Below is a definative appproach to how to fill the forms. It is not an easy read but it hopefully clears up the ambiguity
Guidance for the Completion of Net
Pensionable Earnings Declaration
(Part of the 2011/2012 Annual Reconciliation report)
The enclosed 2011/2012 end of year annual reconciliation report contains an estimate of
the net pensionable earnings or equivalent for every performer on the contractor’s GDS/
PDS contract.
The 2011/2012 annual reconciliation report has been produced in accordance with the Statement of Financial
Entitlements. NHS Dental Services have sent annual reconciliation reports to contract holders on behalf of
Primary Care Trusts (PCTs) and Local Health Boards (LHBs). NHS Dental Services has also sent copies of these
reports to the contracting health body for information.
What to do now
You are required by law,
a) to identify those of your performers who are partners in, or directors of, the contractor and
b) to enter the amount of seniority payments, maternity leave payments, paternity leave payments,
adoption leave payments or sickness leave payments paid under your contract or agreement.
You are also required to declare the actual net pensionable earnings earned within the contract by every
performer in the period 1 April 2011 to 31 March 2012.
For a number of reasons including some shown in the questions below, the estimated net pensionable pay
stated on the ARR may not be correct. If the estimated net pensionable pay is correct you must sign the
form and return it to NHS Dental Services in the pre-paid addressed envelope by 31 May 2012.
What to do next:-
Step 1
Calculate 43.9% of the GDS/PDS contract value. This identifies the ‘pensionable earnings ceiling’; i.e. the
maximum pensionable (superannuable) pay available for distribution to all the pensionable dentists at the
Practice.
If the Practice contract value subsequently rises through agreed over performance or contract adjustment or
falls through under performance claw back then this original calculation will need to be reworked when the
changes to the contract value are agreed.
Step 2
Identify any dentists at the Practice who are not members of the NHS Pension Scheme (NHSPS) such as;
• Dentists in receipt of their NHS pension
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• Dentists who have opted out of the NHSPS
• Associates who are incorporated and who cannot ‘pension’ their net income with effect from the 7th
November 2011.
Any net NHS income attributable to these dentists forms part of the ‘pensionable earnings ceiling’. It is
unlawful to allocate the NHS income of non-members of the NHSPS to any other dentist.
Step 3
Sole-Trader or Partnership
Allocate the pensionable income to dentists at the Practice as follows.
1. Identify the pensionable earnings ceiling.
2. Declare the pensionable pay of the Associates; this is their actual net GDS or PDS income.
3. Take account of the net GDS or PDS income of any non-pensionable dentists (Partners or Associates).
4. The remaining balance is the amount that the Sole Trader or Partners shall ‘pension’.
5. In the case of a Partnership the remaining pensionable pay (the balance) can be allocated between
the Partners as per the Partnership agreement.
6. By virtue of non-pensionable dentists working in a Practice the total pensionable income declared
may not reach the 43.9% ceiling.
Limited Company
Allocate the pensionable income to dentists at the Practice as follows.
1. Identify the pensionable earnings ceiling.
2. Declare the pensionable pay of the Associates; this is their actual net GDS or PDS income.
3. Take account of the net GDS or PDS income of any non-pensionable dentists (Shareholders or
Associates).
4. The remaining balance is the amount that the dentist Shareholders (who are active NHSPS members)
may ‘pension’ however they can only ‘pension’ the income they actually take in the form of salary
and dividends; any income that is not taken and left in the company is not pensionable.
5. By virtue of any non-pensionable dentists and income retained in the company the total pensionable
income declared by a limited company Practice may not reach the 43.9% ceiling.
6. Where a limited company Practice has mixed dental income (i.e. NHS and private) there is no need to
apportion salary/dividends between NHS and private income for NHSPS purposes. All salary/dividends
paid, up to the ceiling, are available for allocation as NHS pensionable income.
7. If salary/dividends paid by a limited company Practice do not reach the maximum available in any
pensions year then the shortfall is lost. The shortfall cannot be carried forward to the next pensions
year or allocated to any other dentist at the Practice.
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Your questions answered
Why do I have to fill in this form?
