Independent financial advice only for BMA members Sessional

Independent financial advice only for BMA members Sessional GP’s Understanding your pension and its benefits

Independent financial advice only for BMA members Service for BMA Members § Re-launched on 12 September 2005 § Independent financial advice provided by Chase de Vere - Professionally qualified advisers - Specialist holistic advice

Independent financial advice only for BMA members Today we are looking at … § Understanding your NHS Pension - Recent and forthcoming changes § Being a Sessional GP and the effect on your NHS Pension Scheme and its benefits § Building financial security

Independent financial advice only for BMA members Areas of advice § § § § Income protection Life assurance and family protection Investments and savings advice Mortgages and re-mortgages* Estate planning NHS pensions scheme and benefits Pensions and retirement planning * Your home may be repossessed if you do not keep up repayments on your mortgage.

Independent financial advice only for BMA members Understanding Your NHS Pension

Independent financial advice only for BMA members The NHS Pension Scheme (1995 section)

Independent financial advice only for BMA members Key Facts § Final salary scheme for employed staff (officer) § 1/80 th pension accrual rate, 3/80 th lump sum - i. e. Doctor retiring with 40 years service will have pension equal to half final pay § CARE for practitioners (GPs) using dynamisation § 1. 4% CARE accrual rate, 4. 2% lump sum § Normal pension age 60

Independent financial advice only for BMA members The NHS Pension Scheme (2008 Section)

Independent financial advice only for BMA members Key Facts § For new joiners – from 1 April 2008 § Matches existing structure – final salary for employed and CARE for practitioners § Pension age increased to 65 § 1/60 th pension only accrual – no automatic lump sum § 1. 87% practitioner accrual – no automatic lump sum

Independent financial advice only for BMA members What are the proposed public sector pension scheme changes and how will they affect you? Expected Implementation date 1 st April 2015

Independent financial advice only for BMA members Changes § 1/54 Career Average Revalued Earnings (CARE) scheme § Revaluation of active members benefits by CPI + 1. 5% § Normal pension age linked to State Pension Age - Transitional (full) protection of NPA and current accrual for anyone within 10 years of current NPA on 1 April 2012 - Tapering protection for those within 13. 5 years of their current NPA i. e. delayed switch to new scheme § Increased contributions § Commitment to allow members who are TUPE’d* out to remain in the NHSPS *Transfer of Undertakings – Protected Employment

Independent financial advice only for BMA members Accrued benefits § All accrued benefits (pension and lump sum) earned up to 1 st April 2015 will be protected § Hospital doctors will keep their accrued 80 ths or 60 ths and these would be based on actual final pensionable pay at retirement § GPs accrued pensionable pay continues to be dynamised

Independent financial advice only for BMA members Your Accrued Benefits to 2015 § These benefits can be taken from current normal pension age § Option to pay additional contributions to fund early retirement of up to 3 years early without penalty (earliest age 65) § What happens if you still want the option to retire at age 60?

Independent financial advice only for BMA members Your personal contributions Pensionable pay in 2012/13 Contribution rate in 2013/14 Up to £ 15, 431. 99 5% £ 15, 432 - £ 21, 387. 99 5. 3% £ 21, 388 – £ 28, 823. 99 6. 8% £ 26, 824 - £ 49, 472. 99 9% £ 49, 473 - £ 70, 630. 99 11. 3% £ 70, 631 - £ 111, 376. 99 12. 3% £ 111, 377 and over 13. 3%

Independent financial advice only for BMA members Portfolio careers – contribution example Post Income Calculation method Value Tier 3 Sessions salaried GP £ 21, 000 Practitioner £ 21, 000 9% based on £ 30, 000 Appraisal Work £ 5, 000 Practitioner £ 5, 000 9% based on £ 30, 000 GP Locums £ 4, 000 Practitioner £ 4, 000 9% based on £ 30, 000 2 Sessions Hospital dermatology £ 12, 000 Officer (whole time equiv calculated) £ 60, 000 11. 3% based on £ 60, 000 WTE

