Consultation outcome

NHS pension schemes and injury benefits (amendment) regulations 2021: response to consultation

Updated 27 May 2021

1. Introduction

The department published for public consultation a draft statutory instrument titled, the National Health Service Pension Schemes and Injury Benefits (Amendment) Regulations 2021. The statutory instrument proposed amendments to:

• the National Health Service Pension Scheme Regulations 1995 (as amended) (S.I. 1995/300) (the ‘1995 Regulations’)
• the National Health Service Pension Scheme Regulations 2008 (as amended) (S.I. 2008/653) (the ‘2008 Regulations’)
• the National Health Service Pension Scheme Regulations 2015 (as amended) (S.I. 2015/94) (the ‘2015 Regulations’)

collectively referred to as the NHS Pension Scheme Regulations, and:

• the National Health Service (Injury Benefits) Regulations 1995 (as amended) (S.I. 1995/866) (the ‘Injury Benefits Regulations’)

The proposed amendments in the consultation were to:

1. Equalise the entitlement to survivor pensions for male survivors of female scheme members who would otherwise receive a lower pension under the current rules, following the Employment Tribunal decision in Goodwin v Secretary of State for Education [1308506/2019] (‘Goodwin’).
2. Remove certain amendments to the 1995 Regulations made by the Civil Partnership (Opposite-sex Couples) Regulations 2019 (S.I. 2019/1458), further to the changes required following the Goodwin judgment
3. Ensure that payments and allowances under NHS England and NHS Improvement’s (NHSE&I) New to Partnership Payments (N2PP) Scheme are treated as non-pensionable earnings for both GPs and non-GP providers
4. Reform the final pay control provisions of the 1995 Regulations, following a review and recommendations by the NHS Pension Scheme Advisory Board (‘SAB’). SAB is a statutory board that advises the Secretary of State for Health and Social Care on the merits of making changes to the NHS Pension Scheme. It comprises representatives from NHS trade unions and employers
5. Make miscellaneous amendments to introduce or change definitions in the 1995 Regulations, the 2008 Regulations and the 2015 Regulations, and minor corrections and other technical amendments to the NHS Pension Scheme Regulations and the Injury Benefits Regulations

This document sets out the department’s response to comments received through the public consultation.

The department will produce informal full consolidations of the NHS Pension Scheme and Injury Benefits Regulations incorporating the changes implemented by the final instrument. These will be available on the scheme administrator’s website after 1 July 2021.

2. Consultation process

The proposals and draft regulations were subject to public consultation which began on 28 January 2021 and ended on 8 April 2021. A consultation document describing the proposals and draft regulations was published on the GOV.UK website and consultation platform, with responses invited through the consultation platform or by email.

The major NHS trade unions, a number of NHS employers and other interested parties were formally notified of the consultation, as part of governance arrangements for the NHS Pension Scheme.

Prior to publication of the consultation document, the proposals were shared and discussed with the SAB in September and December 2020.

The department welcomed any comments or views on the proposals and draft regulations.

A total of 35 responses were received, with 23 responses received through the consultation platform and 12 responses received by email. The responses came from individuals, GP surgeries and medical centres, Foundation Trusts and other organisations, including:

• Association of Independent Specialist Medical Accountants (AISMA)
• British Medical Association (BMA)
• NHS Business Services Authority (NHSBSA), the Scheme administrator
• NHS Employers
• NHS Pension SAB
• Pharmacists’ Defence Association (PDA)

Some respondents took the opportunity to express views on topics related to the NHS Pension Scheme but outside of the scope of the consultation.

The department is also grateful for the suggestions that respondents made to improve the format and response methods. These comments will be considered for future public consultation exercises.

3. Survivor benefits - male survivors of female members

The consultation proposed to amend the 1995 Regulations in order to equalise the survivor benefits payable to a male survivor of a female member from the 1995 Section in circumstances where the entitlement to benefits arose on or after 5 December 2005, the date on which legislation recognising same-sex civil partnerships came into force.

The entitlement of a male survivor of a female member who died before this date is unaffected.

There were no proposed amendments to the 2008 Regulations or the 2015 Regulations as the rate of survivor benefits is already fully equalised in both the 2008 Section and 2015 Scheme.

