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North Staffordshire Local Medical Committee |
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PENSIONS AGENCY NEWSLETTER March 05 Tel: 01253 774774 Fax: 01253 774412
NHSnet: http://nww.pensionsagency.nhs.uk/
Dear Colleague, NHS PENSIONS NEWSLETTER: GP CONTRACT UPDATEThis Newsletter contains important information about:
1. The admission of Out of Hours Providers as NHS Pension Scheme Employing Authorities. The NHS Pension Scheme Amendment Regulations, expected to come into force on 5 April 2005, will allow certain Out of Hours Providers admission to the NHS Pension Scheme. Subject to the Regulations coming into force from the 5 April 2005, Out of Hours Providers should complete the application form at Annex ‘A’. It is also available on the Pensions Agency website at www.nhspa.gov.uk/Library. They should then send it to the finance or contracts department of their principal Primary Care Trust (PCT) or Local Health Board (LHB) whom they are primarily engaged with to perform NHS out of hours duties. The application form, and further guidance on how to complete it, will be available on the NHS Pensions Agency’s website from 5 April 2005. PCTs, LHBs, and Out of Hours Providers (such as GP co-ops) should read carefully the qualifying criteria allowing an Out of Hours Provider (OOHP) to become a NHS Pension Scheme Employing Authority before completing the application form. OOHPs must apply by the 30 June 2005 if they wish to backdate Scheme membership as an Employing Authority. A summary of the criteria is set out below. A company limited by guarantee; · where all the members are GP Partners (or shareholders), GMS or PMS contractors and there is a requirement on the majority to perform OOHs services · which has a contract with a PCT, LHB, or Practice to provide OOHs services · which is operated for the benefit of the general public · which operated wholly or mainly in a way which is of a mutual trading character · which is not a subsidiary of a commercial OOHs Provider. or A body corporate; · where at least one member is a GMS or PMS contractor or a GP Partner (or shareholder) which operates on a “not for profit” basis and requires any profits to be re-invested back into the business · which forbids the payment of dividends and requires assets to be transferred to a charity or similar body on its winding up · which has a contract with a PCT, LHB, Practice to provide OOHs · which is not a subsidiary of a commercial OOHs Provider. More detailed information about the application process, the Employing Authority criteria, and the rules of the NHS Pension Scheme for OOHPs and their staff will be available on the NHS Pensions Agency website (www.nhspa.gov.uk) from the 5 April 2005. An OOHP, whose application to become an Employing Authority is rejected by the relevant PCT or LHB, can write to the Scheme Compliance Team based at the NHS Pensions Agency if they wish to appeal. 2. Principal and Assistant Practitioners pensionable pay Subject to the Amendment Regulations coming into force the definition of NHS pensionable pay for Principals and Assistants who are listed on a PCT/LHB Performers list will be broadened. From 1 April 2004 it will include fee based earnings, after deduction of expenses, in respect of a contract for primary medical NHS services. The contract for services must be between a Principal Practitioner (i.e. GP Partner or Single Handed GP), an Assistant Practitioner (i.e. Salaried GP), a GMS or PMS Practice, an Alternative Primary Medical Services (APMS) contractor, or an Out of Hours Provider, and any of the following that are registered as an NHS Pension Scheme Employing Authority; i) a PCT ii) a LHB iii) a NHS Trust iv) a NHS Foundation Trust v) a Special Health Authority vi) a NHS body (such as a GP co-operative) that is an approved NHSPS Employing Authority An example of GP work that is now pensionable is NHS board, advisory, or Out of Hours work performed by a GMS or PMS GP for an Employing Authority under a fee based contract for services arrangement. GMS and PMS GP Partners and Single Handed GPs (i.e. Providers) will have the choice of this ‘fringe’ income being paid into the Practice account (pooled) and recorded as additional pensionable income on the end of year Certificate (see part 4) or to record this work as individual pensions credit on the new form GP SOLO (see part 5). Salaried GPs (i.e. Assistant Practitioners) performing work in addition to their normal GMS/PMS work should always use the