Independent financial advice only for BMA members Contribution Tiers § Contribution level is calculated separately for both officer and practitioner income § So instead of 12. 2% on total earnings - Officer – 11. 3% based on whole time equivalent of £ 60, 000 - Practitioner – 9% based on total practitioner income of £ 30, 000 § With locum work it can be difficult to estimate earnings in advance § At the end of the year any arrears must be paid to the local area team

Independent financial advice only for BMA members Completion of forms Forms need to be completed to record your estimated and actual income. These are know as self assessment certificates These can be found at the below website http: //www. nhsbsa. nhs. uk/2529. aspx Guidance on their completion can be found at http: //www. nhsbsa. nhs. uk/Documents/Pensions/Type_2_Self_As sessment_Notes_2012 -13_. pdf

Independent financial advice only for BMA members New rules for locum – ‘employer contributions’ § § § Responsibility for the payment of employer 14% contribution changed on 1. 4. 13 Practices are now responsible for these payments Locums must collect employer contribution from the practice and MUST pay to the local area team along with employee contribution Cheques now payable to NHS Commissioning Board Locum forms A and B retained but amended If you choose to pension income it MUST be ALL NHS income

Independent financial advice only for BMA members How are your pension benefits calculated? – Officer vs Practitioner

Independent financial advice only for BMA members Why is there a difference? § Typically a hospital doctor has a more steady level of earnings which increases over time with responsibility and career progression § The whole time equivalent salary at retirement is used to calculate pension benefit - Part time service is scaled to its whole time equivalent - This ensures part time employees are not disadvantaged. GPs earnings tend to fluctuate more § It is therefore not always fair to calculate pension on a final salary basis

Independent financial advice only for BMA members What are the key differences? OFFICER PRACTITIONER § Salaried scheme – 1/80 th or 1/60 th of final pensionable pay for each year of service depending on scheme – plus potential lump sum § This is calculated on basic salary only and not any banded earnings § On completion of GP training your method of pension calculation changed § This is generally more beneficial § Pension is calculated using lifetime earnings § Dynamisation starts

Independent financial advice only for BMA members What types of GP does this effect? § On completion of GP training ALL types of GP have their pensions automatically calculated using the practitioner method § Any hospital service before becoming a GP is incorporated into the final calculation § Any concurrent officer service is typically treated as practitioner service § Non – detriment test carried out at retirement

Independent financial advice only for BMA members Will the Recent Pension Taxation Changes effect you? § Annual Allowance reduced from 6 th April 2011 to £ 50, 000 - This will reduce further to £ 40, 000 on 6 th April 2014 § What does this mean to you? § For defined benefit Occupational Pension Schemes it determines the amount you can accrue in your pensions in a given year § It IS NOT the amount you actually pay

Independent financial advice only for BMA members As a Sessional GP…. . § Whilst unlikely to affect you be aware…. . § If you receive two or more significant increases in your pensionable earnings in a three year period – take care! - e. g. GP Trainee to locum GP to salaried GP § You can come very close to exceeding the £ 50, 000 allowance - This will reduce further to £ 40, 000 from 6 th April 2014 § Tax is charged on any excess at your marginal rate

Independent financial advice only for BMA members Your NHS Sick Pay entitlement What will you receive and when?

Independent financial advice only for BMA members Sick Pay Benefits – Hospital doctors or GP Trainees Service Full pay Half pay 0 – 4 months 1 month Next 8 months 1 month 2 months 1 year 2 months 2 years 4 months 3 years 5 months 5 years + 6 months -

Independent financial advice only for BMA members Sick pay benefits – GPs § Salaried – GMS - In line with NHS sick pay scheme § Salaried – PMS - Locally negotiated with employer § GP Principal - In line with practice agreement § Locum - Zero

Independent financial advice only for BMA members Ill Heath Retirement Pension § Tier 1 – entitled to early payment of pension with no reduction § Tier 2 – entitled to an enhanced pension. The enhancement will be two thirds of prospective membership with a minimum of four years

Independent financial advice only for BMA members Life Assurance Provision § For younger doctors the scheme has improved - In the event of death if you are married, have a registered civil partner or have a non legal partner, survivor benefits will be paid - Benefits are also payable to any dependent children - Precise calculations dependent on your age, NHS service, NHS income and personal circumstances will ensure that your loved ones will be financially stable in the event of your death § Is this enough considering your own circumstances?