3.1 Background and consultation proposal

In June 2020, the Employment Tribunal handed down its judgment in Goodwin. The tribunal considered the rules on survivor benefits in the Teacher’s Pension Scheme and concluded that a female member in an opposite-sex marriage was treated less favourably than a female member in a same-sex marriage or civil partnership, and that treatment amounted to direct discrimination on the grounds of sexual orientation. As a direct result of this discrimination, male survivors of female members were entitled to a lower rate of survivor benefit than a comparable same-sex survivor. Consequently, the relevant provisions of the Teachers’ Pension Scheme Regulations 2010 were found to be in breach of the non-discrimination rule set out in Section 61 of the Equality Act 2010.

Following Goodwin, the Chief Secretary to the Treasury made a written ministerial statement on behalf of the government on 20 July 2020. The Chief Secretary to the Treasury announced:

“The government has concluded that changes are required to the Teachers’ Pension Scheme to address the discrimination. The government believes that this difference in treatment will also need to be remedied in those other public service pension schemes, where the husband or male civil partner of a female scheme member is in similar circumstances.”

Accordingly, the department consulted on amendments to equalise the position of female members in opposite-sex marriages or civil partnerships with that of female members in same-sex marriages or civil partnerships under the 1995 Regulations.

3.2 Consultation findings

The changes to the 1995 Regulations to equalise the survivor benefits payable to the opposite-sex spouse or civil partner of a female member with those payable to a same-sex spouse or civil partner of a female member were broadly welcomed by respondents.

However, some respondents were disappointed that the proposals did not go further and felt that because the changes apply to cases where a female member, with an eligible spouse or civil partner, has died since 5 December 2005, an element of discrimination could remain.

A number of respondents commented on the financial impact of historic survivor benefit entitlement, which for some survivors takes account of scheme membership from 6 April 1988 only. The response from the BMA submitted that the government must take further steps to remove any restrictions relating to pre-6 April 1988 pensionable service and in relation to a female member who dies on or after 5 December 2005 leaving a male survivor.

The following comment was made by the Pharmacists’ Defence Association (PDA).

“The PDA Union is committed to ensuring equality for all of our members in all aspects of their employment. We therefore agree these changes should be made and welcome the further steps they take to remove all forms of discrimination from the NHS 1995 Scheme. They ensure that discrimination on the grounds of sexuality, as with discrimination on the grounds of sex and age, continues to diminish but they do not eradicate discrimination completely.

We nevertheless recognise these changes are much needed and should be implemented as quickly as possible once the consultation period is closed.”

The PDA, additionally, queried the relevance of the 1 April 2019 date for the payment of arrears of survivor pension.

3.3 Response

The consultation explained the steps legislative necessary to comply with the Goodwin judgment. The department welcomes the support received for the proposed changes and will proceed with the amendments.

In his Written Ministerial Statement, the Chief Secretary to the Treasury said:

“the government is committed to providing public service pensions that are fair for public sector workers and for taxpayers. The government’s position remains that benefit entitlements should normally be determined based on the rules applicable at the time the member served, to maintain fairness for active scheme members and the taxpayer.”

The amendments address the sexual orientation discrimination highlighted by the claim and are retrospective to 5 December 2005. This is the date from which a same-sex civil partnership could have been formed or recognised in the UK under the Civil Partnership Act 2004, and the date from which there could have been a difference in treatment.

The changes to scheme regulations mean the value of survivor pensions payable to some male survivors of female members may increase. Where this relates to a female member who died on or after 5 December 2005 there may also be a payment of arrears due to the survivor. If the survivor has also died, since 1 April 2019 (this complies with the date the Walker v Innospec Ltd judgment equalisation took effect in the NHS Pension Scheme Regulations), any arrears are payable to their estate.

The increase to the survivor pension payable may also impact the position of female members who purchased increased survivor benefits for their male spouse or civil partner, either by additional voluntary contributions or electing for a reduced lump sum at retirement. Where increased benefits are payable to male surviving spouses and civil partners of female members as a result of this amendment, female members who purchased additional benefits for their male spouse may be entitled to a refund of any additional contributions paid or a further lump sum payment.

The NHSBSA will identify and contact the members and recipients of survivor pensions who benefit from this amendment. Members and recipients of survivor benefits do not need to take any action to instigate this process.

4. Entitlement for survivors of opposite-sex civil partners

As a consequence of the Goodwin judgment the proposed amendments remove the amendments introduced in the Civil Partnership (Opposite-sex Couples) Regulations 2019 (S.I. 2019/1458) (the ‘Civil Partnership Regulations’). Once those amendments are removed, opposite-sex civil partner pensions will be equalised with those provided for widows due to the definition of ‘civil partnership’ in the 1995 Regulations, which refers back to the 2004 Act and includes both same-sex and opposite-sex couples.

