Click here to read the NHS Pensions Employers Charter detailing the high level roles and responsibilities of Scheme Employers

Gateway No. 07/NHSBSA/03/13 March 2013 n e w s l e t t e r Contact : Tel : 0845 610 1119 Fax : 01253 774412 www.nhsbsa.nhs.uk/pensions www.nhsbsa.nhs.uk/injury Click here to read the NHS Pensions Employers Charter detailing the high level roles and responsibilities of Scheme Employers 1. Reporting 1995 Section TPPs on award applications - (Overpayments following a change to the best year s pensionable pay) The National Pension Group has requested clarification regarding overpayments that occur where there is a change to the best year s pensionable pay, from the middle or earliest year, to the final year. This issue has caused confusion because, in some cases, an increase to the reported pensionable pay has resulted in a reduction to the pension payments the member has received, meaning that their benefits have been overpaid. Overpayments in this type of scenario are generally caused due to a change in entitlement to cost of living increases rather than the change in entitlement to pension benefits. Contents 1. Reporting 1995 Section (Total Pensionable Pay) TPP on awards applications - (Overpayments following a change to the best year s pensionable pay) 2. NHS Reforms 3. Holistic Data Strategy 4. Changes to the NHS Injury Benefits Scheme 31 March 2013 5. Clinical Commissioning Groups (CCGs) 6. Additional Pension Revised instalments to be deducted from 1 April 2013 7. Transfer In Important Reminder 8. 2012/13 Tiered Contributions Reminder 9. Opting Out Form SD502 10. Total Reward Statements - Video for non ESR Organisations You may be aware that pension benefits are calculated using the best of the last three year s pensionable pay. The benefits are increased each year in line with cost of living increases these increases start to accumulate from the day after the end of the best year pay period we use (known as the Deemed Date). This means that where the final year pay is used, no cost of living increases will have accumulated at the payable date of the award and the member will initially receive just the basic pension and lump sum amounts. Where the middle year is highest, cost of living increases will have accumulated between the middle year pay period and the date of the award. Therefore, the member will initially receive the basic pension and lump sum amounts plus one year of cost of living increases. Where the earliest year is highest, the member will initially receive the basic pension and lump sum amounts plus two years of cost of living increases. Basic example Year From To Deemed Date Amount (TPP) Final Year 01/04/2012 31/03/2013 01/04/2013 26,000 Middle Year 01/04/2011 31/03/2012 01/04/2012 28,000 Earliest Year 01/04/2010 31/03/2011 01/04/2011 27,500 1

In the above example, the middle year pay would be used and cost of living increases would accumulate from the Deemed Date of 01/04/2012. NHS Pensions must calculate benefits using the best years pay, as provided by the employer on the AW8 form. This is to ensure that we meet audit and Pension Regulation requirements i.e. that no pension benefits are being withheld. If the middle or earliest year s pay is used in the initial award and the employer then tells us that the final year s pay has changed and is now the highest, we must then recalculate the award using the final year s pay. This may result in an overpayment, even though the pay we are using is higher than before. The overpayment occurs because the member is no longer entitled to the cost of living increases that were added in the initial award, when the middle or earlier year s pay was the highest. The increase in benefit entitlement that is brought about by the higher pay is more than offset by the change in entitlement to cost of living increases. The overpayment will be greater in circumstances where a member has given up some of their pension for a bigger lump sum. Suggested workaround to avoid overpayment of cost of living increases Where the final year pay details cannot be confirmed when completing the AW8 and it is anticipated that the final year s pay will either be the same or higher than the pay in middle or earliest years, employers may wish to show the highest pensionable pay as occurring in the final year on the AW8. The effect of this action will be that cost of living increases will only start to accumulate from the end of the final year and thus prevent an overpayment. Where the final year s pay is equal to the middle or earliest years, it will be treated as the highest year s pay and will be used for the initial award meaning that cost of living increases would only start to accumulate from the end of the final year. Once the final pay details are known and if the final year s pay is higher, benefits will be recalculated using this higher pay and the member will receive an increase to their award. If the final year s pay turns out to be lower than an earlier year then the benefits will be recalculated to reflect the best year s pay and it s associated Deemed Date. In any of these circumstances, it is important to notify NHS Pensions of the correct pay as soon as it is established in order to minimise the effect of any adjustments upon the member. Please note NHS Pensions will require an AW171 form to confirm the pay and to enable us to recalculate the award. 2. NHS Reforms Guidance for Local Area Teams in respect of GPs and their NHS Pension is now available on the website at http://www.nhsbsa.nhs.uk/pensions/3825.aspx 2