We need to know all the details shown on the declaration and for pension purposes the actual net
pensionable earnings earned by every performer in the period 1 April 2011 – 31 March 2012. We can
then ensure they have correct contributions paid into their pensions and that the maximum allowable net
pensionable pay for the contract has not been exceeded. The yearly earnings estimate that was notified to
the PCT or LHB for your performer(s) and entered onto the Payments Online system (the system used by the
health bodies to notify NHS Dental Services of your contractual arrangements) was only an estimate and the
amount each performer has actually earned may have been different during this period. We also would like
you to make sure that any non pensionable performers, i.e. not in the NHS Pension scheme, pay has been
taken into account in the your calculations in order to ensure the maximum allowable net pensionable pay
for the contract has not been exceeded.
Why do I have to make the declaration?
It is a contractual requirement to complete this declaration and is detailed in the Statement of Financial
Entitlement under paragraph 4.21 and paragraph 30 of schedule 3 to the GDS/PDS contracts regulations. It is
also a statutory requirement under The NHS Pension Scheme Regulations.
Why do you need to know who the partners and directors/shareholders of the contractor are?
It is a legal requirement under The NHS Pension Scheme Regulations.
What happens if I do not return the form by 31 May 2012?
There is a statutory obligation to return this form and you must return it signed even if there are no changes.
If your return is late or not received at all it may result in a zero pensionable pay return being notified to
NHS Pensions for all dentists on the return even though contributions have been paid.
When we opened our new contract I was nominated as a lead provider but we are still in partnership should
I include details of my partners?
No, we only need to know if you have been given a partnership provider number that starts with the figure
number 1 e.g. 123456.
What percentage can be considered as pensionable earnings under the contract that must not be exceeded?
The total pensionable income generated by a GDS/PDS dental practice cannot exceed 43.9% of your contract
value.
Please be aware that if your PCT/LHB changes the contract value before 30 June 2012 and after you have
calculated your ceiling and submitted your declaration, this may have implications on your submitted
declaration. The new contract value may change the contract ceiling making your declaration of
pensionable earnings exceed the ceiling and therefore invalid. If this is the case please supply a new
declaration on a form available on the NHS Dental Services website www.nhsbsa.nhs.uk/dental.
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Can a Provider (i.e. the Partner) ‘pension’ income for themselves in respect of their colleagues?
No. It is illegal for a NHS dentist (or any other scheme member) to credit themselves, for NHS pension
purposes, with NHS income from another colleague even if that colleague has opted out of the NHSPS.
For example if an associate’s NHS pay is £40k, however, they opt out of NHSPS the senior partner(s) cannot
increase their declared pensionable pay by £40k. We also need to know any non pensionable performers,
i.e. not in the NHS Pension scheme, in order to ensure the maximum allowable net pensionable pay for the
contract has not been exceeded.
What figures does the 2011/2012 estimate of NPE include?
The estimated NPE figure provided uses the estimated earnings figure of each performer entered on the
Payments Online system for 2011/2012 by the PCT /LHB and is the total of the payments scheduled by NHS
Dental Services on the April 2011 to March 2012 inclusive schedule runs. You should check the figures and if
your actual figures are different insert the correct net pensionable earnings earned for each performer for
the period 1 April 2011 to 31 March 2012.
Why do I have to declare what payments are made under my contract for seniority, long term sickness etc
when you already have the details?
We only know the amounts authorised by the PCTs or LHBs and these may differ from the actual amounts
paid by you to your performer(s).
Why have you not included details of additional payments in the annual reconciliation report?
We are not required to provide this information in the annual reconciliation report.
What happens if a performer left and I forgot to inform the PCT/LHB?
We need to know precisely the net pensionable earnings earned by each performer in the period 1 April
2011 to 31 March 2012, so if a performer left but contributions continued to be taken for that performer, the
PCT/LHB and you may need a refund of the contributions paid on that money. Please therefore enter the
figure for the period up to when the performer left.
What happens if I paid my performer more than the amount I notified to the PCT/LHB?
We need to know precisely the net pensionable earnings earned by each performer in the period 1 April
2011 to 31 March 2012 so the correct figure should be entered onto the form. When this is processed, the
additional contributions will need to be deducted from you and the PCT/LHB in order that the pension for
the performer is correct.
What happens if I paid maternity or long-term sickness to my performer, should I include it?
The actual net pensionable earnings must not include any of these items. The figure we require is the net
pensionable earnings earned for each performer in the period 1 April 2011 to 31 March 2012. Additional
adjustment items should not be included. However, any seniority, long-term sickness, adoption, maternity
and paternity payments should be entered in the boxes provided.
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What happens if I have had negative schedules during the 2011/2012 year?
