NHS (Pension) Health Check

It’s that time of year when everyone is going through the routine of finalising tax returns, worrying about January tax payments and – hopefully – then thinking about ensuring their pension certificates are submitted, processed, and updated with NHS Pensions.

I have written numerous articles on superannuation over the years, but they have focused on different, more specific issues. What I wanted to cover this time around is a bit of guidance concerning what everyone should be doing both now and annually. The title I have chosen is really a nod to the Health Checks that GPs and Nurses may be performing on patients as they move into their 40’s. It seemed to fit with getting the message out to people in the NHS that they need to be active in managing their pension.

I found a leaflet on the NHS Health Check and to paraphrase the first part: -

Aged 40 – 68? Even though you might be feeling great (about your pension), if you’re over forty you may be at risk of … having an incomplete record, missing years or other issues with your pension record that will become increasingly difficult to resolve as time goes by. An NHS Pension review will help you reduce these risks and make sure that you receive the correct pension when you retire.

The parallels continue, I assume, to the reasons as to why GPs don’t look at their pension records. It is the same as to why patients don’t come in for Health Checks.

“I’m only young and I don’t need to worry until I am in my 60’s about my pension.”

“I signed up when I first joined the NHS and other people ensure everything is recorded as it should be.”

Since the 2004/05 “new” contract was introduced, it has been the responsibility of a GP (or other non-GP) partner to submit an annual Type 1 certificate of pensionable earnings that needs to be processed and accepted before making it on to their NHS Pension record. However, this “Self-Assessment” approach was expanded to salaried GPs in 2009, and now they are also fully responsible for submitting an annual certificate, a Type 2 certificate. Other employed NHS staff will have their pension information reported monthly by their employer and should just be able to review their annual pension statement to ensure it has been updated.

So, the notion that someone else is dealing with it falls down for salaried GPs as they need to prepare and submit the Type 2 certificate by 28^th February in the year following the end of the relevant tax year. (So, for 2021/22 this should be completed by 28/02/2023)

Salaried GPs should be liaising with their employer and ensuring that pension is being deducted at the correct tier rate – I have seen multiple occasions recently where a GP has increased sessions and/or pay whilst either the tier rate or the monetary value of pension deducted has remained the same. Whilst the employer should be ensuring the correct amount is deducted, if this does not happen it could leave an uncomfortable conversation later if there are £1,000’s of pension deductions that need to be taken retrospectively from an individual salaried GP.

As with everything nowadays, there is a lot more emphasis on the individual being responsible, from HMRC having self-assessment tax returns to self-checkout tills at the supermarket. After submission of the certificate, we then need to transfer to dealing with PCSE and NHSBSA as well as NHS Pensions. Everything now seems to start with the individual and then has to flow up the information chain, from pensions to performers’ list. From annual certificates to a leaver notification, it is your personal responsibility to begin the process and ensure that it has been completed.

It is easier for us to get things in order for GP Partners, as we tend to act personally for them and if we are preparing their Tax Return this then flows into preparing their pension certificate and we are aware of any missing certificates or problems with PCSE processing them. Although we do have some issues to resolve, especially in respect of those we inherit when taking on a new partner or practice.

The time-bomb is with the salaried GPs though, as we do see multiple years still unresolved within a practice when we are reconciling their payroll records. We are somewhat toothless in trying to resolve these situations as we can advise practice managers that they need to get their salaried GPs to submit pension certificates, but I know they also hit a brick wall with this, as often, those same salaried GPs do not know they need to submit a Type 2 certificate as they think it has been dealt with by their employer.

My final message is that checking on your pension’s health is not something you should put off. Make sure you set aside some time to review it now. If you are not up to date then find out the steps you need to take to get everything current. Once you are current, then make sure you add it to the other things you review annually.

As with your health it is much better to catch things early and try to resolve them. Imagine trying to fill in 20 years’ of gaps in your record and being asked for pay slips from a post you held at a surgery that no longer exists.

Here are some links to earlier articles which may help if you want some more insight: -

https://www.rbp.co.uk/news/how-to-deal-with-salaried-gp-type-2-end-of-year-pension-superannuation-adjustments

https://www.rbp.co.uk/news/pcse-online-how-to-fix-common-issues

https://www.rbp.co.uk/news/making-sense-of-the-superannuation-scheme-webinar

https://www.rbp.co.uk/news/pension-and-the-pcse-a-new-hope