The changes have retrospective effect from 2 December 2019.

4.1 Background and consultation proposal

The Civil Partnership Act 2004 (the ‘2004 Act’) came into force on 5 December 2005, establishing the right for same-sex couples to form a civil partnership. The act granted civil partnerships legal rights and responsibilities very similar to civil marriages. Survivor pensions for same-sex civil partners were first introduced as a scheme benefit in the 1995 Regulations from 5 December 2005.

In February 2018, the government commenced a review of civil partnerships with a view to expanding them to include opposite-sex couples. In June 2018, the Supreme Court handed down its judgment in R (on behalf of Steinfeld and Keidan) v the Secretary of State for the International Development, which held that restricting civil partnerships to same-sex couples was incompatible with the European Convention on Human Rights.

Consequently, the Civil Partnership Regulations, which extended civil partnerships to opposite sex couples, came into force on 2 December 2019.

An important change made by the Civil Partnership Regulations was to alter the basic definition of “civil partnership” in the 2004 Act to include both same-sex and opposite-sex couples. The 1995 Regulations adopted the definition of civil partnership and also “civil partner” set out in the 2004 Act, which meant that any references to civil partners or civil partnerships in those regulations included both same-sex and opposite-sex couples.

The Civil Partnership Regulations amended the 1995 Regulations to give effect to the government policy at the time, which was to treat opposite-sex civil partners in the same way as opposite-sex married couples. This meant that female surviving civil partners of male members were entitled to the same benefits as female surviving spouses (widows) of male members. Male surviving civil partners of female members, on the other hand, were entitled to the same benefits as male surviving spouses (widowers) of female members.

Following the government’s decision in Goodwin to equalise the benefits payable to male civil partners and spouses of female members, it is necessary to remove the amendments made by the Civil Partnership Regulations to the 1995 Regulations.

4.2 Consultation findings

None of the 35 respondents directly commented on these amendments.

4.3 Response

The amendments are consequential and therefore the department is to proceed with these amendments.

5. Non-pensionable one-off payments from the New to Partnership Payment (N2PP) Scheme

The consultation proposed amendments to the 1995 Regulations, 2008 Regulations and 2015 Regulations to ensure that payments and allowances under the N2PP Scheme are non-pensionable in respect of General Practitioners (GP) and non-GP Provider members. Amendments have retrospective effect from 1 April 2020.

5.1 Background and consultation proposal

NHSE&I introduced the N2PP Scheme from 1 April 2020, as part of the series of interlocking recruitment and retention initiatives outlined in the update to the GP contract agreement in England.

The N2PP Scheme seeks to support general practice health care professionals in England to become partners within a practice. Under the N2PP Scheme, new partners receive a one-off payment of up to £20,000, plus a £3,000 business training allowance to support their establishment as a partner. A contribution to on-costs (tax and national insurance) of up to £4,000 may also be made.

The proposed changes ensure that N2PP Scheme payments to all recipients are non-pensionable. This is in line with current NHS Pension Scheme policy on non-regular payments, including bonuses , which are non-pensionable in respect of officer members.

5.2 Consultation findings

Two respondents commented on the consequential changes to the NHS Pension Scheme Regulations as a result of the N2PP Scheme.

AISMA, a national network of over 75 firms providing expert advice to medical practices, sessional GPs and hospital doctors, confirmed that they agree to the proposed non-pensionable status of N2PP Scheme payments.

A respondent, who commented using the consultation platform, thought that making the N2PP Scheme allowances and payments non-pensionable was less beneficial to scheme members nearer to retirement age. They suggested that members should be able to decide whether to have these allowances and payments treated as pensionable or non-pensionable.

5.3 Response

The policy as set out by NHSE&I is for allowances and payments from the N2PP Scheme to be non-pensionable and therefore the department is ensuring that the policy is equally applied to all scheme members.

The N2PP Scheme payments and allowances are not a permanent feature of NHS Pension Scheme remuneration, therefore, to maintain fairness and parity the amendments ensure they are non-pensionable in respect of both GPs and non-GP Provider members.

The department is to proceed with these amendments.

6. Reform of the 1995 Regulations final pay controls

The consultation proposed amendments to the 1995 Regulations to:

• increase the allowable amount from Consumer Price Index (‘CPI’) plus 4.5% to CPI plus 7%
• include further exemptions to the final pay control regulations

6.1 Background and consultation proposal

Final pay controls are provided for under Regulation D3 of the 1995 Regulations to safeguard the NHS Pension Scheme from the increased cost of paying pension benefits inflated by excessive late career pay rises. The controls are only relevant to members with final salary pension benefits.