3. Holistic Data Strategy Post implementation update SD55 Cyclic and Leaver Forms - change of annual update from 2 years to 1 year at a time. NHS Pensions is aware of a problem that prevents the updating and closing of records via the SD55 e-forms, where the last day of membership is on or after 01 April 2013. This is due to the recent change in functionality, to allow only one year at a time to be updated and/or closed. The change has been introduced due to the complexity of validations around missing, mandatory and conditional data items, when an input form with 2 years present is submitted. Previously, you would have been able to cyclic update to 31 March 2013 and close an employment on the same SD55 leaver form. As this is no longer possible it has been necessary to implement an interim solution in order to update and close records. As an interim measure between now and 31 March 2013, if you need to update and close a record with a last day of membership after 31 March 2013, please take the following action: - Close the record down using 31 March 2013 as the last day of membership, using the SD55 leaver form. When that has processed please complete a form SD55E to amend the leaving date and leaving information to reflect the correct details. This will only be an issue until 01 April 2013. From that date onwards, it will be possible to use the SD55 update form to perform cyclic updates (one year at a time) up to and including 31 March 2013. Refinements to the validation will be assessed in the annual update for the next financial year end. ADP4 Due to the level of data on the ADP4, the performance of this form has been affected at times. Changes have been made to the ADP4 to improve its performance and allow greater flexibility in terms of sorting and moving columns to make navigation easier. Also, rather than one long list of entries, the ADP4 now splits the list into pages and provides a page selection facility long with a printer friendly output option which was not available before. The Pension Online Guide (25 ADP4) has been updated and is available on the website for you to see the changes. There were a couple of issues that employers have raised which we are currently looking into: We have assessed whether it is possible to add on an output to excel option and its been confirmed that we can, this is being developed and we hope to release this functionality within the next 2 3 weeks. 3

We have also assessed whether it is possible to add a search facility to trace individual members, again this is possible and is currently being developed to be released within the next few weeks. A further update will be provided as soon as we have the actual release date. In the meantime, if you would like a full list of all your current, active members, an open employment scan can be requested via: datamanagment@nhspa.gov.uk. Employer Comments You may be aware of the facility in which employers can add comments to any errors they refer to NHS Pensions - the aim of the comment is to provide additional information that may assist in resolving the error. Where an employer is unable to resolve an error themselves, they are encouraged to use this facility. It is important, however, that any comment includes: a meaningful commentary which will help resolve the enquiry the sender s name and contact details Our aim is to action Employer Comments within 5 days of receipt our action being either to clear the error or to contact the employer for further information, if necessary. We are confident that this approach will assist in improving the management of NHS member data at all levels. Annual Updates for Non-ESR users With the 2013 year end fast approaching, our focus turns to the annual year end updates and associated error corrections. We ask that you submit your 2013 annual updates by the end of April 2013 for officer posts. We also ask that practitioner posts are updated to March 2012 by this date. For your updates to process successfully, it is essential that employers: Use Pensions Online where available to ensure your Employer Error Handling is cleared prior to your year end submissions. An update for year end 2013 will not process to the member s record until all previous errors have been resolved. Reply promptly to all email requests from NHS Pensions relating to errors with member records. Resolve any errors generated from your 2013 submissions as soon as possible. Pension Online Guides There are comprehensive guides to assist the completion of these Pensions Online forms and these can be found in the Employers Toolkit under the Employer Guides section of the website at: http://www.nhsbsa.nhs.uk/pensions/3398.aspx If you experience difficulties using Pensions Online, please phone or e-mail the Pension Online Helpdesk, 0870 011 7108, pensionsonline@pensionsagency.gov.uk Annual Update Spreadsheet Users are requested to process annual updates via Pensions Online as far as possible. For those 4

