Paid sick leave
A period of paid sick leave is treated as pensionable service.
If you are a secondary care doctor or GP contributing to the 2015 Career Average Revalued Earnings (CARE) scheme while you receive sick pay your pension will continue to accrue. This will apply even during a period of reduced pay.
You will pay pension contributions on the pay actually received but you will be credited with receiving your usual rate of pensionable pay. This is known as deemed pay.
If you are a GP partner or salaried GP 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 pensions agency for advice. Evidence may be required to demonstrate a genuine loss in pensionable income.
If you are a locum GP/bank staff you will not be covered by the deemed pay arrangements.
What deemed pay is
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 pensionable pay, irrespective of the fact that you might have been in receipt of reduced pay in respect of any 1995/2008 section benefits to be accessed. The 2015 CARE scheme accrues on the same basis for all members with 1/54th of each year of pensionable pay accruing towards the pension. When on reduced/deemed pay your pension record will detail unreduced pay accruing towards your benefits.
If you are a GP partner and your income reduces as a result of a period of sick leave, you should contact your pensions agency so that your earnings should be deemed to be those which applied during the year before your earnings reduced. This means that at retirement your benefits are calculated assuming that no earnings reduction had occurred.
If you are a salaried GP the Type 2 form allows you to note the income you should have earned had it not been for the period of sick leave on reduced pay.
Unpaid sick leave
A period of unpaid sickness absence is treated as non-pensionable. Your employer will notify the pensions agency that these are disallowed days. No earnings will be recorded in the 2015 CARE scheme in relation to periods when on unpaid sick leave.
This period will be ignored from the calculation of pensionable pay for the purposes of determining either total pensionable pay (1995 section), or reckonable pay (2008 section), and stepping back will apply in relation to benefit calculations from the 1995/2008 sections.
Stepping back allows the scheme to ignore periods of unpaid absence when calculating 1995/2008 section pensionable pay for secondary care doctors. Pensionable pay must be calculated over 365 paid days.
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.
Periods of unpaid sickness absence are recorded as disallowed days as you have received no pay and no pension contributions are to be collected.
- if you are in receipt of reduced or nil pay due to illness you will continue to be covered for death in service benefits whilst still employed
- if you are in receipt of reduced pay your contributions are based on your reduced rate of 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
- you do not need to be on sick leave to submit an application for ill health retirement. Being on sick leave does not guarantee that an application will be successful and supporting evidence needs to illustrate that the required criteria is met. Attempts at rehabilitation back into the work place should be exhausted. If you are unlikely to return to work it is preferable to apply before your employment is terminated so that your application can be treated as being made by an active member of the scheme rather than a deferred member.
Added years/additional pension and early retirement reduction buy out (ERRBO) purchases
When you are in receipt of reduced pay you will continue to pay added years contributions/additional pension purchase and ERRBO contributions based on your unreduced pay.
When you are in receipt of nil pay then contributions towards these purchases stop. For added years, the pensions agencies will be notified that these are disallowed days.
If your unpaid sickness absence exceeds 12 months, you will be unable to resume paying towards your added years/ additional pension/ERRBO contract on your return to work. Added years are no longer available and a contract cannot recommence after a break of 12 months or more. A new additional pension/ERRBO contract may be purchased after a break of 12 months or more.
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.