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Why's my pension payment rising?

Our experts answer your pension queries ­ on extra payments and the top-up options available

Could you please explain why I will have to make an extra superannuation payment for the 2004/5 financial year? Also will my added years payments be affected?

A. Under rules introduced from April 2004, principals' superannuable income is calculated differently. Up to then the deductions were calculated monthly, based on a percentage of GMS or PMS earnings. Since the PCT, as paying authority, knew exactly what these were, a line could be drawn after the year-end.

Now superannuation is calculated based on all NHS profits rather than just PMS/GMS earnings. This is to the advantage of GPs and will result in increased pensions.

Accurate profits cannot be calculated until after the financial year-end as accounts for the relevant year are required. Accountants also have to ensure all NHS income is included and the relevant NHS expenditure has been deducted. To make this even more complicated the calculations will be unique to each partner.

Practices have been making monthly payments on account from April 2004 based on an estimate of profits. This is not an exact science yet! Once figures are finalised and agreed (probably in late 2005 or early 2006), any under/overpayment must be rectified.

This will include employers' as well as employees' payments making a balancing payment/refund of 20 per cent of any under/overestimate of NHS profits.

Your added years payments will be affected. But there is no employers' contribution for these so you will only pay your usual added years percentage of any extra NHS profits. In the event that you underestimated NHS profits, you should receive a rebate.

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