employers who do not have access to Pensions Online we have devised a spreadsheet which enables annual updates to members records to be made in bulk. The spreadsheet has proved, to be a very useful and convenient tool and we have received positive feedback from employers who have updated their records using this method. The spreadsheet, along with guidance notes for its completion can be found in the Employer s Toolkit under the Pension Scheme Forms section of the website at: http://www.nhsbsa.nhs.uk/pensions/2518.aspx Post-retirement change notifications a reminder We would like to remind employers of the correct procedure in those cases where they are amending any of the following values after a pension has been put into payment: Employer pay (actual or notional whole time) Part time hours The last day of membership Where the member has retired, the form AW171 should be sent to NHS Pensions in addition to any data changes you may have made. We will then reassess the original award and consider whether there is any change to the benefits in payment. While we appreciate that many post retirement changes are minor we need to ensure that members receive the benefits to which they are entitled. We would therefore ask that employers check their records to see whether there have been any instances where an AW171 should have been submitted. ESR users are reminded that the Pension Interface Assignment Override NHS element should be used in retirement cases to prevent records being updated via the interface and causing Pensions Online errors. We are not able to re-assess the pension in payment until a completed AW171 form has been received. HMRC legislative information requirements As you will be aware, in order to meet HM Revenue and Custom s (HMRC) legislative information requirements you must submit an accurate year end return of service and salary details for 2012/13 to NHS Pensions no later than 6 July 2013. Any employer who does not update their member records by 6 July 2013 could be liable for a fine from HMRC of up to 300, plus an extra fine of up to 60 a day for each day the information is late, for each member where the information has not been submitted to NHS Pensions. Although NHS Pension will not be sending reports to HMRC they do have the authority to request the information from NHS Pensions. Please note there are different rules for Pactitioners. Data Management Queries For data management queries: If you are working on an ESR Reconciliation report, please continue to send ESR Reconciliation amendments to ESRReconciliationTeam@nhspa.gov.uk Any Special Class or MHO amendments should be sent directly to Employers at: employers@nhspa.gov.uk and mark in the subject box for the attention of the Service Team. For any other changes that cannot be made on Pensions Online, please e-mail: data.management@pensionsagency.nhs.uk 5

4. Changes to the NHS Injury Benefits Scheme 31 March 2013 In the November 2012 newsletter we informed you that the Department of Health had started a consultation on the draft NHS Injury Benefits (Amendment) Regulations 2013. The consultation has now been completed and changes to the Injury Benefit Scheme Regulations will come into force on 1 April 2013. These changes bring about the closure of the NHS Injury Benefit Scheme in respect of injuries or diseases occurring on or after 31 March 2013, introduce transitional arrangements to cover injuries or diseases occurring before that date and launch a new Injury Allowance as part of NHS Staff Terms and Conditions of Service. More information is available in appendix 1 of this newsletter and on the Injury Benefits website http://www.nhsbsa.nhs.uk/injurybenefitscheme.aspx 5. Clinical Commissioning Groups (CCGs) Clinical Commissioning Groups will qualify as NHS Pension Scheme Employing Authorities from the 1 April 2013. They will each be afforded their own unique NHS Pension Scheme Employing Authority (EA) code. Salaried Staff All staff who are formally employed (i.e. contract of service) by a CCG (including doctors/gps) are Officers in NHS pension terms. This includes employed directors and Chairs. CCGs are legally required to provide accurate Officer pension records on an annual basis including pensionable pay details. If an employee is part-time the CCG must set up a pension record showing details of the part-time hours (or sessions) worked and the whole- time equivalent standard working week (i.e. 37.5 hours). The 2013/14 tiered employee contribution rate for (Officer) employees who have TUPE d to a CCG is based upon the annual whole-time equivalent rate of pay in the previous year; i.e. 2012/13. The 2013/14 tiered employee contribution rate for (Officer) employees who are new starters (i.e. non TUPE d staff) is based upon their whole-time equivalent annualised rate of pay in year 2013/14. There is more information about Officer tiered contributions on NHS Pensions website at: http://www.nhsbsa.nhs.uk/pensions/2520.aspx Self-employed GPs A qualified GP (who is already Scheme member) who works for a CCG under a contract for services (i.e. fee based/self-employed) as an individual must pension their CCG income. This includes a GP who holds CCG Chair post in a self-employed capacity. However the CCG must not create an Officer (or Practitioner) pension record under its own EA code; the GP Solo form must be used. The tiered employee contribution rate for GPs is based on their global GP pensionable income in the current year; the tiered rate must not be based solely on the CCG income. There is more information about GP (Practitioner) tiered contributions on NHS Pensions website at: http://www.nhsbsa.nhs.uk/pensions/2520.aspx The GP Solo form can be downloaded from the NHS Pensions website by clicking onto Practitioner, Locums, Out of Hours and non-gp Providers at the home page or at the following link. http://www.nhsbsa.nhs.uk/2529.aspx A GP who works and trades for a CCG as a limited company cannot pension their CCG income. 6

