Doctors express anger at NHS scheme failings

With more than 1.5m active members, the scheme has attracted flack in particular from GPs, the British Medical Association and doctors’ pressure groups, although finally there are signs of improvement.

GP Survival has been running a campaign since September 2017 to highlight the mishandling of GPs’ pensions contributions stemming from NHS England’s award of a contract to Capita subsidiary Primary Care Services England in 2015, and the human impact of their failings.

NHS Pensions, part of the NHS Business Services Authority, administers the scheme, but NHS England and PCSE are responsible for collecting GP contributions and maintaining accurate pension records. 

Sometimes people contribute too much towards their pension, are owed thousands of pounds in excess contributions, and there’s currently no mechanism to claim that money back

Dr Nicholas Grundy, GP Survival

Dr Nicholas Grundy, chair of GP Survival, says: “Hundreds of people have had issues with the NHS Pension Scheme. There have been more than 400 subject access requests. Those were all people who have had problems with the scheme by definition.

“People get sick of dealing with organisations [PCSE and NHS Pensions] that don’t work together, bounce queries back and forth between one another, and make it impossible for you to know what your pension is or what you owe or don’t owe in tax at any given point.”

According to Dr Grundy, locum GPs, who fill in for absent practitioners or when practices are short-staffed, have had the most problems.

“People have sent cheques off with the relevant forms; the cheques have been cashed, but Capita claims to have no knowledge of their forms. These are people who have had money taken, but not credited to their pension,” he says. “At the moment, the proposed solution seems to be that they should just resubmit all the forms going back 10 or more years, which is not ideal.”

He says he has encountered delays of more than five months for spouses’ payments to be paid, and that communication is fraught with difficulty: “You can’t write to Capita. You have to use their online portal, which gives you a case reference number. What has been happening historically is that people open a case and it is closed again three days later, marked as resolved, with nothing done. And that has been happening 15 or 20 times over two years for some people.

“Sometimes people contribute too much towards their pension, are owed thousands of pounds in excess contributions, and there’s currently no mechanism to claim that money back.”

Tensions between employer and administrator

A Capita spokesperson says many of the scheme’s problems precede its involvement. “Historical issues with collecting GP pension data meant the systems and processes that were used were inconsistent. We are working with NHS England to address these issues, and ensure any discrepancies are identified and resolved as quickly as possible,” the spokesperson says.

The company explains that any practitioner who has historically not submitted one or more annual pensions documents will not be able to see a more recent earnings statement reflected via their total rewards pension statement.

A spokesperson for the NHSBSA says that following the appointment of Capita in 2015, “difficulties occurred resulting in NHS England being unable to update the NHSBSA with some GP pension records”. However they stress that all collected contributions have been properly allocated, and that this does not affect members’ defined benefits.

The spokesperson also concedes that some delays to pension payments have occurred: “During 2018 the NHSBSA transitioned to a new pensioner payroll system. Due to a temporary loss in processing time it resulted in some new pension benefit awards being unfortunately delayed. Where a first award was delayed, interest was payable.” 

With regards to retiring GPs or where death in service occurs, the NHSBSA has always awarded provisional NHS pension benefits, the spokesperson adds, explaining that this “avoids any hardship on the GP or their family”.

Document submission site crashes

Meanwhile, the BMA has been raising complaints about the scheme’s complexity and administration as far back as January 2017. These concerns originally centred around issues with self-assessment forms and contribution cheques not being cashed.

In a February blog, BMA sessional subcommittee deputy chair Krishan Aggarwal reveals members are still struggling with a number of forms and processes, that Capita continues to close cases before they are resolved, and raises the possibility of members incurring annual allowance tax bills due to admin delays.

An update to Primary Support Care England’s website on February 28 says that “due to the high volume of traffic to our online enquiries form, some users have been experiencing intermittent issues with the submission of pension forms”.

A spokesman for the BMA says of Capita’s administration: “This is a major problem. It has got a little better but is still not good enough. Communications are slow and poor.” 

With regards to member issues around over and under-taxation, the spokesperson says: “What’s needed is a much better and more timely annual statement.”

Annual allowance grievances emerge

Indeed, many doctors’ frustrations with their pensions are more a matter for policymakers as for administrators, centring around the annual allowance and the taper introduced in 2016.

In January, the Financial Times reported a call from the BMA to lift the annual allowance for its members, with the body arguing that the measure was leading consultants to reduce working hours at a time of intense stress on health services.

Dr Tony Goldstone, a consultant radiologist, says: “Many consultants are helping prop up front-line service with extra overtime shifts in the evenings and weekends to keep front-line clinical services running due to too few consultants in many specialities.”

“Due to the ill-conceived design of the tapered annual allowance, small amounts of additional non-pensionable income can push you over the ‘tax cliff’ at so-called ‘threshold income’ at £110,000. This can mean a single £200 overtime shift can produce an additional tax bill of more than £10,000 if this exists in the same year as a pensionable pay rise. This produces marginal tax rates of thousands of per cent, and as the overtime was non-pensionable it is of no benefit to their pension.

“Doctors are happy to pay tax like everybody else, but they cannot be reasonably expected to pay to go to work to do additional shifts on top of already long and unsocial hours. I know several doctors that have had to remortgage their houses to pay for this, and at least one who has emigrated as a direct consequence of this punitive tax,” Dr Goldstone adds.

Poor information clouds tax decisions

However, for GPs the issues also appear to concern the scheme’s record keeping. Dr Grundy says: “The pension system is in such a mess you have no way of knowing what the tax implications of your pension are from year to year.”

The annual allowance for DB is based on the valuation of the pension at the start and end of the year. Dr Grundy says: “Until recently, as far as I know, no GP has had their data updated since 2015… because NHS Pensions hadn’t [received] it from Capita to update. So people have been getting a huge annual allowance bill out of the blue, without understanding how or why that happened. They had no opportunity to plan for that.”

The NHSBSA spokesperson says: “[The authority] shall provide an annual allowance statement when it is in possession of the GPs actual pensionable income in the relevant year. There is no requirement, however, under general tax legislation for a pension scheme manager to provide a pension saving statement where they are not in possession of all the material facts.”

It adds that some problems with forms are of doctors’ making. “In 2018, the NHSBSA became aware that many salaried GPs had not fulfilled their statutory obligations by completing their type 2 medical practitioner self-assessment forms at year-end; this form was first introduced in 2009,” the spokesperson says. 

“To avoid those GPs completing several years’ catch-up forms, the NHSBSA – working in conjunction with NHS England and the BMA – has designed an amnesty form that captures several years of pensionable income.”

Improvements are being made

There are some small green shoots of hope: one independent financial adviser with many medical clients, who asked not to be named, says: “We hear lots of comments from doctors about Capita and its poor administration. However, the amount of noise about them seems less more recently, but that maybe because the issue of annual allowance is louder.”

Dr Grundy adds: “Things have improved a little. But the baseline is so low that there are still multiple ongoing issues. It is the deadline for submitting pension forms [February 28] and the website keeps on crashing.”