Advice for Practices on employers pension contributions
2013/04/18

From 1 April 2013, GP practices will take over responsibility for funding employer’s pension contributions for the locums they use which have until now been paid by Primary Care Organisations (PCO).

On top of any locum fees, practices are required to pay the 14% employer’s pension contribution for the period paid for by the practice when the locum GP is contributing to the NHS pension scheme.

Although practice funding is being increased as a result of these changes, the actual employer contribution will be paid through the locum. Locums themselves will be responsible for making the payments to the Area Team at the same time as they pay their employee contributions. The Department of Health has stated that it expects locums to increase their fees as a result.  

This applies to any contracts already agreed with locums for work from April onwards; the locum will add the 14% to any previously agreed charges on their invoice. Legally, the practice is liable to pay the 14%, not the individual partner requiring locum cover. The Pensions Agency has said that they will report any practices refusing to pay the 14% contribution to the Pensions Regulator. Failure to pay could result in legal action.

Please note that the employer’s pension contribution is based on the locum’s pensionable income only, which is 90% of their total fee. The remaining 10% is regarded as covering expenses. Once they have been paid by a practice, the locum must then make the payment to the NHS Commissioning Board; they cannot keep the fee.

Locum GPs who are not part of the NHS pension scheme will not receive the employer’s contributions. The change does not affect locum GPs who work through locum agencies that are not recognised NHS employing authorities and who therefore cannot pension their income. Similarly, individual locums trading as limited companies cannot pension their income.

The change to employer’s pension contributions will not affect the current arrangements for longer term locums. After 6 months of continuous work with a practice, the locum is regarded as a Type 2 Practitioner for the purposes of the pension scheme. The practice then administers and pays their pension contributions as they would for a salaried GP. Locum forms A and B cannot be used in this situation.

 

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