new form GP SOLO unless they have agreed to perform primary medical services on behalf of their employer. If a GMS or PMS GP opts out of ‘pensioning’ their ‘fringe’ NHS earnings (including OOHs) they cannot remain an active member of the NHS Pension Scheme as a GP. GP earnings will not be pensionable where a GP (or GP Practice) engages directly with a body (i.e. a prison, hospice, charitable organisation, insurance company, out of hours provider, etc) that is not a NHS Pension Scheme Employing Authority. GPs cannot pension earnings under a fee based (contract for services) arrangement with a NHS Pension Scheme Direction body. GPs who first joined the NHS Pension Scheme from 1 June 1989 are subject to the Inland Revenue pensionable earnings cap. The IR cap for 2004/05 was £102,000.00 and for 2005/06 is £105,600.00. 3. Primary Care Trust Executive Committee (PEC) allowances paid to GPs Under the existing NHS Pension Scheme Regulations GMS GPs are allowed to ‘pension’ their PEC allowances. These allowances are currently recorded as a separate Practitioner pensionable employment ‘triggered’ by a starter form SS14. Subject to the Amendment Regulations coming into force, Principal and Assistant Practitioners in PMS shall also ‘pension’ their PEC allowances with effect from 1 April 2004. To ensure uniformity, PCTs should close down any GMS GP PEC pensionable posts by sending in a terminal SD55 to the Pensions Agency with a last day of membership of 31 March 2005. From 1 April 2005 GMS GPs pensionable PEC earnings must be recorded on form GP SOLO or paid directly into the Practice account and recorded on the end of year Certificate. If paid into the Practice account, employer contributions must be included in the fee. From 1 April 2004 PMS GPs PEC allowances must be recorded on either the form GP SOLO or on the end of year Certificate. If the form GP SOLO is the preferred option, only one is required to record retrospective PEC allowances from 1 April 2004 to the 31 March 2005. PCTs should liaise with their GP PEC members and chairs to confirm the preferred option. These instructions also apply to Local Health Board Executive Committee GPs in Wales. 4. The End of Year Certificate The End of Year Certificate, as described in Technical Newsletter 15/2004, has now been finalised and a copy (along with Supplementary Explanatory Notes) is at Annex ‘B’. This is also available on the Pensions Agency website at www.nhspa.gov.uk/Library From 2004/05 onwards the Certificate must be completed by every GP Partner, Single Handed GP, and non GP Partner in both GMS and PMS in England and Wales and forwarded to the host PCT/LHB. The Pensions Agency can only answer questions regarding pensions issues relating to the Certificate and cannot assist with, or provide advice in respect of, any accountancy issues. 5. The form GP SOLO A final version of the new form GP SOLO, as described in Technical Newsletter 15/2004, is at Annex ‘C’. It is also available on the Pensions Agency website at www.nhspa.gov.uk/Library. Employing Authorities may also obtain copies from the Agency’s Stationery Distribution Centre on 08701 555 455. The following people must use the form GP SOLO: i) GP Partners (and Single Handed GPs) who do not wish for their ‘fringe’ NHS fee based pensionable earnings (including OOHs) to be paid into the Practice account and shared amongst the other Partners. ii) Salaried GPs employed by a Practice, PCT, LHB, or Trust who are working on an individual basis (and not on behalf of their employer) under a fee based contract for services arrangement with another NHS Pension Scheme Employing Authority. iii) GP Locums who regularly work for an Out of Hours Provider (that is an Employing Authority) in a non deputising (locum) role. iv) GPs who work solely for an Out of Hours Provider and have no other pensionable posts. From April 2005 the form GP SOLO must be completed by the GP and the ‘fringe’ NHS Employer and sent to the GP’s host PCT/LHB on a monthly basis. Only one form GP SOLO is required for each GP in respect of ‘fringe’ fee based pensionable earnings (including OOHs) from 1 April 2004 to 31 March 2005. The form GP SOLO must not be used if a GP elects to ‘pension’ their fringe NHS earnings through the Practice account (i.e. pooled income) or if they are employed under a formed contract of employment with a Practice, PCT, LHB, or Trust. 