Under Regulation D3, pensionable pay increases in the last three years before retirement cannot exceed an ‘allowable amount’ without the employer incurring a charge. Currently, a pay increase is considered ‘excessive’ if the annual percentage increase in pay for one or more of a member’s final three years’ service prior to retirement exceeds CPI plus 4.5%.

The employer is charged an ‘excess employer contribution’, known as a final pay control charge, for the cost of pension benefits calculated on pay increases above the allowable amount. This ensures that the employer meets the cost of paying the excess pension benefits and not the NHS Pension Scheme, its members or other employers. The member’s increased pension benefits are unaffected by the final pay control charge issued to their employer.

Subsequent to the implementation of the final pay control policy in 2014, two exemptions were introduced to prevent employers receiving a final pay control charge where there has been a significant pay increase for reasons outside of their control. These amendments exempt pay increases due to an increase in the national minimum wage and pay increases pursuant to the ‘Framework agreement on the reform of Agenda for Change’ (AfC) adopted on 27 June 2018.

Having operated final pay controls since their introduction, the NHSBSA raised concerns in 2018 that the volume of charges had significantly increased and therefore was creating an administrative burden. Separately, several employers expressed concerns that they had been charged for large pay increases which were the result of promotions which they considered did not properly fall within the policy intention.

Consequently, taking these comments and the time that had passed since the introduction of the policy into consideration, the department decided to review the policy. The department asked SAB to review the final pay control policy and consider options for reform.

SAB concluded that the final pay controls policy should be retained as it still served an important purpose, but that it needed reform and made four recommendations for change. After careful consideration, the department decided to take forward two of the recommended changes, namely, to increase the allowable amount to CPI + 7% and to include further exemptions in the final pay control Regulations. These changes were the subject of this consultation.

Analysis produced by the Government Actuary’s Department (GAD) has shown that 7% is the point beyond which the volume of cases falls significantly, such that pay increases in excess of this can be considered exceptionally large. Therefore, increasing the allowable amount to CPI + 7% not only removes a significant number of cases from the scope of the regulations, but also better serves the original policy intention, to capture excessive pay increases.

As part of the consultation the department also included proposals to introduce a number of further exemptions to the final pay control policy:

• an exemption relating to pay increases that are in line with NHS terms and conditions that have been formally approved by the Secretary of State. This would include pay increases due to re-banding where this is authorised under particular NHS terms and conditions, as well as pay rises under nationally agreed contracts and framework agreements

• an exemption to exclude an increase to pensionable pay as the result of a National Clinical Excellence Award (CEA), as these are outside an employer’s control

• an exemption to exclude pay increases due to promotion on the basis of fair and open competition

• an exemption in respect of non-GP providers to exclude pay increases due to practice profits increasing in the final three years before a member retires, and their pensionable pay increases beyond the allowable amount, if their percentage share of the profits did not increase during this period or, if their share did increase, it was the consequence of another partner leaving the practice

• an exemption to exclude an increase in pensionable pay that is solely due to the ending of a salary sacrifice arrangement, as these are outside an employer’s control

Increasing the number of exemptions permitted ensures that charges are issued only in cases where increases are unjustifiably large, by allowing the NHSBSA to test justification from employers with greater precision. Employers who seek to increase staff pay close to retirement beyond the allowable amount in circumstances not covered by an exemption will remain in scope of a charge, in line with the original policy aim to recoup the cost of unjustifiably large pensionable pay increases.

The department also consulted on amendments so that employers who had a charge notified on or after 1 April 2018 could apply, within 6 months of amendments to Regulation D3 coming into force, to have the charge redetermined under the amended regulations. 1 April 2018 was identified as the most appropriate date, as this was the start of the scheme year during which the department became aware of potential difficulties in administering the final pay control provisions and commissioned SAB to undertake a review.

6.2 Consultation findings

The consultation responses received by email contained more detailed comments on the final pay control reforms. They were received from a range of stakeholders, including individuals, trade unions, the NHSBSA, NHS Employers and SAB.

The responses received were largely positive, and stakeholders agreed that the proposed amendments should be made. Notable responses included the following, from SAB:

“SAB particularly welcomes the proposed amendments to the final pay control regulations of the 1995 Section. We are pleased that DHSC has based these proposed changes on SAB’s review of the policy and recommendations for reform.”

