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Practices to pay £23 pensions 'admin fee' per employee

CORRECTION: This article initially suggested that the Department of Health had calculated a £235 average fee per pension scheme member. The correct figure is actually £23. We apologise for this mistake and any confusion caused.

GP practices will have to pay an employer administration fee to the NHS pension scheme under new plans proposed by the Government to raise £35m a year.

The Department of Health’s consultation, launched today, said the levy - estimated to be an average of £23 per member - would pay for the administrative work relating to handling of pension contributions on behalf of employers.

It will apply to all types of NHS employers ranging from GP practices to large hospital trusts, but the GPC told Pulse it is pushing for the expense to be reimbursed as part of contract negotiations.

The DH proposes that instead of a flat fee, which would unfairly disadvantage smaller employers such as GP practices, the rate should be a percentage of each employee member’s pensionable earnings.

The document says the final figure will be set by health secretary Jeremy Hunt but suggests 0.08% as an example that would raise the required amount over the course of the next two years.

The DH says the easiest way to collect the levy would be to add it to the monthly standard employer contribution.

’For instance the current rate of 14.3% would be increased marginally to 14.38% to collect a levy of 0.08%,’ the consultation document says.

Under the plans, proposed to come in from April next year, each employer would include a record of the amount of scheme administration levy payable in respect of each member as part of its annual statement to NHS Business Services Authority.

Late payment would accrue interest and an added administration fee, the document further suggests.

On the size of the fee, the consultation said: ’The levy rate will be set by the Secretary of State for Health, as the responsible authority for the scheme, assisted by advice from the NHS Pension Board.’

But it added: 'The Department and NHS Business Services Authority (NHS BSA) forecast that the levy would need to raise £35 million per year for the two year period 2017-18 to 2018-19. This translates into a levy rate of 0.08% of active member pensionable pay.

'Spread across the scheme's 1.5 million active members, the administration cost is an average of around £23 a year per active member.'

It said the rate 'will be reviewed during 2018, together with the standard employer contribution as part of the scheme valuation process', with a new levy rate to be set for the four year period 2019/20 to 2022/23.

Over time, the levy rate 'is expected to reduce as one off costs such as Guaranteed Minimum Pension reconciliation pass through and the benefits from NHS BSA's efficiency and digital projects come on stream', the consultation added.

GPC deputy chair Dr Richard Vautrey said that 'the number of staff members per practice will vary considerably based on their size and also not all practice staff members will be members of the pension scheme'.

He also said the DH's average figure may not be representative for GP employees as it is an average across the whole pension scheme which 'may not reflect the same workforce mix of a practice'.

He added: 'We were aware of this consultation and, as we did with last year's expenses uplift which included new costs such as this, we would insist that NHS England and DH factor this increase in to practice expenses calculations if it is implemented following the consultation.

'Practices cannot afford any further cost pressures without them impacting on the services they provide or even the viability of the practices itself.'

 

 

Readers' comments (41)

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  • Soon to become a £ 335 then £ 435 ..... "fee" . It is an additional tax pure and simple. The Hunts that propose this are sharks . Pay it once and they will sniff blood in the water and will return for more . And more . And more . Until nothing is left .

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  • Gosh, isn't partnership attractive these days?

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  • What a rip off, but let's see, how long will it be before they start charging GP's for the air their patients breathe?

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  • Where does this suddenly come from, so lets give a 1% pay rise next year and start clawing it back now with this and i suspect other things like CQC fees etc. Or why doesn't the BMA/GPC etc say No for once

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  • the BMA has severely failed the juniors with current state of affairs.
    Our own lot are even bigger idiots who have no consideration for the working lives of those they seek to represent.

    that article on here by the guy from NHSE telling us not to worry our incomes will be ok is another example of the tosh these idiots spew.

    please please please can we start talking about a new union and about new representation - look at whats happening with mr Trump - changes are afoot, and we need to make some here too, swiftly.

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  • FFS! when will govt stock sucking the blood out of Practices!? and what will my small practice with 15 members paying in £3500pa get in return? We certainly won't be seeing 15 hours a month admin time on our scheme. No, this is just a way to get practice to pay for the petty bureaucracy.

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  • In any other pension scheme I've been involved in, the employers' contribution covered the cost of running the scheme; it's not an optional extra so where does this suddenly come from if not just another raid on NHS and GP finance?

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  • This shows a clear intent to destroy general practice .

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  • Looks like I was right to opt out of the NHS pension last year and arrange my own. You can not trust the government with your pension. With 20 years ahead of me before retirement it's an absolute certainty this is just one of many 'alterations' in store over the coming years. If you can't trust politicians to fund the service why is anyone under the impression somehow the pension is safe? Beats me. They are slimey con men pure and simple. The pension is simply a ball and chain they will be using over the coming years to control employees. Someone explain how this isn't the case.

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