6. GP Locums Pensionable pay and contributions Subject to the Amendment Regulations coming into force on the 5 April 2005, earnings in respect of a GP Locum deputising for an Out of Hours GP will be pensionable from 1 April 2004 providing the Out of Hours Provider (OOHP) is an Employing Authority. The OOHP is responsible for the payment of employer contributions at the rate of 14% and for collecting the employee contributions. The earnings must be recorded on forms GP Locum C and D which will be available from 5 April 2005 on the Agency’s website and from the Agency’s Stationery Distribution Centre on 08701 555 455. PCTs and LHBs must ensure that a GP Locum’s Practice pensionable earnings and OOHs pensionable earnings are recorded on the same form SD55. A new joiner form SS14 is not required to set up a record of a GP Locum’s OOHs earnings, if the individual is already a GP Locum Scheme member. If a GP Locum regularly works for an Out of Hours Provider in a non-deputising role (i.e. non locum role) this work must be recorded on the form GP SOLO and not on forms GP Locum C and D. There are no changes to the arrangements for GP Practice based on GP Locum work for 2005/06. This work must continue to be recorded on form GP Locum A and B. Following information received from the Department of Health the NHS Pensions Agency can confirm that PCTs and LHBs continue to be responsible for the payment of employers contributions at the rate of 14% for Practice based GP Locum work from 1 April 2005 until 31 March 2006. Further information about GP Locums can be found on the GP Locum webpage on our website. 7. Non-GP Partners Subject to the Amendment Regulations coming into force on 5 April 2005 all non GP Partners in GMS are now eligible to join the NHS Pension Scheme. The PCT/LHB is the employer for NHSPS and NHS Injury Benefit Scheme purposes and is responsible for pension records. Non GP Partners accrue NHSPS membership on a whole-time officer basis. They must agree their pensionable pay, on the basis of their partnership share as specified in writing with the PCT/LHB. The PCT/LHB will need to collect non GP Partner contributions through agreed deductions from the Practice global sum. Practices must not complete pension records (i.e. forms SS10/SD55) or enter contributions on form GP1. The PCT/LHB will investigate any disproportionate change in the non GP Partner’s share that may have impact for Scheme benefits. Like GPs, non GP Partners will be entitled to NHS Injury Benefits but not redundancy benefits under the NHS Compensation Scheme. All non GP Partners in GMS should join the NHSPS form 1 April 2004 or, if they joined the practice after that date, from the date they joined. Arrears of contributions must be collected by the PCT/LHB and shown on form RFT1. Non GP Partners may of course choose to opt out of the NHSPS if they wish, using form SD502. It is recommended that PCTs/LHBs retain a copy of the form SD502. Any tax queries should be referred to the local tax office. 8. Frequently asked questions. Over the past few months the Pensions Agency has received numerous enquiries from Employing Authorities, Out of Hours Providers and existing and potential Scheme members in respect of changes to the Scheme arising from the GP Contract. These ‘FAQs’ (and the answers) are at Annex ‘D’. Enquiries Any enquiries about this newsletter should be made to your usual Pension Centre contact. Yours sincerely
Paul Wilson Assistant Director of Communications
Annex A – Out of Hours Provider application form – click here to view Annex B – End of Year Certificate and Supplementary Explanatory Notes – click here to view Annex C – Form GP SOLO – click here to view Annex D – Frequently Asked Questions
ANNEX DFREQUENTLY ASKED QUESTIONSQ Once the Regulations are in force will overtime be “pensionable” for salaried employees of a GP co-op? A Salaried (non-GP) members of the NHS Pension Scheme (NHSPS) are referred to as Officers. An Officer can “pension” up to an aggregate of whole time. This means (assuming the basic working week is 37.5 hours) that a person working part time on a basic 20 hour week can pension up to a further 17.5 hours if they are asked to work extra hours, but no more. Q Who sets the basic working week (i.e. standard hours) for GP co-op staff and can a GP co-op set its own standard hours of 42 hours a week? A An employer is responsible for setting the standard working week for staff. The standard working week should be stated in an individual’s contract of employment. If the standard working week is 42 hours then any pay up to 42 hours is pensionable; any pay in excess of 42 hours is not pensionable. GP co-ops should seek independent