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MedEconomics: Accountability, retiring early and childcare

FUNDING

Our PCT has issued a template prior to our annual review meeting. However, three of the pieces of information they require concern me.

They request that we provide details of how the practice has invested additional funding (enhanced services and quality framework monies) during 2004/5; details of any plans the practice has to invest additional funding during 2006/7; and they also want us to provide details of how the practice plans to develop during 2006/7.

I am not really concerned about the last one but I was unaware that practices had to account for their income/profit to the PCT as it certainly appears they want us to from the first two points.

The third point is fine, and answering it might help the PCT to help you, but as to the other two questions, the answer is very definitely 'mind your own business, it has nothing to do with you.' If you want to buy a Ferrari with the extra profit, it is entirely up to you, and they have no right to know.

Dr Tim Kimber

PENSIONS

I joined the NHS in 1975 and have been a full-time GP since 1979. I intend to retire this spring when I will be 56. I have five added years. Regarding the new pension arrangements from April 2006, what is the best date to retire?

Where a GP retires and takes benefits from the NHS Pensions Scheme (NHSPS) before the age of 60, an early retirement factor will be applied to take account of benefits being paid earlier than originally anticipated.

Added-years contracts must run until either age 60 or 65 to obtain full benefits.

When a GP retires early, they will only receive a proportionate amount of added years, depending on how long the contract has been in force.

Where benefits are taken before age 60 an early retirement factor will also be applied.

The new pensions simplification rules due to be introduced in April 2006 are unlikely to have much impact for most individuals unless the total capital value of their pension benefits is close to or exceeds the initial lifetime allowance limit of £1.5m.

So if an individual's pension benefits derive solely from the NHSPS, then they would need to have accrued a pension benefit of circa £65,000 per annum for the new rules to have an immediate impact.

If the prevailing lifetime allowance limit is exceeded when benefits are taken, the excess will be subject to tax of 25 per cent where benefits are taken in the form of a pension, or 55 per cent where benefits are taken as a lump sum.

Where benefits are expected to exceed the lifetime allowance, it is possible to elect for protection to be put in place before April 2006 to help minimise potential tax charges in the future.

If you feel at risk of this, you should seek specific advice.

Kevin Quinn

EARLY RETIREMENT

I had intended to take voluntary early retirement at age 56 on 3 April.

I have five added years; to gain the full benefit should I delay this to 2 May?

Regular premium added-years contracts must continue to either age 60 or 65 to gain the full benefits promised.

Where the contract is terminated early (i.e. before either age 60 or 65, depending on the original term) then only a relevant proportion of the number of added years purchased to that point will be paid.

These in turn will then be subject to the relevant early retirement factors (ERFs).

For example, if the contract had 10 years to run from age 50 to age 60 in order to secure five added-year benefits but the member retired early at age 55, then only half of the contract will have been fulfilled, hence only around 2.5 added years would be paid.

These added years (as well as benefits for the main scheme) would then be subject to ERFs of 0.754 for the pension and 0.864 for the tax-free lump sum.

Kevin Quinn

PENSIONS

In your answer to an Ask the Experts question (GP, 3 March), you felt that the majority of any benefit from enhancements to GP pensions as a result of the new GMS contract would be obtained by 6 April.

I am due to retire on 3 April 2006. I will have almost 40 years of service (this includes a purchase of five added years).

Will it be better for me to take my pension from 6 April instead of 3 April? Would the difference that would be gained be significant?

Because the NHS Pension scheme dynamisation figures are calculated on a monthly basis, there would be no significant difference between retiring on 3 April as opposed to waiting until 6 April.

Where added years are concerned, if your contract is a 'new style' contract and was originally written to age 65, then you would need to keep in mind that you would only receive a proportionate added years enhancement benefit.

Kevin Quinn

CHILDCARE

What agreements are in place for partners who have to take time off due to their children being ill?

At our practice the employees all either take holiday, unpaid leave or make the time up. The partners have no written agreement regarding this eventuality and would like some guidance.

There are no prescribed rules in place for partners other than what is agreed between you and - hopefully - recorded in your partnership agreement.

The employment legislation applies only to employees, although sex discrimination rules extend to partnerships.

So if there is something blatant about the arrangements in your partnership arrangements that appears to discriminate against female partners, this point might be worth raising as an encouragement to persuade male partners to agree to be more lenient.

That said, clearly the needs of the business must also be taken into account when determining whether something is unreasonable or not.

Lynne Abbess

ASK THE EXPERTS

NHS RULES - Dr Tim Kimber is a Littlehampton GP and a member of West Sussex LMC. Email: tim.kimber@nhs.net

ACCOUNTING - Stuart Williamson is a partner at accountants Williamson West. Email: ww@williamsonwest.com

LEGAL - Lynne Abbess is a partner at solicitors Hempsons. They can offer 10 minutes of free advice only, from 10am-4pm weekdays. Phone: (020) 7839 0278

PREMISES - John Hearle is a chartered surveyor and chairman of Aitchison Raffety. Email: john.hearle@argroup.co.uk or fax: (01727) 844472

ASK THE EXPERTS

PENSIONS AND PERSONAL FINANCE - Kevin Quinn is a financial planner at Ramsay Brown & Partners. Email: kevin@ramsaybrown.co.uk PMS

Dr Mo Dewji is a Milton Keynes GP and clinical director for primary care contracting. Email: mo.dewji@dh.gsi.gov.uk

ACCOUNTANCY AND TAXATION - Jenny Stone is a partner at Ramsay Brown & Partners. Email: jenny@ramsaybrown.co.uk or call (020) 8370 7746 9am-5.30pm weekdays

PRACTICE-BASED COMMISSIONING - Maggie Marum is a management consultant for the NAPC and runs its practice-based commissioning helpline. Call: (020) 7636 8626. www.napc.co.uk

PLEASE NOTE

Please ask for 'GP Ask the Experts'. You may be asked to book a full consultation if your request is time-consuming or difficult. Our specialists retain the right to refuse advice. The information in the Ask the Experts list is for information purposes only. The expert advice is intended to provide general guidance only. It should not be relied upon by readers, who should seek further professional advice. No legal responsibility can be accepted by GP for the experts' answers.

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