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Government publishes proposals to end GP pensions discrimination

The Government has published a set of proposals it says should alleviate age discrimination against GPs who were moved onto a new NHS pension scheme in 2015.

Under the proposals, GPs on the NHS pension scheme who were moved from legacy pension schemes in 2015 to new pension schemes would be able to choose which they receive benefits from in the period between April 2015 and March 2022 (the ‘remedy period’).

The proposals are set out in a consultation published yesterday by the Treasury.

Changes to public sector pensions introduced in 2015 meant some GPs on the NHS Pension Scheme faced ‘huge financial losses’ on retirement, according to the BMA.

As part of the reforms, older GPs nearing retirement age were allowed ‘transitional protection’ to stay on their existing pension scheme, while younger members were automatically transferred to the new scheme.

However, public sector groups, including the BMA, took the Government court on the grounds that this discriminated against younger members and the Government has since acknowledged that it will have to make remedies across a number of affected schemes, including the NHS Pension Scheme.

The proposed measures announced yesterday by the Treasury would allow effected GPs to ‘choose between receiving legacy or reformed scheme benefits in respect of their service during the period between 1 April 2015 and 31 March 2022’.

The Government says this is fairer than simply moving every member affected back to the legacy scheme, as although this would remove the discrimination identified by the Courts, some will actually be better off under the reformed scheme.

In addition, the consultation seeks views on whether members will be expected to choose which option they want to take straight away (in the year or two after the remedy period) when there may still be some uncertainty as to the precise benefits to an individual, or at the time they start drawing their pension.

For those already retired and/or receiving a pension, the choice would need to be made ‘as soon as practicable’ after the changes are implemented and the decision applied retrospectively to their award.

Commenting on the proposals, Deborah Wood, chairman of the Association of Independent Specialist Medical Accountants (AISMA) said: ‘This is a positive development for doctors who are members of the 2015 NHS Pension Scheme.’

She added: ‘For doctors the permutations are numerous, with consequences for revised tax calculations on pension growth. We will be responding to the consultation in due course, once our pension experts have undertaken a thorough analysis of the proposals outlined.’

Ian Macvie, pension and retirement technical manager at Wesleyan, said: ‘What the government has proposed appears to offer a reasonable degree of choice. However, the devil is in the detail, and for really high earners there could be potentially significant tax considerations around the lifetime annual allowance and annual allowance that could require complex financial planning.’

Stakeholders are required to submit their responses to the consultation by 11 October.

This story was amended on 20 July to correct the statement that 2015 pension reforms switched GP NHS pension schemes from final salary to career average earnings schemes

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