The NHS pension scheme as a medical director

It can be hard to know whether to pension your earnings as a medical or clinical director. Here we answer when and whether it is beneficial for you.
Location: UK
Audience: Consultants GPs
Updated: Friday 28 June 2024
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Additional pay from medical director duties

The standard practice is that if you are working whole-time (10 PAs) and undertake medical or clinical director duties in addition to your 10 PA (programmed activities) contract, this can only be pensionable if you are paid in the form of a responsibility allowance.

​If you are paid additional PAs for the performance of these duties these will not be treated as pensionable. As the treatment of such payments may be down to negotiation we recommend you discuss with your employer whether they are prepared to consider any additional payment.

If you are working part-time (fewer than 10 PAs), and undertake medical or clinical director duties, these can be pensionable if paid as PAs up to 10 PAs.

 

If you stop your duties before you retire

  • If you had membership previously in the 1995 section and maintain a final salary link by not having a break in pensionable service of 5 years or more then your total pensionable pay is calculated with reference to your pensionable earnings over the best of the last three years leading up to your retirement.  If you lose the final salary link then 1995 section benefits are calculated with reference to the pensionable pay leading up to the break.

  • If giving up your duties voluntarily and this results in a 10%+ reduction in your commitment and pay, then you may be able to apply for voluntary protection of pay. This means that service already accrued in the 1995 section can be based on pay leading up to the loss of the allowance and not on subsequent lower whole time equivalent pay. If there is an organisational change leading to a loss of pensionable pay then you can apply for protection of pay through no fault of the member irrespective of the level of the reduction in pensionable pay.
  • If you had membership previously in the 2008 section then your reckonable pay is calculated with reference to your pensionable earnings over the last ten years leading up to retirement or to a break in pensionable service of 5 years or more. If you lose the final salary link then 2008 section benefits are calculated with reference to the reckonable pay leading up to the break.

 

Is it always beneficial to pension my earnings?

Pensioning medical director earnings will increase the calculation of final salary linked 1995 and 2008 section benefits as well as the accrual of 2015 CARE scheme benefits.  If the medical director earnings fall outside of the best of the last three years then voluntary pay protection can be applied for so that 1995 section service can apply against the best of the last three years pay leading up to the loss of the higher pay.

This may boost the amount of pensionable service you accrue which may benefit your pension.

Any high earner who has concerns about pension growth exceeding the Annual Allowance may prefer not to pension these earnings and having them paid as additional PAs (where work is already undertaken at full time) or as an allowance specified as being non pensionable.  

Please remember that if you were to leave, or were to retire early due to ill health, or die in service during a period performing clinical or medical director duties, (or shortly after these duties had finished) and they had not been treated as pensionable, your pensionable pay will not include these earnings.

 

Making your pay pensionable

If you wish to pay pension contributions on this pay then it is sensible to agree this at the start of the arrangement.

It is not possible to subsequently alter your contract without an objectively justifiable reason for doing so, as the pensions agency may view this a purely an attempt to boost your pension.