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Locum GPs set for ‘discriminatory’ pensions rules from next week

Locums could face increased pensions bills from next week due to ‘discriminatory’ changes to the rules on contributions, the BMA has warned.

The BMA’s GP Committee said they have been having ‘repeated correspondence’ with NHS Pensions around the ‘annualisation’ of pensions contributions, which would see all locums being placed at the highest tiers of pensions contributions.

Pulse understands the BMA and NHS Pensions have been meeting regularly to discuss the new rules, but the pensions body has not heeded warnings of potentially negative consequences for GPs.

From April, it is understood that GP locums in the 2015 NHS pension scheme will no longer be able to take breaks between sessions – even one day – as this will result in their pension being automatically annualised, meaning they would almost certainly be required to pay 14.5% in contributions.

Under the current scheme, locums are allowed to stop working for up to three months – against one month for salaried GPs who are part of the scheme – before they are subject to annualisation.

But following a consultation on proposals to change NHS pension scheme regulations the Government decided to remove the three-month rule so that all members of the scheme have their tiered rate calculated using the same rules.

GPC sessional pensions lead Dr Krishan Aggarwal told Pulse: ‘The BMA responded to the Department of Health and Social Care consultation on NHS pensions, significant concerns were raised particularly around annualisation however, no changes were made. 

‘In fact, from 1 April 2019, the annualisation rules become much worse.  We have had repeated correspondence with NHS Pensions however, it is still not clear how the new rules being introduced on 1 April will work and what the impact will be on GPs.

‘It is crystal clear however, that the changes to annualisation being introduced will unfairly penalise any GP that opts to take a break within the pension scheme year as they will then have to pay pension contributions at a higher rate based on their imaginary annualised earnings, rather than their actual earnings.  We continue to believe that annualisation of GP pensions is unfair and discriminatory. 

‘In the midst of a workforce crisis with worrying declines in both GP recruitment and retention rates and the ongoing delays in processing pensions payments by PCSE, this is a further pension pressure which will only exacerbate the situation by further damaging the morale of the GP workforce.’

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The BMA previously warned against the removal of the three-month rule, as it will discriminate against GP locums, many of which are from groups who have legally protected characteristics (ethnic minorities, women, and those with disabilities), and who are less likely to be in the scheme for a full year.

National Association of Sessional GPs chair Dr Richard Fieldhouse agrees the move will discriminate against locums, especially pregnant women who are more likely to be off work for a longer time.

He said: ’It’s discriminatory against certain people, such as pregnant women, and outrageous to people who have to go and care for parents or children. A lot of people locuming are trying to find the right partnership or salary, using it for good reason or they are locuming because they could retire but are trying to help out struggling practices so they do extra locum work. And all these people are going to be penalised.’

Mr Fieldhouse said he believes it will also push a number of locums to leave the scheme and stop them from doing sessions.

‘I think this will backfire and this is a totally uncreative solution to the problem they have got,’ he added.

The DHSC argued keeping ‘such exemption would place locums in a significantly advantageous position compared to the rest of the scheme membership who would have their earnings annualised if they had a break from pensionable employment, no matter the length of the break’.

It said: ‘The Department has carefully considered the suggestion that locum GPs are more likely to be from groups with legally protected characteristics.

‘The research the Department has seen does not support this proposition; notwithstanding this, the Department considers that, if locum GPs were to be from such groups, removing the exemption is justified as exempting locums would place them in a significantly advantageous position.’

Pulse understands the GP locum guidance on pensions will be updated next week.

Example: How much will a locum pay for their pension?

  • A locum provides holiday cover for a local practice.They work eight sessions a week through the school holidays, each session being paid £250.
  • Their actual annual income is £26,000 but their annualised income is £182,500.
  • Instead of paying 7.1% of their income into the NHS Pension scheme, they will pay 14.5%, which amounts to £3,700 instead of £1,806.

Source: Leeds LMC chair Dr Nicola Hambridge, UK LMC Conference 2019