NHS Scotland brings in national pension contribution 'recycling' policy

HCSA has welcomed a new national NHS Scotland policy which means hospital doctors who stop paying into their NHS pension due to Annual Allowance taper issues will no longer lose their employer contributions.

The decision to “recycle” this amount in full into pay packets, which took effect this week and will only apply in 2019-20, represents a significant departure from current policy in England, where it remains a voluntary decision by employers.

HCSA research shows that only a tiny minority of Trusts in England have introduced such a scheme, and is calling for a mandatory policy to accompany proposed flexibilities set to be introduced in April 2020.

NHS Scotland stated that the pensions tax framework for hospital doctors was having “a direct impact on sustainability and service delivery as vital senior expertise is lost from the service, but is also damaging to overall staff morale.”

Doctors hoping to apply will need to meet a number of criteria and would lose in-work benefits if they did opt to drop out of the scheme. NHS Scotland also highlights that just dropping out of the NHS pension scheme may not be enough to prevent a tax bill for exceeding annual allowances.

Full details are available in the new NHS Scotland circular outlining the scheme.

HCSA Scotland National Officer Rob Quick said: “The current tax regime is devilishly complicated and requires individual expert advice, so it’s important that hospital doctors do not make uninformed decisions on whether or not to remain in the NHS Pension scheme.

“However,  for those who have made up their mind this represents a fair policy which HCSA believes should be reflected south of the border as well as part of a package of short-term measures while we press for full Treasury reform of pensions tax and the scrapping of the taper.”