NHS Employer is the employers’ organisation for the NHS in England. Its response to the consultation is based on the collective views, feedback and suggestions received from employers in the NHS. They stated that:

“Employers strongly support the proposed changes to the final pay control regulations in the 1995 NHS Pension Scheme (the scheme). Employers agree final pay controls should be in place to protect the scheme against the cost of excessive increases in pensionable pay, and believe that the proposed changes will ensure employers are only charged where they award a pay increase that is within the aim of the policy. The proposals will also ease the associated administrative workload for employers locally, and for NHS Pensions.”

Likewise, the response from AISMA stated that:

“The changes to Final Pay Controls regulations are welcomed and will largely achieve the aim of removing those currently caught by this legislation inadvertently.”

6.3 Suggested further policy reforms

Several respondents suggested extra exemptions in addition to those already included in the consultation. These are covered in this section.

An exemption for pay increases arising where pay has been benchmarked against the AfC framework was a recurrent suggestion from respondents. The department is mindful that this occurrence is not uncommon in primary care, where pay is not mandated by AfC terms in the same way as it is for NHS Trusts, nonetheless many employers do elect to mirror AfC pay scales for their staff.

The 1995 Regulations currently exempt pay increases pursuant to the AfC framework, as adopted on 27 June 2018, however stakeholders noted in their responses that clarification was needed on whether pay increases which are benchmarked against AfC, but not paid as AfC, would be covered. A response received from a GP Practice Manager stated that this is important to recruitment and retention within primary care and noted that GP practices require certainty that they will not be ‘punished’ for aligning staff pay scales with nationally agreed contracts such as AfC.

Also, in relation to GP practices, two respondents requested a further exemption to cover pay increases arising as a result of a percentage share increase due to a GP partner at the same practice reducing their sessional commitment^{[footnote 1]}. This was seen as a logical extension of the proposed exemption for pay increases arising as a result of a profit share percentage increase due to another partner leaving the practice, as both scenarios are out of the employer’s control.

Some respondents commented that they would like to see the introduction of an appeals mechanism, that would allow employers a formal route through which they could dispute the final pay control charge they had been issued.

The department also received several requests for an online calculator that could be used by employers for planning purposes. Responses stated that this would make it easier for employers to predict in advance whether they would be likely to incur a final pay control charge as a result of awarding an employee a pay increase in the last three years before their retirement, and if so then how much that charge would be.

A number of comments were received on the possible equalities issues arising from the amendments. These comments focused on the potential for indirect age discrimination as a result of the proposed policy reform only affecting 1995 Section members. Responses suggested that as 1995 Section members are currently more likely to be older, that employers may be less inclined to award pay increases to these older members of staff if they think that they may then incur a charge, therefore giving rise to age discrimination.

One respondent expressed their disappointment that the question on the webform asking ‘are there any further considerations and evidence that you think the department should take into account when assessing any equality issues arising as a result of the proposed changes, and in particular whether there may be any potential impact on people who share a protected characteristic (age, disability, gender re-assignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex (gender) or sexual orientation)?’ was limited to chapter six only.

Several comments were received concerning the proposed implementation date of the policy reforms, with one respondent specifically requesting that the amendments be applied retrospectively to the introduction of the policy in 2014. Another respondent questioned what would happen to charges already paid.

Finally, the NHSBSA noted in its response that sub-paragraphs 12(B) and 12(D) of the draft regulations gave employers six-months’ notice, from April 2021 to September 2021 to claim a refund of a final pay controls charge issued since 1 April 2018. The NHSBSA therefore commented that if the regulations come into force after 1 April 2021 this would lessen the notice period given to employers. In order to maintain the proposed six-month notice period, the NHSBSA suggested a change to the drafting so that the notice period starts on the commencement date of the amended 1995 Regulations.

6.4 Response

The department welcomes the overall positive reception to its proposal to reform the final pay control policy reforms and intends to proceed with the amendments to Regulation D3 of the 1995 Regulations as proposed in the consultation.

The department has also evaluated the further policy reforms suggested by respondents during the consultation period and after careful consideration the concluded that some of the suggested exemptions were not appropriate, and as such will not be taken forward. However, the department has worked to further develop two of the suggestions made by respondents, which it considered would be welcomed by stakeholders.

The first of these suggestions concerns pay increases awarded where an employer has benchmarked a member’s pay against a nationally agreed contract, such as AfC. The department understands that this is a regular occurrence in primary care and does not wish to treat these employers differently if they choose to benchmark staff pay against a nationally agreed contract.

