The Department of Health and Social Care (DHSC) has published the outcome of its consultation on proposed amendments to the NHS Pension Scheme Regulations.
It confirms the changes that will be made to final pay controls from 1 July 2021
The aim of the final pay control regulations in the 1995 Section of the NHS Pension Scheme is to protect the Scheme against the costs of excessive increases in pensionable pay. Under the current regulations, employers are charged if they give a scheme member an increase in pensionable pay which is above an allowable amount in the final three years of their employment.
The changes to reform final pay controls include increasing the allowable amount from the consumer prices index (CPI) measure of inflation plus 4.5% to CPI plus 7%.
There will also be new exemptions introduced for increases in pensionable pay as a result of:
- nationally agreed contracts, framework agreements or re-banding where this is authorised under particular NHS terms and conditions
- a National Clinical Excellence Awards (CEA)
- promotions following fair and open competition
- the ending of a salary sacrifice arrangement
- an increase in practice profits impacting non-GP providers (in certain scenarios)
The changes will be applied retrospectively to 1 April 2018
Employers who have paid or received an invoice for a final pay control charge on or after 1 April 2018 will be able to request for this to be reviewed once the revised legislation takes effect on 1 July 2021.
We’ll share more information as processes are finalised
We’re reviewing the outcomes of the consultation response and the procedures and application information/forms that will need to be put in place as a result.
We’ll share more information with Employers as these are finalised ahead of the 1 July 2021.
You can find more information on the consultation outcome via the Gov.UK website .