022.

One of the key things that the BMA has asked for is that members can choose which scheme they wish to be in for this period at the time of retirement.

This is the only way members can be certain they are making the correct choice as it is based on actual rather than assumed values.

One of the consequences of this is that members will be moved back to their legacy scheme (1995 or 2008) at the end of the remedy period.

Potential sessional impact 

This applies to all doctors but has a particular effect on sessional GPs.

If the 2015 scheme ceases to exist, then the concept of annualisation will also disappear, as it did not feature in the 1995 or 2008 schemes. 

The BMA has therefore asked that those members who paid too much in contributions via annualisation have their excess contributions refunded.

The BMA has also argued that post-2022 annualisation is no longer applied to the 2015 pension scheme and that instead contribution tiers are based on actual pay. 

Furthermore, given that annualisation is inherently unfair, we have asked for assurances that should members wish to move to the 2015 scheme for the remedy period at the point of retirement that they will not be asked to pay additional contributions. 

We wait to hear from the Government regarding the pensions consultation response we have submitted.

BMA sessional GPs committee deputy chair and pensions committee deputy chair Krishan Aggarwal