legal advice if they are unsure about setting terms and conditions of employment. Q We are an Ambulance Trust who has entered into a contract with a PCT to provide OOHs services. From October 2004 we have employed salaried GPs (under a formal contract of employment) to perform OOHs; can these GPs be pensionable and who is responsible for pensions record keeping etc? A Once the relevant legislation is in force, expected on 5 April 2005, salaried GPs employed by an Ambulance Trust will be pensionable. Their NHSPS membership must be backdated to October 2004 and they will be classed as Assistant Practitioners. The Trust is responsible for completing the relevant pension forms (i.e. SS14, SD55 etc) and the employer/employee contributions are sent via the form RFT1. If the GP decides to opt out of the NHSPS they must opt out of all their other GP pensionable posts. Q We are an OOHs Provider who believe will be eligible to become a NHSPS Employing Authority (EA). We wish to backdate our membership of the NHSPS as an EA to 1 October 2004. Will we be allowed to send in arrears of employer and employee contributions in April or May of 2005? A Yes; but remember that you must apply for retrospective Employing Authority status by 30 June 2005 and must only send in contributions to the Pensions Agency for your employed staff. Contributions in respect of GPs (including GP Locums) must be sent via the GPs host PCT/LHB via the Practice account (pooling) or via the forms GP SOLO or GP Locum C and D. Q We are an OOHP who hope to become a NHSPS Employing Authority however we employ staff and also engage the services of GPs to perform “in hours” NHS work such as covering afternoon surgeries. Can our “in hours” staff join the NHSPS? A Yes; as long as your staff (or GPs) are performing NHS (“in hours”) primary medical services they can join the NHSPS in exactly the same way as your “out of hours” staff or GPs can. Q We are a GP co-op who believe will be eligible to become a NHSPS Employing Authority (EA). We are concerned that we may have problems with our employees NI contributions and tax relief in 2004/05. A NI contributions and income tax matters are the responsibility of the Inland Revenue and the Pensions Agency cannot answer any questions on their behalf. Q We are an OOHP that believes will meet the eligibility to become an Employing Authority. Can our Medical Directors (who are also GPs) ‘pension’ their Medical Directors earnings, and if so, how? A Medical Directors can be members of the NHSPS but they must be formally employed by the OOHP in the same way as the other staff. NHSPS membership is triggered by the OOHP sending in a joiner form SS10 to the Pensions Agency. The form SS10 provides personal information including the standard working week. The OOHP will also have to provide the following information to the Pensions Agency on an annual basis: i) the Directors total pensionable pay from April to March ii) their actual hours worked from April to March (i.e. 10 hours pw x 52 = 520) iii) the whole time rate of pay from April to March If the Medical Director is also an OOHs GP the GP earnings must be either paid into the Practice account or recorded on the new form GP SOLO (see below); they must be kept separate from the Director earnings. A Medical Director can elect to have his or her net pay paid into their Practice account rather than their own account however those earnings cannot be ‘pensioned’ twice. Q Why do we need to complete a form GP SOLO every month per GP; can we not just pay GPs a fee for their services and let them pension it themselves? A Some GPs will prefer for their “fringe” fee based earnings to be paid into the Practice account (i.e. pooled); if so, a form GP SOLO must not be completed. Pooled “fringe” income is recorded on the end of year Certificate and regarded by some as simpler (i.e., less paperwork) than completing a form GP SOLO every month. However, prior to GP “fringe” earnings becoming pensionable many GPs preferred for their “fringe” NHS earnings to be paid into their own bank account rather than through the Practice and this right must be maintained. The reason that the form GP SOLO has to be completed (per GP) on a monthly basis from April 2005 onwards is to comply with the 1995 Pensions Act and other pensions legislation. Q Can the new form GP SOLO be used to backdate a GPs “fringe” (i.e. board, advisory, OOHs) NHS pensionable earnings? A The form GP SOLO is intended for GPs who do not wish to pool their “fringe” NHS earnings earned under