GP pensions
October 2007
These frequently asked questions (FAQs) have been produced following the recent publication of a number of “focus on…” guidance notes covering changes to GP pensions’ arrangements.
Q. Under the new pension flexibilities, where GPs have had superannuable income pensioned both under the practitioner and officer methods, the calculation that leads to the best pension result for the individual can be used; who makes this assessment and decision?
A. The Pensions Agency reviews the calculations and makes the assessment as to the best result. The calculations will be re-worked and re-assessed to allow for late notification of earnings and the dynamising factors. The best result will be the pension put into payment.
Q. Are salaried GPs (Primary Care Organisation (PCO)- and practice-employed) pensioned under the practitioner method (as per GP principals/providers) or under the officer method (as per hospital employees)?
A. In General Medical Services (GMS) and in permanent Personal Medical Services (PMS), all salaried* GPs on a Primary Care Organisation (PCO) performers list, thus including:
- GPs directly employed by a practice
- GPs directly employed by a PCO for the provision of primary medical services
- GMS and PMS assistant GPs
- GP retainers and
- GPs on the flexible career scheme will continue to be regarded as assistant practitioners for NHS Pension Scheme purposes and the relevant PCO will be their employer for NHS Pension Scheme and NHS Injury Benefit Scheme purposes. Practices must not complete pension records or record contributions on form GP1 for any salaried GPs they employ. Therefore, PCO- and practice-employed salaried GPs are pensioned under the practitioner method.
*2. excludes hospital doctors employed by a Primary Care Trust (PCT) to undertake secondary care in a primary care setting, who will be pensionable as officers in the NHS Pension Scheme.
Superannuation contributions
Q. Who funds and pays the employer superannuation contributions for salaried GPs?
A. The basic principle is that whoever employs the doctor is responsible for funding and paying the employer superannuation contributions. Therefore, if the GP is employed by the PCO, the PCO funds and pays the employer contributions. If the GP is employed by the practice, the practice funds and pays the employer contributions.
The one exception concerns GPs employed as assistants under the Red Book arrangements and which PCOs continue to support financially. If the practice had taken on an assistant under the Red Book, prior to 1 April 2004, and still employs the assistant with financial support from the PCT, the PCT should be responsible for funding and paying the employer contributions.
Q. Who funds the employer superannuation contributions for locums/freelance GPs?
A. For practice-employed locum work, in 2005-06 the PCO is responsible for funding the employer superannuation contributions.
Q. Who pays the employer superannuation contributions for locums/freelance GPs?
A. Whether the doctor undertaking the work is a freelance GP or a GP principal, responsibility for paying the employer contributions for locum work in a GMS or PMS practice, will, for 2005-2006, lie with the PCO.
Q. Who funds and pays the employer superannuation contributions for inducement practices?
A. There has been no official agreement with regard to inducement practitioners. It is the GPC’s opinion that inducement practitioners should be treated on an equivalent basis to other GPs and that PCOs should use their discretionary funds to ensure this is the case where this may not as yet have been factored into financial packages for inducement practitioners.
Q. How much should the PCO deduct from our monthly global sum payment to cover the costs of employer superannuation contributions?
A. This is a decision to be negotiated and agreed locally between the partners in the practice and the PCO. Some have chosen to keep their monthly deductions low on the basis that they will be in a better position to pay for the bulk of the payment once their quality achievement payments have been made. Others have decided to pay a higher monthly payment in order that they will not face a significant bill following the year end. If doctors have overpaid, a balancing adjustment will need to be made to the doctors concerned.
Another factor to be taken into account is the significant increase in the QOF price in 2005-06 over 2004-05; whatever deductions were agreed for 2004-05 should be reviewed in the light of the anticipated increase in costs and resources resulting from QOF payments for 2005-06.
Superannuable income
Q. Is my income from my out-of-hours work superannuable?
A. If the out-of-hours provider is a GMS or PMS practice, or a PCO, then the income earned for working for that provider is superannuable under the NHS Scheme. If the out-of-hours provider is a not-for-profit or mutual organisation, and that organisation has applied to be an eligible employer for pension purposes and been accepted, this work is also superannuable. The Regulations to bring this into effect have now been introduced and further information is available on the NHS Pension Agency website . Income from work for a private, for-profit organisation is not pensionable under the NHS Scheme.
Q. What are the arrangements for calculating superannauble income for NHS pension purposes?
A. This is covered by the GPC guidance note 'Focus on assessment of GP pension earnings' .
For any detailed advice as to the impact of the changes on an individual doctor’s pension, professional advice must be sought. This level of advice cannot be provided by the BMA or GPC.