6. Additional Pension Revised instalments to be deducted from 1 April 2013 In the January Newsletter we informed you that following a review by the NHS Pension Scheme Actuary, the cost of buying Additional Pension (AP) has changed, with some prices increasing and others reducing. During the next two weeks NHS Pensions will be writing to members who are buying AP by payment of regular contributions (instalments), to explain how the price change affects their purchase. Your action You will receive a copy of the letter(s) sent to each member. Irrespective of whether there is a price increase or a reduction, you must apply the new rate to all instalments due for payment on or after 1 April 2013. If because of a price increase a member decides to stop buying one or more AP at 31 March 2013, they will inform you of their decision by completing the termination slip before 30 April 2013. You should return through payroll any instalment already collected at the new rate and send the completed termination slip to NHS Pensions. 7. Transfer-In Important Reminder When a member joins the NHS Pension Scheme they may wish to consider a Transfer-In of former pension rights. To make a request the member should use the Transfer-In Pack available on the NHS Pensions website at: http://www.nhsbsa.nhs.uk/pensions/2669.aspx If a Transfer In is possible, NHS Pensions will offer the member a membership credit based on the transfer value offered. At this time, we will also complete any option/discharge forms required by the former pension provider. The NHS employer must not complete any option/discharge forms provided by the former provider. These forms need to be sent to NHS Pensions by the member when they send Form A and Form B, (or the transfer quotation issued by the former provider), from the Transfer-In Pack. Option/discharge forms should only be completed on behalf of the receiving scheme by NHS Pensions when we make the member a formal offer, based on the transfer value offered. 8. 2012/13: Tiered Contributions Reminder In Employer Newsletters 12/2012, 1/2013 and 2/2013 we informed you about the proposed changes to Employee contributions from 1 April 2013 and about the importance of ensuring all employees are made aware of the changes. The Regulations to introduce the new contribution rates have now been laid before Parliament and will become effective from 1st April 2013. Below is a reminder about the disclosure requirements: Disclosure - Notifying Members of the New Rates To alert members to the revised contribution rates and to assist employers in communicating this information, NHS Pensions has made the following arrangements: 7