a fee based contract for services arrangement. From April 2005 the form GP SOLO must be completed on a monthly basis by the GP and the “fringe” employer and then forwarded to the host PCT/LHB. Only one form GP SOLO (rather than up to twelve) is required to record retrospective “fringe” NHS earnings from 1 April 2004 to 31 March 2005. Q Can the form GP SOLO be used by a GP to record NHS hospital work? A Yes, but only if the GP is paid under a fee based contract for service arrangement. If the GP is formally employed under a contract of employment he/she is classed as a part time or whole time officer and the hospital must send in a joiner form SS10 and form SD55. Q Can the form GP SOLO be used by a GP to record non-NHS (i.e. private nursing home) work? A No, this type of work cannot be “pensionable” in the NHS Pension Scheme. Q How does the Inland Revenue earnings cap apply under the new GP Contract? A It is expected that the IR earnings cap will disappear in 2006 to be replaced by a lifetime fund value limit. GPs affected by the current earnings cap must ensure that, whilst their actual earnings can exceed the IR cap, their total NHS pensionable earnings must not. The IR cap for 2005/06 is £105,600.00 Q What is the position on maternity pay in respect of salaried GPs (including retainers and flexible career GPs) employed by a NHSPS Employing Authority? A Maternity pay is pensionable and the individual pays employee contributions based on the actual pay they are in receipt of. Employer contributions are based on the individual’s pay before it reduced. For further guidance please contact your Pensions Centre at the Pensions Agency. Q Can non-GP Providers (i.e. non GP Partners) in GMS or PMS “pension” their PCT Executive Committee (PEC) allowances. A No. Up until recently only GMS GPs could “pension” their PEC earnings. The Dept of Health had previously advised that PMS GPs PEC work should be reflected in their PMS contract. Once the NHSPS Regulations are amended GMS, PMS and ‘career OOHs GPs’ will be allowed to “pension” their PEC allowance. Q Will collaborative payments made to GPs be “pensionable” once the Regulations are amended? A Yes; but only if the PCT/LHB has a collaborative arrangement with a local authority in accordance with section 26(4) of the Health Act of 1977 and the payments are made direct to the GP by the PCT/LHB. Collaborative payments form part of the GP’s accrued practitioner benefits. Income derived from “blue badge” work does not fall under section 26(4) of the Act. Q If GPs can now “pension” NHS board work once the Regulations come into force will they be classed as Practitioners or Officers by the NHSPS. A If the GPs are paid a fee under a contract for services arrangement this fee will either be pooled into the practice account or will be recorded on the new form GP SOLO. Whichever option is chosen the work is afforded Practitioner NHSPS status. If, however, the GP is employed (under a formal contract of employment) by a Trust, PCT, or LHB to be an executive director, clinical lead, etc then the GP is afforded part time Officer status in the NHSPS triggered by a joiner form SS10. Whilst for tax purposes an “office holder” is regarded as an employee, the NHSPS Regulations define an “Officer” as someone who is actually employed by a NHSPS Employing Authority. Q Will the end of year Certificate that every Partner must complete take account that every Practice does not operate an April to March financial year? A Yes, the Certificate has been designed by medical accountants appointed by the BMA and the Dept of Health and takes account of different year-ends. Q Are appraisal payments made to GP Locums pensionable? A No. Under the amended NHSPS Regulations GP Locums can “pension” essential services, additional services, enhanced services, dispensing services, out of hours services, commissioned services, certification services and collaborative services. Q Can GPs over the age of 60 “pension” their GP co-op earnings? A Yes, but only if they are already an active NHSPS member elsewhere and not in receipt of Scheme benefits. Q How will the over (or under) payment of pension contributions in respect of GPs affect tax returns? A It is the Pensions Agency’s understanding that the Inland Revenue will still expect self employed GPs to complete their tax returns by January following the tax year-end. GPs will have, by this time, finalised their NHS pensionable pay and paid any arrears of contributions.
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