Superannuation calculations are based on the estimates of net pensionable earnings entered on the
Payments Online system. Once the negative amount is cleared all superannuation contributions will be
taken. The net pensionable earnings earned figure you declare will be used to calculate the 2011/2012
contributions in July 2012. These will show on the July 2012 schedule paid on 1 August 2012 unless the
contract is in negative in July 2012 in which case the calculations will show on your next positive schedule.
What happens if I have had a claw back situation in year 2011/2012?
Once the claw back has been repaid you must complete a new declaration (ARR) for whichever year the
clawback was for as it may have been for previous years. This is because the total contract value will have
been reduced therefore reducing the pensionable earnings limit for the practice.
What happens if I forgot to inform the PCT/LHB of a performer who was working under my contract?
You should contact the PCT/LHB to inform them and then complete the declaration with the performer’s
name and the net pensionable earnings earned in the period 1 April 2011 to 31 March 2012.
What happens if my performer works at another practice for another provider?
Both providers will complete a separate form in respect of net pensionable earnings for the performer.
What happens if my performer is a re-employed practitioner i.e. retired and come back?
The performer will be shown on the report with a zero value and as they are already in receipt of a pension
no further contributions can be made.
What happens if my performer is a re-employed dentist who retired on ill health and under 50?
The performer may be shown on the report with a zero value because no-one has put any estimated
earnings on Payments Online and this may need to be clarified as the member is entitled to make further
contributions if they wish to do so.
Do I need to notify you of any superannuation deductions I have taken from the performer?
No, we need to know the net pensionable earnings earned in the period 1 April 2011 to 31 March 2012 only.
If my performer retired part way through the year, what do I enter onto the form?
You need to confirm that the net pensionable earnings earned by the performer up until their retirement is
as shown on the declaration, or enter the revised correct figure.
When will I know whether I have to pay any more contributions for my performer(s)?
You must ensure we have the form back signed by 31 May 2012 at the latest so it can be sent to the PCT/LHB
to enter onto the Payments Online system. The deadline for completing this whole exercise is the 30 June
2012 and we intend to process all adjustments on the July 2012 schedule paid 1 August 2012. Any additional
or refunded contributions will be shown on that schedule.
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Contact details
Dental data can be contacted via the NHS Dental Services Helpdesk on 0845 126 8000 or email
dentaldata@dpb.nhs.uk. For general and Payments Online queries contact our helpdesk on
0845 126 8000 or email dentalservices@ppa.nhs.uk . Website www.nhsbsa.nhs.uk/dental .
V1 – 03/2012
How will each individual performer on my contract be informed of their final position for 2011/2012
contributions to be paid over to NHS Pensions?
Any adjustments required as a result of your declaration will be carried out in July 2012. All adjustments will
show on the July 2012 schedule paid 1 August 2012. Following the conclusion of this exercise the annual
SD86C superannuation form will be produced and sent to all scheme members.
What happens if I have performers (i.e. associates) who have incorporated (i.e. set themselves up as a limited
company)?
If a Performer incorporates (i.e. an associate sets themselves up as a limited company) they cannot be a
member of the NHS Pension Scheme. This is because the NHS Pension Scheme Regulations do not permit this.
NHS Pensions has offered the following explanation:-
“Whilst it is permitted for a GDS (or PDS Contractor) to incorporate and for the Providers (i.e. General Dental
Practitioner shareholders) to remain in the NHS Pension Scheme there are no provisions for a Performer (i.e.
Associate) to remain in the Scheme if they set themselves up as a limited company or similar.
When the Associate incorporates the contractual arrangements change in pension terms. The GDS (or PDS)
Contractor sub-contracts with a company, rather than contracts with an individual, and the company sends
the Associate to perform the work. Under The NHS Pension Scheme Regulations the limited company created
by the Associate is not recognised as a type 1 Dental Practitioner.”
What happens if I have performers (i.e. associates) who incorporated (i.e. set themselves up as a limited
company) but didn’t realise this would have an impact on their pension.?
There was a deadline which was the subject of Parliamentary approval that stated that an incorporated
Associate (i.e. a limited company Associate) could not be a member of the Scheme with effect from the 7th
of November 2011. Associates who wished to remain Scheme members were advised to put arrangements in
place by that date to ensure they could comply.
It meant that their previous Scheme membership remained intact and that they were not eligible for a
refund of contributions.
Anyone who elected to remain incorporated would not be allowed to accrue future Scheme membership
from that date.