The government has set out plans for a reformed judicial pension scheme that will be 'tax-unregistered' - a status 'largely negating the applicability of the annual and lifetime allowance charges for pension accrued under the reformed scheme'.
Judges' pension schemes have previously been tax-unregistered - this was the case until 2015 reforms pushed through amid the coalition government's austerity drive. Along with other public sector pension overhauls completed at the same time - including the NHS pension scheme - the reforms were found to be discriminatory because of transitional arrangements offered to scheme members near retirement age that were not offered to younger members.
However, in unpicking the discriminatory changes, the government has agreed to reform the pension scheme for judges, restoring its previous tax-unregistered status. For the NHS scheme, however, the government has rejected the case for wider reform alongside measures to reverse discrimination.
BMA pensions committee chair Dr Vishal Sharma said the approach to changing judicial pensions - implemented with the express purpose of tackling concerns over recruitment and retention - showed that the government could do more to stop doctors being forced to limit their working hours or retire early to avoid pensions tax charges.
Dr Sharma said: 'The outcome of this consultation is of course important for judges but there are also parallels with the situation faced by tens of thousands of doctors. The unfair taxation on pensions that has caused retention and recruitment issues for judges, are the very same taxes that are having a terrible impact on the NHS with doctors having to reduce the work they do for patients or retire early, despite doctors wanting to provide more care for patients.
'The Ministry of Justice consultation, launched in the summer last year, asked for comments on the department’s proposals for remedying the discrimination identified in the 2015 judicial pension reforms. These reforms discriminated against younger judges - similar to the NHS - by offering transitional protection to those closest to retirement.
'Similar to the consultation including the NHS pension scheme, the government has offered judges the choice between legacy and reformed scheme benefits. However unlike the outcome for the NHS, the government has reviewed the structure of the reformed scheme.
'To redress the workforce and retention issues in the judiciary, similar to those faced by doctors, the government has essentially created an exemption from the impact of pensions taxation for judges
'This shows that a solution can be found to avoid highly skilled and experienced workers having to choose between continuing to work in their profession and facing a large tax bill for their pension or leaving it altogether. The BMA has repeatedly called on the government to find a way of mitigating against large pension taxation bills for doctors to avoid them having to leave the NHS and deprive our health services of thousands of hours of skilled care.'
Some experts argue that comparison with the judicial scheme may not be fair, on the basis that judges' pensions are intended to compensate them for potentially taking a pay cut for moving into the judiciary from high-paid work as barristers - and because they are not allowed to move back into private practice after taking up office.
However, there are clear parallels with the impact on recruitment and retention of doctors - and the approach to judges' pensions undermines an argument advanced by the Conservative-Liberal Democrat government that there could be 'no question of protecting the judiciary from reforms' in ways that were not being applied for other high-earning public sector groups.
The government took steps in last year's budget to address the impact of pension tax on the NHS workforce amid evidence that thousands of doctors were being forced to reduce their hours or retire early to avoid annual allowance charges that could cost more than they earned for extra shifts.
However, although raising the threshold at which the annual allowance kicked in by £90,000 meant many doctors were no longer affected, higher earners still face the 'cliff edge' that can see small increases in income - in some cases beyond doctors' control - push them over a limit that triggers a large tax bill.
Board member of the Association of Independent Specialist Medical Accountants (Aisma) Andy Pow, of Mazars LLP, told GPonline that the annual allowance mechanism 'needs to be reformed and isn't fit for purpose'.
He said: 'The government has to be aware of the impact of the annual allowance in particular, and the lifetime allowance to an extent, and the fact that they impact on behaviour - making some doctors reduce their working hours or retire early.
'The last budget was helpful but doesn’t solve the problem - and the government should be open to reforming the tax system to make it work.'
GPonline reported earlier this month that changes proposed by the government to end discrimination in the NHS pension scheme would mean some doctors could recoup tax paid over recent years and may need to rethink temporary opt-outs from the scheme.