Independent financial advice only for BMA members Who would be entitled to survivors’ benefits? § Legally married husband or wife § Registered civil partner § Non legal partner - Must have been financially interdependent for two years - Partner must have been nominated and registered as such at the NHSPA - Must have been legally entitled to enter into a marriage or registered civil partnership at the time of the nomination § If no survivors’ benefits paid out then enhanced dependents’ benefits can be paid

Independent financial advice only for BMA members Whilst these benefits are excellent will they be enough? Let us consider the ‘what ifs’

Independent financial advice only for BMA members Protect your most important financial asset YOURSELF AND YOUR ABILITY TO WORK § § It pays for your housing It supports your family It supports your lifestyle and entertainment It supports your future plans and aspirations All of these things rely on a stable income AND What happens when your NHS sick pay ceases?

Independent financial advice only for BMA members Is Protecting your income all you need to consider? What about your future pension entitlement? Will you want to return to work full time? Will you want a break to recuperate fully, or spend precious time with your family? Would you want to take time off work if a loved one became seriously ill? Will you need to modify your home?

Independent financial advice only for BMA members Lifestyle Choices § In the event of a more serious illness or accident give yourself choices – retain control of your financial future - Protect against loss of future NHS Pension - Repay your mortgage or other liabilities - Make any necessary changes to your home § Following potential recovery from a serious illness - Give yourself the opportunity to return to work on a part time basis - Will you want a break to complete your recovery or spend time with your family? - Critical illness cover can give you these choices

Independent financial advice only for BMA members Protecting your Family § Ensure your mortgage and other liabilities are repaid on your death § We can accurately calculate the level of any life cover you may need § Full consideration is given to the benefits provided by the NHS Pension Scheme by our specialist advisers § Our primary objective is to maintain any dependants standard of living

Independent financial advice only for BMA members Locum GPs – Death in Service § Scheme membership for freelance GP Locums Scheme is activated by virtue of completing GP Locum forms A and B. A NHS GP Locum whilst in active pensionable employment is covered by the death in service scheme § A NHS GP Locum who is inactive (i. e. between jobs and not currently working at a Practice) is not regarded as being in active pensionable employment. - They will receive a lump sum of three times their pension on death rather than a death in service lump

Independent financial advice only for BMA members In summary § Understand your NHS Pension and how it is calculated § Build a strong financial plan – REVIEW, REVIEW § Take the opportunity to meet with a specialist BMA Services Independent Financial Adviser who can discuss your individual requirements

Independent financial advice only for BMA members How do we get paid? § Remember the initial meeting is without obligation § Product charges § Fees § Combination of the Two

Independent financial advice only for BMA members Your views are important

Independent financial advice only for BMA members Questions?

Independent financial advice only for BMA members Important Information If you are unsure of the suitability of this presentation to your circumstances please contact BMA Services, to introduce you to Chase de Vere for independent financial advice to be provided. The levels and bases of, and reliefs from taxation are subject to change, and any changes might be applied retrospectively. The Financial Conduct Authority does not regulate trust advice, tax advice, will writing or offshore investments. Issued by Chase de Vere Financial Advisers Limited. Chase de Vere Independent Financial Advisers Limited (registered in England Number 2090838) is authorised and regulated by the Financial Conduct Authority. A member of Swiss Life Group. Registered office: 60 New Broad Street, London, EC 2 M 1 JJ. VAT Registration Number 503 3745 71. BMA Services is a trading name and trademark of the British Medical Association. The British Medical Association is an introducer appointed representative of Chase de Vere who are independent financial advisers, authorised and regulated by the Financial Conduct Authority, licensed to use the BMA Services trademark and trading name.