Getting the most from the NHS Pension Scheme

Q. I am a performer with an NGDS contract. I’m not clear what level of pension contributions is being made on my behalf by my Contractor and the PCT. How can I find out more?

A. Your pension contributions should be based on the gross value share of the contract apportioned to you. Of that gross value 56.1% represents notional expenses; the remaining 43.9% represents your earnings for pension purposes. This is known as your pensionable income. This amount may be different to what you actually receive in payment from your practice owner.

You should be paying pension contributions on your pensionable income at different rates or tiers depending on how much it is. Most dentists will pay either 6.5% or 7.5%.

At the year-end you and your principal, who is the contractor, should agree the amount of pensionable pay you have received and the pension contributions that have been allocated to you and made on your behalf. It is important that you keep safe a record of this each year.

Your contractor should then make a return to the PCT reflecting the pensionable pay allocated to him/herself and all the performers within the practice. It would be good practice for copies of that return to be issued to each performer.

It is vitally important that you retain copies of all documents related to pay and pensions so that any mistakes made can be rectified in the future.

Q. I am in a long-term relationship. Will my partner benefit from the NHS Pension Scheme in the event of my death as we’re not married?

A. From 1 April 2008 nominated partners, as well as spouses and registered civil partners, have been able to receive dependents ‘survivor’ benefits. If you want to nominate your partner to receive a survivor pension after your death, you should complete form PN1 3/2008 and jointly sign the declaration. This form is available on the NHS Pensions Agency website www.nhspa.gov.uk.

In order for your nomination to be accepted certain conditions must be met. These include that you and your partner:

• have been living together in an exclusive long-term relationship for at least two years

• are free to marry or to enter a civil partnership

• are financially interdependent i.e. you rely on your joint finances to support your standard of living, although you do not need to be contributing equally.

You must also meet the conditions stated in the declaration section of the form.

This information alone won’t be sufficient to entitle your partner to a pension. In the event of your death, the scheme administrator will need to be satisfied that your relationship continued to meet the qualifying conditions for the payment of a survivor’s pension.

Evidence of financial interdependency will be required if your partner makes a claim following your death. This might include:

• confirmation that you lived in a shared household

• shared bank accounts or investments

• a loan or mortgage in joint names

• the existence of wills naming each other as the main beneficiary

If your relationship comes to an end, you should cancel your nomination by completing a ‘Request for cancellation of an existing nomination’ form (NOM1). You can get this form from the NHS Pensions website at: www.pensions.nhsbsa.nhs.uk or ask your Pensions Officer to download a copy for you. If you enter a new relationship, you may want to make a new nomination at some time in the future.

Q. I am an overseas dentist. My local PCT has given me the option to opt-out of the NHS pension scheme in exchange for higher fees. Is this a good idea or will it impact on my retirement?

A. You should take advice from a good Financial Adviser before deciding to opt out of the NHS Pension Scheme. Unless you only propose to stay a short time in the UK you are almost certainly going to be ill-advised to opt out. It is a very good scheme that represents 20% of your net income and its replacement would cost considerably more than that.

Wesleyan Medical Sickness provides career long financial advice based on an in-depth knowledge of the dental profession. For further information, visit their website at www.wesleyanmedicalsickness.co.uk or call 0808 100 1884.

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