The department confirms that such increases will be covered by the amendment to exempt pay increases in line with certain nationally agreed contracts. To ensure that the policy operates as intended, employers seeking to use this exemption will be required to evidence their continuing intention to pay in line with such terms to the NHSBSA. This is consistent with the proposed exemption for pay increases awarded following fair and open competition, where evidence is required in order to determine whether a pay increase is exempt.

The second suggestion concerns pay increases due to an increase in profit share percentage that was the result of another partner reducing their sessional commitment. Having considered this issue, the department concluded that an additional exemption is appropriate. This is consistent with the department’s rationale that a pay increase because of a profit share percentage increase arising from another partner leaving the practice is outside of the employer’s control and therefore should be exempt.

The department considers that there is no requirement for a new appeals mechanism, as employers who wish to appeal against the application of the final pay control regulations can do so via the NHS Pension Scheme’s existing Internal Dispute Resolution Procedure, details of which are available on the NHSBSA’s website. In order to maintain the policy intention and ensure that it is applied fairly and consistently, it is not appropriate to have a separate appeal process specifically for the final pay control policy.

The department also considered the requests for an online calculator to allow employers to predict final pay control charges. As the SAB review concluded, the final pay controls policy serves an important purpose, and the department maintains the view that excessive pay increases that cannot be justified under one of the exemptions should remain in scope of a charge. An online calculator should not be used to determine pay increases for staff, instead pay should be based on independent factors, such as any recommended uplift from the independent Pay Review Bodies, an appraisal of the job requirements, benchmarking (if appropriate) and setting an appropriate salary. As such, this suggestion will not be taken forward. The department remains committed to providing clear information to scheme members and employers.

In relation to the comments received on the potential for age discrimination as a result of the final pay controls policy, the department maintains that the policy is not expected to have a negative impact on people who share a protected characteristic as final pay controls are payable by the employer. The department considers that the reforms consulted on, which will now be taken forward, will help to address any potential age discrimination that may be an indirect result of the current policy. For example, once the changes come into force, employers who award promotions to their staff following fair and open competition will be out of scope of a final pay control charge, thereby eliminating any risk of potential age discrimination.

Having reviewed the response concerning the wording of the question on equalities’ impacts, officials at the department noticed that an error occurred in the formatting of the consultation document. The department sent its apologies to the respondent in question for any misunderstanding caused by the error, and offered them the opportunity to put forward any comments on the corrected question, which should have made reference to chapter nine of the consultation document and not chapter six. The department received a reply from the respondent via email and the concerns raised by the respondent have been included in the department’s consideration of its duties.

With regards to the 1 April 2018 implementation date for the amended policy, the department recognises that some employers who have paid a final pay control charge, or who have been issued with a charge but have not yet paid it, may wish to have the opportunity to have the charge reassessed against the new allowable amount and exemptions. As the consultation document outlined, the date of 1 April 2018 is appropriate as this is the start of the scheme year during which the department became aware of potential difficulties in administering the final pay control provisions and commissioned SAB to undertake a review.

Finally, in response to the NHSBSA’s comment on the commencement date of the regulations, the department will continue with the proposal to have a six-month window for employers who have had a charge notified on or after 1 April 2018 to apply to have the charge redetermined under the amended regulations. However, the six-month period for employers to apply to have a recalculation has been amended to coincide with the day the regulations come into force, rather than 1 April 2021. The department also recognises that ensuring that employers can access clear information on how to apply for a reconsideration is very important, and will be working proactively with the NHSBSA to ensure that all those who are eligible to apply within the six-month period are able to do so.

As stated in the consultation document, the department will undertake a further review of the final pay control policy two years after the amendments to Regulation D3 take effect.

7. Miscellaneous amendments

The consultation also presented a series of miscellaneous and consequential amendments.

These introduced or updated definitions in the NHS Pension Scheme Regulations and made minor corrections and technical amendments to refine the operation of the rules.

7.1 Background and consultation proposal

Introducing and updating definitions in the NHS Pension Scheme Regulations

NHS Standard Sub-Contract

Regulations 3,14, 19 and 30 amend Regulation A2 in the 1995 Regulations, Regulations 2.A.1 and 3.A.1 in the 2008 Regulations and Schedule 15 in the 2015 Regulations, respectively, to update the existing definition of an “NHS standard sub-contract”.