NHS Pensions website - NHS Pensions website has been updated with the latest details of contribution rates and provides specific factsheets for further information. A link to a calculator on the DH website is also available for members to determine the effect the changes will have on them. Pay slip Leaflet - Under Disclosure legislation, employers must ensure that all their staff, not just Scheme members, are provided with advance notice of the new rates of contributions. To ensure employers meet their disclosure responsibilities, NHS Pensions has produced a pay slip leaflet for employers to distribute with February/March 2012 pay slips. Supplies of the leaflet should by now have reached Pensions Officers. For those employers who use the Electronic Staff Record (ESR) system, the leaflet for each paid employee has been automatically placed in an envelope with the employee s pay slip. Should you require any additional copies of the payslip leaflet by calling the Stationery Order Line on 0300 123 1002 or you can download a copy from the website at: http://www.nhsbsa.nhs.uk/pensions/2520.aspx All your NHS employees must receive a copy of this leaflet before 1 April 2013. In order to deal effectively with any future disputes or complaints about disclosure, employers are reminded that they should keep records of how such materials are distributed. Poster NHS Pensions has also made available to employers via the NHS Pensions website an A4 poster to alert members to the forthcoming changes to contribution rates. Employers should download copies and ensure that posters are placed in areas where members are most likely to notice them. Collection and Payment of Scheme Contributions Please remember employers have a legal responsibility to ensure that the new contribution rates are implemented appropriately and that the correct contributions are deducted and paid to NHS Pensions promptly. Application of Tiered Contribution Rates The rules on how to assess a member s contribution rate have not changed: Officers and Practice staff Scheme members Officer or Practice Staff Scheme members are salaried employees of a Trust, Foundation Trust, SHA, PCT, LHB, Direction Body, GP Practice, OOHP, or APMS Contractor who are not GPs or non-gp Providers. The general rule is that the tier for existing Officers and Practice staff Scheme members in 2013/14 is based on their 2012/2013 full year whole time equivalent (WTE) pensionable pay using the table provided in Employer Newsletters 12/2012 and 1/2013, unless the member s circumstances have changed. More detailed information can be found in the factsheets detailed below. If an Officer (or Practice Staff) Scheme member receives a pay award it may not affect their contribution rate however, the contribution rate should be re-assessed and a new rate applied, if appropriate. Where a reassessment results in a different rate of contributions, the new rate should be deducted from the first day of the next pay period immediately following the pay period in which the change is made Further information can be found in the factsheets shown on the NHS Pension Scheme website using the links below. Practitioners and Non-GP Providers Practitioners are GPs of any type (excluding GP Registrars), General Dental Practitioners, and Ophthalmic Medical Practitioners. Non-GP Providers are single-handers, partners (including a fixed salary partner), or shareholders in a GP Practice or APMS/sPMS organisation who are not GPs. The basic rule is that the 2013/2014 tiered rate for Practitioners or non-gp Providers is based on their total 8

2013/2014 NHS pensionable income as a Practitioner or as a non-gp Provider. More detailed information can be found on NHS Pensions website: For Members: http://www.nhsbsa.nhs.uk/pensions/2657.aspx For Employers: http://www.nhsbsa.nhs.uk/pensions/2520.aspx 9. Opting Out Form SD502 Should you need to order form SD502 from the stationery order line please quote reference SD502(2013) The old version of the form is now no longer available to order. Please note that contrary to what it states on the form, a member does not need to send in their birth certificate with the SD502. The form available on the website has been amended (V8.1) and the paper version will be amended shortly. 10. Total Reward Statements - Video for NHS Organisations who do not use the Electronic Staff Record (ESR) For NHS Employers who do not use ESR a video has been developed to explain in more detail the purpose of the project and your role in making it a success. It will focus on the pension benefit information your employees will receive if they are an active member of the NHS Pension Scheme. It does not cover anything about the employee and local benefits information as your employees will not receive this part of the statement. You can view the video on YouTube via the following link: http://www.youtube.com/user/thenhsbsa If you have any queries about the information provided in the video please contact TRSqueries@nhspa.gov.uk How to contact us: By Telephone: Employer helpline, general enquiries 0300 330 1353 Opening times: 8.00am to 6.00pm Monday to Friday Pensions Online, technical enquiries 0870 011 7108 Member helpline 0300 330 1346 Opening times: 8.00am to 6.00pm - Monday to Friday Injury Benefits Helpline 01253 774957 Stationery Order line (Forms and Booklets) 0300 123 1002 By email: Fax: 01253 774412 Website addresses: www.nhsbsa.nhs.uk/pensions www.nhsbsa.nhs.uk/injury Datamanagement@pensionsagency.nhs.uk- For your data queries ESRReconciliationTeam@nhspa.gov.uk - For your ESR queries polhelpd@pensionsagency.nhs.uk - For your POL enquiries employers@pensionsagency.nhs.uk - For your general enquiries 9