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NHS Pension Consultation - Have Your Say

on Monday, 14 January 2019.

On 18 December 2018, the Department of Health and Social Care published its consultation on the proposed changes to the NHS pension scheme regulations. We summarise the main changes being proposed.

The full details of the consultation together with guidance and draft amending regulations can be found here.

What Are the Proposed Changes?

The consultation document lists the main proposed changes as the following:

  • Implement a new contribution rate of 20.6% for employers from 1 April 2019 (see paragraph 2.4 below for further information on funding of the increase) and renew current employee contribution rates so that the same rates continue to apply beyond 31 March 2019;
  • Following the Supreme Court judgment in the case of Walker v Innospec Ltd ([2017] UKSC 47), civil partners and same sex spouses will have the same survivor pension rights as widows;
  • Extend existing forfeiture rules so that the Secretary of State may suspend pension benefits if a member or other beneficiary is charged or convicted with an offence that may lead to all or part of those benefits being forfeited;
  • Update provisions relating to 'contracting-out' from the second state pension so that these are in line with revised HM Revenue & Customs and Department for Work & Pensions legislation;
  • Exemption from controls on final pensionable pay, any pay increases which result from a nationally agreed Agenda for Change pay award;
  • Make miscellaneous and consequential amendments to scheme rules, in particular relating to the provision of a statement of estimated pensionable income/contributions; and
  • Make other changes that were presented in a previous consultation in November 2017:
    • Remove the nomination requirement to nominate unmarried cohabitees for survivor benefits; and
    • Miscellaneous corrections and refinements to improve the operation of scheme rules.  These include, but are not limited to, the following:
      • All GMS/PMS practices, APMS contractors and GDS/PDS must provide the host Board a statement of the annual estimated pension contributions due no later than one month before the start of the Scheme year. NHSE or the LHB must be in possession of the form outlining the estimated pensionable income in respect of relevant medical and dental practitioners and non-GP Providers by 1 March of the preceding Scheme year.
      • If a practice or an APMS contractor fails to provide a statement of estimated contributions by the required date, the amendments allow the host Board to determine the estimated pensionable income and to deduct member contributions at the maximum contribution percentage rate (currently 14.5%) specified in the Regulations. Where it subsequently transpires that pension contributions have been deducted at a higher rate than would have been due if the statement had been provided, arrangements are in place for appropriate adjustments to be made during the Scheme year.
      • Where a GP or non-GP Provider has failed to pay over their NHSPS contributions, paragraph 10(2)(b) of Schedule 12 allows NHSBSA to recover these arrears from their NHS pension benefit, usually at retirement. The amendment streamlines the recovery of arrears by replacing the current requirement for ‘member consent’ to be obtained for recovery from benefits, with a simpler duty for the Scheme Administrator to “notify the member”.
      • Amendments to the National Health Service (Injury Benefits) Regulations - in respect of lump sum payouts to a nominated partner or child or adult dependent - replacing the term "nominated partner" (and the requirement to nominate) with a "surviving partner".  

The consultation invites comments and views on the proposed changes. Specifically, it poses the following questions:

  • Whether the proposed amendments deliver the objective set out in the consultation document and if not why? 
  • Whether any changes are needed to ensure the proposed amendments deliver the policy objectives. 

It also asks for any general additional comments with regards to the proposed amendments. 

The consultation closes on 28 January 2019 and details of how to submit comments can be found at the above link. 

For more information, please contact Mark Jarvis in our Healthcare team on 020 7665 0880.