If you haven't already received them, doctors can expect to receive NHS Pension Scheme Statements dropping through your letter box in the next couple of weeks.
NHS Pensions (and all Pension Scheme Administrators) must automatically give a Pensions Savings Statement (PSS) to all doctors who have a total deemed pension contribution greater than the annual allowance in the tax year. This statement must be issued by NHS Pensions to the doctor by 6th October following the end of the tax year.
Remember it is the doctor's individual responsibility to correctly report, through their self-assessment, the total amount of pension contributed in the tax year. You may still have a potential annual allowance charge even if you do not receive a Pension Saving Statement if you have significant contributions to a number of pension schemes but not enough in any one scheme to trigger an individual scheme administrator to send a Pension Savings Statement.
Requesting A Pension Savings Statement
Any doctor can ask NHS Pensions for information about their deemed pension contribution (or indeed any pension administrator about any contribution).
If the doctor makes the request in writing the NHS Pensions have to provide the Pension Savings Statement to the member by the later of 3 months following the receipt of the request or 6th October following the end of the tax year.
Information Available On The Pension Savings Statement
The following details must be provided:
- The total pension contribution for the doctor for the tax year in question
- The amount of annual allowance for the tax year concerned
- The total pension contribution for the doctor for the scheme for the previous 3 tax years
- The amount of annual allowance for the previous 3 tax years
HMRC Carry Forward Calculator
There is a HMRC calculator which helps work out an individual's deemed pension contribution and the resultant excess or unused annual allowance. This can be found at www.hmrc.gov.uk
Where You Might Need Help
It is important that all doctors understand how the NHS Pension Savings Statement works (and indeed all Pension Savings Statements). Where doctors' NHS Pension rights increased by £3,125 (when the annual allowance was £50,000) or by £2,500 (now that the annual allowance is £40,000) then the doctor's annual allowance has been completely utilised.
For doctors in the NHS Pension Scheme it is the interaction betweeen:
- Length of Service
- Level of Pensionable Pay
- Increases in Pensionable Pay
that work together to give rise to the potential for an annual allowance charge of otherwise. Remember Personal Pension contributions are also included in the calculation.