Pension and the PCSE - A New Hope?

There have been several changes over the past couple of years concerning GP Pensions and I know from the conversations I have with GPs (on an almost daily basis) that this is an area of real concern.

Whilst RBP, as accountants, cannot offer advice concerning GP’s membership of the scheme – as this is financial advice and only licensed financial advisers can give detailed analysis – we are still at the front line when it comes to queries from our clients.

I think a lot of this is down to the switch from local superannuation teams to a more centrally focused PCSE. There appears to be a lot of criticism falling onto the PCSE as it is completely different to what GPs are used to having to deal with. However, I think some of these negative comments are not the sole responsibility of the PCSE as they have been battling to centralise and standardise a system that has been adapted by local area teams for over 10 years. The area teams were good at dealing with what was in front of them, but a standard approach across the whole NHS has meant that the PCSE are now bearing the brunt of issues raised as their way of dealing with things is more corporate.

GP practices are at the frontline, dealing with patients, and it is an interesting comparison that practices are having to find better more interactive ways to communicate with their patients whereas the PCSE have been led by the NHS and DoH to centralise everything and make communication more remote – these two ways of operating appear to be going in separate directions.

However, in reviewing what the PCSE have implemented then you can see that some areas have definitely improved, the website and FAQ’s is one of those areas that is definitely better and I find incredibly useful. There are lots of questions and solutions to problems but I can see why GPs may find this difficult to follow and understand – it is like asking me to use the GMC website to review and write an article on a new medical procedure.

With all the information available I thought it would be useful to summarise an annual timeline so GPs are aware of what to expect when and whether they should be chasing anyone to make sure their record is up to date. I will use the tax year as a reference point as this is what RBP will use when updating our information.

April – RBP will contact you to ask for information for your tax return. We will need superannuation details of all NHS income.

Salaried posts we will need the P60 and the last payslip; GP Solo posts we will need the monthly or annual GP Solo statements and locum work we will need the summary of locum A&B forms (Annual summary from your locum organiser software, if applicable) If you are not sure of how an income stream has been pensioned then send us as much information as you have so we can review this. It is also worth having a discussion before you undertake new work if you are unsure as to what will be happening with regard to pension treatment. It is easier to resolve at the start rather than trying to unpick it afterwards.

August – Your Total Rewards Statement (TRS) should be available on the NHS Pensions website on or before the 31^st August, so that you can log in and access this. There are exceptions for these not being readily available which are generally for more complex certificates that include added years or a GP has been divorced. If this is not relevant to you and there is still no statement visible then there are most likely gaps in your history that will need to be resolved before a Total Reward Statement is generated. The PCSE will contact you to advise what needs to be processed to move this along. If you have an updated statement available please forward it to us (or your own personal accountant).

September – January NHS Pensions will be in the process of generating the pension’s certificate for the previous year that will be due to be submitted by 28^th February. The ideal scenario would be for this to be released in September to enable us to prepare for any changes and set up systems in a timely fashion. In reality the certificate has been delayed in the last two years and was not released until the latter part of January which leads to a much tighter turnaround to complete the certificates.

February – Certificates will be sent to GPs to review and confirm they are OK before they are submitted to the PCSE via their portal – these should be processed and adjustments made on the March Open Exeter statement. Last year the deadline for submission was extended from 28^th February to 4^th March after the portal crashed on the last Friday of February. There was also a deal agreed between the PCSE and NHS Pensions that all historic and amnesty forms (for salaried GPs) would be processed first as NHS Pensions wanted to catch up the backlog of missing information. Therefore the 2017/18 certificates have been put on hold to process this backlog.

March – The 1^st March is when each practice has to submit their annual certificate of pensionable profits for the next financial year. This is an annual requirement and needs to be submitted even if there are no changes.

Also, on the March Open Exeter statement there should be adjustments to the pension payments to show that the certificates have been processed. If this is not the case, then I would review the PCSE FAQ’s to see if this is because of a general issue and if not I would raise a query with them.

This information is true for both GP partners (Type 1 certificate) and salaried GPs (Type 2 certificates) with the exception of adjustments made on the March Open Exeter statement. Any adjustments on the Type 2 certificate need to be discussed with the practice you performed the work at and an adjustment to their payroll will be needed.

Annual Allowance - This is the amount of pension growth you are allowed to have. If exceeded then there is a potential tax charge that may become payable. This is either payable personally or you can elect to ask the scheme to pay this on your behalf. This will have knock on effects to your pension pot as the tax payment and interest payments on this amount will be charged against your pension pot.

The timeframe for the annual allowance is tracked to the tax year as well. RBP will review your position when we prepare a practice’s annual accounts. At this stage there will be several areas that will be (or could be) estimated. We can calculate what your pension input for the current year will be and provided we have your Total Rewards Statement we can use this to input your opening pension value. We need the CPI at September to be able to calculate the growth of your pot. If we have the opening balance, CPI at September and your pension input for the year then our estimate will be a lot more accurate.

If the pension scheme deems that you are in danger of having an annual allowance tax charge they should issue a letter to you detailing your position. This Annual Allowance Statement should be sent to you in September. If you receive one of these letters, then please forward it to us (or your own personal accountant).

When we prepare and submit your tax return we will then be able to assess if there is a tax charge relating to the Annual Allowance. We then have until 31^st July to submit a scheme pays election if that is what you choose to do – that will depend on your choice which will probably be governed by the amount payable and normal tax bill payments made in January and July. If you are retiring from the scheme to draw your pension please raise this with your tax manager as the scheme pays option may need to be submitted sooner!

Summary

In summary I would advise all of our clients to provide as much information as possible when it comes to income you receive that is pensioned (Payslips, GP Solo forms etc.) as then we can update your information as fully and accurately as possible.

Also be aware of the times in the year that NHS Pensions should supply you with information:

• 31^st August = TRS
• September = Annual Allowance, or you should send information to PCSE
• February = annual certificate for previous year
• March = estimate of profits for the next year

Hopefully this summarises the position for you, but if you have queries concerning treatment of pensionable income please ask us sooner rather than later so we can get ahead of any potential issues or queries after we complete your certificate.