Regulation 19 is an additional regulation required to amend Part 3 of the 2008 Regulations to include the definition change to Regulation 3.A.1. The amendment to Regulation 3.A.1 was unintentionally omitted from the consultation draft regulations and is made in addition to amending Regulation 2.A.1, as both these regulations contain definitions.

The amendments ensure the definition in the 1995 Regulations, the 2008 Regulations and the 2015 Regulations of NHS standard sub-contract reflects the current guidance from NHS England.

Locum Practitioner

Regulations 12 and 19 amend the definition of “locum practitioner” in Schedule 2 of the 1995 Regulations and Regulation 3.A.1 of the 2008 Regulations to include individuals engaged under a contract of services by the NHS Commissioning Board, as well as a Local Health Board.

The amendments ensure consistency in the 1995 Regulations and the 2008 Regulations with the definition of “locum practitioner” in the 2015 Regulations, where it is already defined.

Dental Performer

Regulation 30 amends Schedule 15 of the 2015 Regulations to introduce a definition of “dental performer”. The same definition has already been introduced into the 1995 Regulations and 2008 Regulations.

7.2 Guarantee date

Regulations 133 - 140 of the 2015 Regulations cover the transfer out of pension benefits from the 2015 Scheme. Regulation 135 requires a member who wishes to transfer out to make a written application for a statement of entitlement. The statement of entitlement contains a “guarantee date”. Regulation 136 requires a member who has received a statement of entitlement and who wants to proceed with the transfer to apply for a transfer payment to be made. That application must be made within the period of three months beginning with the guarantee date (Regulation 136(2)).

Regulation 25 amends the definition of the guarantee date relating to the transfer of pension benefits from the 2015 Scheme so that the guarantee date is correctly set as being within the period of 10 days ending with the date on which the member is provided with a statement of entitlement (in respect of a transfer value payment).

Other technical amendments

Forfeiture of pension benefits

Where a member of the NHS Pension Scheme or other beneficiary is convicted of certain offences, the NHS Pension Scheme Regulations give the Secretary of State power to direct that part or all of the person’s pension benefits be forfeited.

Regulations 37, 55, 72 and 91 of the NHS Pension Schemes, Additional Voluntary Contributions and Injury Benefits (Amendment) Regulations 2019 (S.I. 2019/418) sought to introduce a power to suspend the right to or the payment of benefits, pending a forfeiture decision, where a member has been charged with or convicted of relevant offences.

However, in a judgment handed down on 17 January 2020 the High Court quashed the relevant regulations on the basis that the proposed suspension power was unlawful (see R. (on the application of the British Medical Association) v the Secretary of State for Health and Social Care).

In addition to enacting the suspension powers, these regulations also introduced certain minor amendments required as a consequence of the Supreme Court’s decision in Brewster, Re Application for Judicial Review (Northern Ireland) [2017] UKSC8.

The Brewster judgment removed the previous requirement to nominate co-habiting partners for survivor benefits. The 2019 amendments sought to substitute “surviving scheme partner” for “nominated partner” at relevant junctures in each of the NHS Pension Scheme Regulations. These consequential amendments are still required and therefore need to be re-enacted.

Regulations 11, 18, 23 and 26 amend Regulation T6 of the 1995 Regulations; Regulations 2.J.7 and 3.J.7 of the 2008 Regulations; and Schedule 3 of the 2015 Regulations, respectively, to replace references to “nominated partner” with “surviving scheme partner”.

The amendments to the 1995 Regulations and the 2008 Regulations have retrospective effect from 1 April 2008.

The amendments to the 2015 Regulations have retrospective effect from 1 April 2015.

Lump sum on the death of a pension credit member after the pension credit becomes payable

Regulations 17, 22 and 29 amend Regulations 2.E.20 and 3.E.20 of the 2008 Regulations and paragraph 8 of Schedule 14 of the 2015 Regulations, respectively. All three regulations provide for a lump sum to be paid in circumstances where a pension credit member dies within the first five years after their pension credit pension has come into payment.

The amount payable is five times the annual amount of the pension credit less payments already made to the pension credit member. The annual amount of the pension credit and the payments already made for the purposes of this calculation are the basic amounts without any pensions increases that may apply. Any pensions increase then due to be paid on the lump sum is provided for by the Pensions (Increase) Act 1971.

The regulations remove incorrect references to increases under the Pensions (Increase) Act 1971 from the three regulations to ensure that such increases are not applied twice, once by virtue of NHS Scheme Regulations and twice by virtue of the Pensions (Increase) Act 1971.

