Trust Wholly Owned Subsidiary Companies
The Department of Health and Social Care have confirmed that NHS Trust Wholly Owned subsidiaries can apply for access to the NHS Pension Scheme for compulsorily transferring staff, and new starters. Access for staff will not be granted automatically, and it is for employers to decide to apply for access for their staff. There are separate access routes for compulsorily transferring staff and new starters, so employers may need to make more than one application if they have multiple cohorts of staff.
Wholly Owned Subsidiary Companies
Under powers granted under the NHS Act 2004, the approach of successive Governments has been to empower NHS organisations so that they are responsible for deciding locally the most appropriate structures they need to deliver services to their patients and to support their operations.
Creating a wholly owned subsidiary is an alternative to outsourcing services to the private sector. Wholly owned subsidiary companies are 100% owned by their host Trusts. There are multiple reasons for setting up a wholly-owned subsidiary (WOS), including:
- To provide services for other trusts,
- To employ staff on more flexible and in some cases more generous terms and conditions,
- To attract staff from the local employment market
Ministers from the Department of Health and Social Care have considered the position regarding access to the NHS Pension Scheme. This guidance sets out how different cohorts of staff can access the NHS Pension Scheme, and how employers can apply for scheme access for their staff.
Access for Transferring Staff
Access to the NHS Pension Scheme is afforded under the terms of HM Treasury’s New Fair Deal policy for staff who are subject of a TUPE (Transfer of Undertakings, Protection of Employment) transfer. The policy exists to ensure the pension rights of staff who are compulsorily transferred to a non-public sector organisation are protected. Access to the NHS Pension Scheme for eligible staff is achieved by granting the new employer a direction or determination issued by the Department of Health and Social Care.
A Direction is a legal document is drafted under powers conferred within Section 7 of the Superannuation (Miscellaneous Provisions) Act 1967, and provides access to the 1995/2008 NHS Pension Scheme for eligible staff. A Determination is also a legal document, drafted under powers conferred within Section 25 of the Public Service Pensions Act 2013 and provides access to the 2015 NHS Pension Scheme.
Staff who are compulsorily transferred from an NHS organisation to a WOS retain their employment terms and conditions, in accordance with TUPE regulations and access to the NHS Pension Scheme, in accordance with HMT’s New Fair Deal guidance.
Further information on how WOSs can apply for NHS Pension Scheme access for staff they receive under a TUPE transfer, and the qualifying criteria for scheme access can be found in the Application and guidance pack for NHS Pension Direction/Determination (PDF: 606KB).
Access for New Starters
Ministers from the Department of Health and Social Care have reached a decision to accept applications for new starter access to the NHS Pension Scheme from Trust WOSs. The Department of Health and Social Care is satisfied that allowing new starters in trust subsidiary companies into the scheme is consistent with wider scheme access policy, provided that such companies can prove that they are wholly owned by an NHS organisation.
WOS employers who wish to apply for NHS Pension Scheme access for new starters will need to; submit a business case to nhsbsa.schemeaccess@nhs.net in a formal letter including the below information:
- What is the name of the subsidiary company?
- What the company does?
- That the company is a wholly sub company of a Trust and the name of the trust.
- What type of services the employees will be working on
- How you will be recruiting will this be previous NHS employees and non-previous NHS Employees
- What are the roles that you are wanting to have access to the NHS Pension Scheme (please ensure all roles that you could ever need to advertise are included)
- The date you would like access to the NHS Pension Scheme for the new starters?
- If the company has any other directions (open or closed) have been granted and the Employing Authority Code if approved.
- Where will your funding come from for the services
- Any other information you feel we need to be aware of
- Please also confirm that you accept that Access to the NHS Pension Scheme is under the strict condition that the subsidiary company, which is a company limited by shares, remains a wholly owned subsidiary of the Trust.That is, in the event that the subsidiary company is not the sole shareholder access to the NHS Pension Scheme may terminate
- Any person (including a GP) working for the subsidiary company under a contract for services (self-employed) arrangement does not have access to the NHS Pension Scheme
- Will a contract be awarded to the subsidiary company
- If yes, what type of contract will be awarded to the subsidiary company?
- Please confirm that you understand that new fair deal will apply to all eligible staff in wholly owned subsidiaries in the event of a subsequent staff transfer?
As part of their application, subsidiary employers will be required to confirm the NHS services they are contracted to provide, and also confirm that the new starters who will have access to the scheme will be performing these services.
If an application for new starter scheme access is successful, employers will be provided with a closed direction/determination document which refers to a specific ‘class of persons’. This ‘class of persons’ will be outlined by the employer during the application process, and should reflect the NHS services the subsidiary is contracted to provide.