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Managing the change in locum superannuation funding

Bob Senior explains how to mitigate the costs that will arise from practices’ new responsibility for handling locum pension payments

When the demise of PCTs was announced, many wondered how superannuation for locums would be dealt with from 1 April. One option would have been for the NHS Commissioning Board to take on the role, dealing with superannuation and paying employers’ contributions, but the Department of Health chose to dump this task on practices instead. The amount previously held in PCT budgets for employer superannuation for locums will be added to the global sum and shared between all practices. The GPC suggested that funding should be distributed to practices through increasing global sum equivalent (GSE) payments, and the department has adopted this approach. The combination of the contract uplift of 1.32% and the locum employer superannuation funding both being added to GMS GSE payments, will provide all GMS practices with an increase of 1.47%.

Passing this responsibility to practices has two effects. First there is the financial impact and the practicalities of handling administration and making payments. Initial estimates suggest an average practice might see £1,500 go into their budget scaled for list size.

Second, although the funding will be shared, not all practices use locums to the same degree. Larger practices are often able to use fewer locums because the absence of a single GP is not felt as acutely. Likewise, some practices are better at planning holiday absences. Practices where all the doctors have children at school, and overlaps of holidays are unavoidable, no doubt find it much more difficult to avoid locum costs.

What GPs can do

The advice I am giving my GP clients is that they have four options.

They can:
• absorb the extra 14%
• negotiate a 14% reduction in their sessional rate
• agree a reduction that shares the cost
• be nice to retired GPs who do locums, since there is no 14% to be paid for them.

In areas where locums are hard to find, the first option is probably the only choice.

Note that female partners who are intending to take materinity leave also need to recognise their costs may go up. 

Bob Senior is chair of the Association of Independent Specialist Medical Accountants and head of medical services at RSM Tenon

Readers' comments (11)

  • There is no way I will reducing my sessional rate !

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  • There is no way I will be reducing my sessional rate !!!

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  • But the GP is not the employer

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  • The worst aspect of this ludicrous change to funding (speaking as a full time locum) is the fact that I was only given 2 days notice that it was definitely happening.
    We are told that there will be new locum A and B forms - not yet available.
    The PCT dept. where I send my pension payments apparently knok nothing.
    Most of the practices I work for were unaware of the changes.
    I am already charging a pre-negotiated fee for all current work.
    I am now expected to go to those same companies and tell them my fee is increasing by about 12%. This is unprofessional and would be un-necessary if we had been given a year's notice of what the exact changes would involve. Even my accountant is a bit stumped by this one.
    Also this means that retired GPs who do locum work will win again whilst keeping their full pension in tact and younger GPs who actually do this for a living will either reduce their income (paying 25% of their earnings to their pension), opt out of the pension altogether or do something else - not a great way to encourage 'young blood' in to the profession is it?

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  • Anonymous | 02 April 2013 10:28pm
    But the GP is not the employer

    Neither was the PCT, but it still had to pay it

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  • For Jerry Alderson and others:
    Locum A & B forms are now available at:
    http://www.nhsbsa.nhs.uk/Documents/Pensions/GPLocum_A_(V7)_-_03.2013.pdf
    http://www.nhsbsa.nhs.uk/Documents/Pensions/GPLocum_B_(V7)_-_03.2013.pdf

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  • I guess the new Form B is evidence itself that the switch process has had to be rushed, as it still says "For PCT Use Only" at the bottom!

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  • Luke Bennett

    A small crumb of comfort. As only 90% of the locum fee is pensionable, the employer pension contribution is 12.6%, not 14% of the total fee.

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  • With increasing expenses & staff expense and minimal pay rise my guess is that locum use will be reduced by practices & there will be increased competition and decrease in locum fees.
    It was suggested by one lead LMC members that locums may get decreased fee by 14% or current fees will be inclusive of 14 %.

    In summary locum market will dictate fees

    It should be noted that in case of retired GP locums & agency staff , 14% increase does not apply

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  • More time would have helped better organising particularly for small practices as they very heavily rely on locums to cover ansence than a large practice.

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