Under proposals put to the government by the BMA and NHS England as part of the five-year GP contract agreement earlier this year, GPs and other doctors could be allowed to halve the rate at which their pensions build up by halving their contributions.
The 'partial pension' plan would mirror a 50% option that already exists in the local government pension scheme, and could delay the point at which doctors hit annual allowance or lifetime allowance limits - triggering tax charges that are forcing many doctors to cut working hours or stop work altogether.
However, accountants and BMA leaders have warned that the move does not go far enough - and have called on the government to consider further options.
GPonline reported this week on BMA warnings that growing numbers of doctors are being forced to retire early or reduce their working hours because current pension tax rules can mean they end up effectively 'paying significant sums' to take on extra work. Accountants say that as many as one in four GPs may be affected by the tax charges.
BMA leaders have said these punitive tax charges are severely damaging an already-depleted NHS workforce, threatening a 'massive loss of capacity within the NHS' that places its future sustainability at risk - and have accused the government of ignoring the problem.
Both the Association of Independent Specialist Medical Accountants (Aisma) and the BMA have warned that reversing the impact of tax charges on doctors' pensions will require radical solutions beyond the partial pension proposal.
A statement published by Aisma this week said: 'Simply allowing the option to reduce contributions and benefits to 50% as proposed in the latest GP contract will in our view not have the desired impact. Changes need to be more radical than this.'
Meanwhile, a letter from the BMA consultants committee to chancellor Phillip Hammond warned: 'We note that NHS Employers and DHSC have suggested a fixed ‘50:50’ option with recycling of the employers contribution to the employee, may alleviate the problem.
'We have modelled this extensively and are of the firm belief that this will not solve the problem and the perverse incentive to reduce NHS work will remain, albeit to a lesser degree. It is therefore not a long-term solution to this problem.'
Under alternative plans set out by Aisma in correspondence with the Treasury, accountants suggest that one option could be to raise the annual allowance threshold 'to a position where it removes the majority of key NHS workers from this charge'. Aisma argues that this could be justified because high-earners' pensions are already effectively capped by lifetime allowance rules.
At the very least, Aisma warns, the tapering mechanism that reduces tax relief on pensions in stages for people earning over £110,000 per year 'need an overhaul as they are causing "cliff edges" where additional tax is higher than earnings'.
But it says the 'simplest option' would be to scrap the complex, unpredictable current mechanism that governs how the annual allowance is calculated in favour of a system that would be easier for doctors to control. Aisma argues that the annual allowance should be 'linked directly to combined employee and employer contributions, rather than on the benefit accrual method that HMRC adopt'.
Specialist medical accountant Andrew Pow, an Aisma board member and a partner at Hall Liddy, told GPonline that moving to an annual allowance based on actual contributions would give doctors clarity, allowing them simply to 'take a break' once their contributions had reached the maximum allowed.
Under the current system, he said, doctors had little control and GPs faced risks from uncontrollable factors. For example, a spike in profits caused by a partner leaving suddenly could drive up their pension contributions and leave them facing large tax charges, he said.
Aisma's statement says linking the annual allowance to actual contributions 'would reduce the burden of administration on the NHS pension scheme and allow taxpayers to complete tax returns more accurately', calling it 'the simplest option, which would achieve quick results and allows professionals to better control their growth'.
The BMA, meanwhile, has called for urgent meetings with Treasury officials to discuss how to protect death-in-service rights for doctors forced to opt out of the NHS pension scheme because of tax charges.
It has also called for the government to help produce guidance for doctors who 'need to leave the scheme temporarily or permanently', and for talks on 'longer-term issues including the annual allowance, tapering and the unique and unfair tax treatment' of NHS pension schemes.