GPs face 142% pension contributions hike

The government is sticking with plans to hike pension contributions 142% from 2007/8 levels by 2014/15 and has rejected calls to delay making practices pay employers' superannuation for locums.

Dr David Bailey: pensions hike will push GPs to retire early
Dr David Bailey: pensions hike will push GPs to retire early

BMA leaders have warned soaring contributions in England and Wales will trigger a workforce crisis, with many GPs likely to bring forward their retirement dates.

GPs have warned that plans to transfer responsibility for locum superannuation payments will cost some practices five-figure sums and skew the locum job market in favour of older doctors who have already claimed their pensions. They have also hit out at DH plans to press ahead with the scheme from April although no details of how the changes will affect PMS practices in England have been published.

The ‘vast majority’ of responses to the DH consultation on the NHS pension scheme were from hospital doctors and GPs who said the ‘the steepness of contribution rates applicable to the upper pay tiers is unfair’.

But the government’s response to the consultation published on 22 March rejected concerns that revised contribution rates are ‘unfair and disproportionate to higher earners’.

It said: ‘The progressive structuring of contribution rate increases is designed to take account of the fact that over their career, higher earners in final salary schemes generally get double the value in pension benefits per pound of contribution paid than lower earners.

‘Even with these further contribution rate increases, the NHS pension scheme remains an excellent investment for retirement.’

BMA pensions committee deputy chairman Dr David Bailey said: ‘I was disappointed but not surprised by the consultation response. It is a mistake not to delay making practices pay employers' superannuation for locums.

‘We were pleased that they listened to us and have now decided to pay this through global sum equivalent and not the global sum. But there will still be winners and losers. Some practices will get a windfall if they don’t use locums and a lot of practices that do use them will be out of pocket.

‘People towards the end of their career will be making some fairly serious decisions and it will have an impact on retention.’

The BMA’s response to the consultation demanded a one-year freeze on 'rushed' plans to make practices pay employers' superannuation for locums.

The DH response said that the changes to locums' pensions are ‘not unduly complicated and should be capable of being adopted into existing working practices straightforwardly’.

It said it does not expect the changes to impact on the supply of locums. ‘The engagement of locums is a commercial arrangement between practices and individual locums or agencies’, it said.

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