Response to 2019/20 Pensions Annual Allowance Charge Compensation Policy

Commenting on the publication yesterday by NHS England and NHS Improvement of the 2019/20 Pensions Annual Allowance Charge Compensation Policy, Andrew Pow, board director of the Association of Independent Specialist Medical Accountants, said:

“The publication of the rules by which NHSE&I will compensate clinicians for annual allowance charges are welcomed. However, GPs will have issues with meeting the strict 31 July 2021 deadline for submitting a Scheme Pays Election because of the lengthy process involved in PCSE processing the 2019/20 pension forms and for the Pensions Agency to calculate the pensions growth.

“GPs will therefore need to submit estimated elections, or at the very least a protective nominal election by 31 July 2021 if they think they are at risk of having an annual allowance charge in 2019/20.

“GPs will then have to apply using a separate compensation policy application form via PCSE. The methodology of this has not yet been agreed with PCSE so GPs at the moment cannot make the compensation application.

“A significant number of GPs do not have correctly updated pension records. Producing accurate information will be at the heart of making this policy work and there is an urgent need for PCSE to correct the large number of out-of-date records.

“The policy is based on a very complicated system with many possibilities for things to go wrong. It’s essential for GPs to keep hold of the records and confirmation letters that they receive right up until retirement.”