Early retirement on ill health

Regulations 2.D.8 and 3.D.7 of the 2008 Regulations provide ill-health retirement benefits for officer and practitioner members respectively.

Paragraph (5) of Regulations 2.D.8 and 3.D.7 provides for service to be increased by a tier 2 enhancement period where the member has had a break in pensionable service of 12 months or more and it is more beneficial to the member for service to be treated as continuous. However, both regulations should have also provided for service to be increased by the enhancement period where the member has not had any breaks of over 12 months. Regulations 16 and 21(2) correct paragraph (5) of Regulations 2.D.8 and 3.D.7 accordingly.

Paragraph (7) of Regulation 3.D.7 provided for uprated earnings to be increased in respect of a tier 2 pension if a member has both officer and practitioner service. Regulation 21(3) amends paragraph (7) to ensure that the increase to pensionable earnings correctly applies in circumstances where a member has only practitioner service.

While the amendments to Regulations 2.D.8 and 3.D.7 have retrospective effect from 1 April 2008, there is no need for members to contact NHS Pensions, as the NHSBSA has confirmed that ill health benefits have been continually calculated according to the proposed change to paragraph (7) since this date.

7.3 Amendment to the Injury Benefits Regulations

When determining the amount of injury benefit allowance payable to a successful applicant, certain Department for Work and Pensions (DWP) benefits are deductible from the injury benefit awarded, in accordance with Regulation 4(6)(b) of the Injury Benefits Regulations.

Such benefits include entitlement to DWP’s Employment and Support Allowance (ESA) established under section 1(2)(a) of the Welfare Reform Act 2007 (WRA2007). The WRA2007 was amended by the Welfare Reform Act 2012 (WRA2012) to include sections 1A and 1B in relation to the duration of a contributory award of ESA. If an ESA award has been time-limited under section 1A, entitlement to an award continues under section 1B if the conditions in that section are met.

Regulation 32 amends Regulation 4(6)(b)(vi) of the Injury Benefits Regulations to clarify that an ESA award payable under section 1B of the WRA2007 (provided for by section 52 of WRA2012) is also an accountable benefit when determining the amount of Injury Benefit allowance payable.

The amendments have retrospective effect from 1 May 2012, the date section 52 of the WRA2012 came into force.

As part of the amendments introduced by the NHS Pension Schemes, Additional Voluntary Contributions and Injury Benefits (Amendment) Regulations 2019 (S.I. 2019/418) to remove the requirement that a nomination must be made in order for an otherwise qualifying partner to receive a survivor benefit on the death of a member, regulation 102 substituted a new paragraph (3) for the existing paragraph (3) of Regulation 7 of the Injury Benefits Regulations. Sub-paragraphs providing for the re-instatement of a discontinued partner pension on hardship grounds were incorrectly omitted from new paragraph (3).

Regulation 33(2) corrects that omission by substituting a new paragraph (3) which re-introduces the unintentionally omitted sub-paragraphs with retrospective effect from 1 April 2019.

Regulation 7 of the Injury Benefits Regulations provides for the payment of allowances to surviving partners. Paragraph (3A) was inserted into Regulation 7 by The National Health Service (Pension Scheme, Injury Benefits, Additional Voluntary Contributions and Compensation for Premature Retirement) (Civil Partnership) Amendment Regulations 2005 (S.I. 2005/3074) and aimed to ensure that a surviving widow or widower whose partner died before 5 December 2005 would not lose their allowance if they later formed a same-sex civil partnership or lived with a person of the same-sex as if they were civil partners. At the time when paragraph (3A) was enacted, only same-sex couples could form a legally-recognised civil partnership and therefore the reference to forming a “civil partnership” in that paragraph was limited to same-sex civil partners. However, following the extension of civil partnerships to opposite-sex couples, the reference to “civil partnership” in paragraph (3A) includes opposite-sex civil partnerships. This was not the intended effect of paragraph (3A) of Regulation 7 when the relevant amendments were made.

Regulation 33(3) therefore amends paragraph (3A) of Regulation 7 to clarify that the civil partnership referred to in this paragraph is a civil partnership formed with a person of the same-sex.

7.4 Consultation findings

None of the respondents made any comment concerning these miscellaneous amendments.

7.5 Response

The department will take forward the proposed amendments.

1. Within primary care, “session” is a common term used to refer to periods of time in which GPs see patients. The length of a session is not defined and can vary from practice to practice (although usually 4-4.5 hours). A GP that reduces their sessional commitment means a GP reducing their hours. ↩