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									                                                                                 Hesketh House
                                                                                 Lancashire FY7 8LG

                                                                                 Phone 0800 7313262 (Helplines)
                                                                                 01253 7748791774530 (SD55 Helpline)
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                                                                                 01253 774860 (Fax)

General Medical Practitioners
Practice Managers
Pension/Payroll Officers in NHS Trusts/Health Authorities                   Your ref
                                                                            Our ref GP Letter 8
                                                                            Date 16 March 1998

Dear Colleague


This letter provides further guidance about the improvements to the additional membership facility and year-end
updating on forms SD55 described in letter GP7. There is also information about Scheme contributions during
sick leave and the impact of Personal Medical Service pilots.

Yours sincerely

Business Development Manager

ANNEX 1 - Improved terms for buying additional membership

ANNEX 2 - Year-end updating on forms SD55

ANNEX 3 - Re-design of form SD55

ANNEX 4 - Contributions on Statutory Sick Pay

ANNEX 5 - Introducing your Client Centre

ANNEX 6 - Primary Care Act pilots

GP 8 Annex 1


Tax relief

1.1 Letter GP7 advised Practice Managers that members backdating an added years contract to a birthday on or
after 1 September 1997 would need to pay arrears of contributions before 6 April 1998 to claim tax relief for
them this year. This will be difficult of course for anyone newly considering a contract, particularly if they want
confirmation from the Agency before going ahead, although the Agency is giving priority to providing replies to GP Practice
enquiries about AVCs.

1.2 As the Inland Revenue has rejected a request by the Agency for dispensation to claim 97/98 contributions tax
relief in the following year, there is no simple answer to the problem. The following points may however help:

Only members backdating a contract with a start birthday between 1.9.97 and 5. 4.98 will be affected.

It may be possible to claim 97/98 contributions tax relief in the following year, if total pension contributions in 98/99
are less than the maximum 15% pa allowed by the Inland Revenue. For example, total contributions in 98/99 of
5 or 6% normal Scheme contributions, 4.5% additional contributions and 4.5% arrears of 97/98 additional contributions
would still be within the overall 15% limit.

Members backdating a contract at the maximum level of 9 or 10% additional contributions, who are unable to pay the
arrears before 6 April 1998 would not however be able to secure tax relief for them in the following year. In these
circumstances, the member may prefer to start or revise their new contract from their next birthday rather than backdate it.

Members wanting to backdate a high percentage contract, able to pay the arrears but waiting for confirmation from the
Agency could elect to pay estimated arrears before 6 April 1998 to secure tax relief. This could be a workable solution
in a few cases - but for the majority it will probably be too late to make the deductions from pay. Where this approach is
used members must understand that neither the employer nor the Agency win be held responsible if the estimated level of
contributions later proves incorrect and additional contributions are required or the Practice returns some contributions.

Making the extra % contributions to buy additional membership

1.3 Members who decide to buy additional membership should apply to do so through their employer pensions contact,
normally the Practice Manager. When the member has decided (or been advised by the Agency) how much membership
they can and want to buy, pink form AB54 should be completed in triplicate and the top copy sent to the Agency. The
Agency will confirm the details of the
contract to the Practice in due course, but where the start birthday is already passed, the additional contributions should be
deducted through payroll, recorded on form GP1 and remitted via direct debit right away, to avoid any accumulation of

1.4 Practice Managers can find more information about applying to buy additional membership in the Employer Guide and
Training Supplement (for those who purchased it) at topic 3.6.

If you would like further personal advice about 1. 1 to 1.4 above, please see Annex 5 following.

GP8 Annex 2


Recording year-end data

2.1 Annex 3.9 of letter GP7 stated that Box 28 (amount of employees contracted out NI earnings) was mandatory. In fact
employers need only complete this box for members who are terminating pensionable employment. If the pensionable
employment is continuing please leave this box blank.

2.2 Similarly, a box 35 entry is normally only required when a member terminates pensionable employment. However, the
Agency is required to secure a 20% sample of the current annual rate of Scheme member’s pay as part of it’s regular
Valuation exercise. Therefore, if the member’s SD number ends in a 1 or 2, please complete Box 35 with the member’s
annual rate of pensionable pay as at 31 March, even if the member is not leaving.

2.3 Box 33 asks for the number of disallowed days. But the box need not be completed if the member is part time, as
disallowed days will be reflected in ’total pensionable hours’, box 26.

2.4 In the meantime, if you experience problems completing form SD55, ring the "SD55 Helpline", set up especially to help
you with year-end return enquiries. The Helpline will operate until 30 June 1998. You can reach it on 01253 774878 or
01253 774530. See more about Helplines at Annex 5.

GP8 Annex 3


3.1 Some of you have expressed concern about aspects of form SD55. In the main these have been about the level of
detail on the form and problems with completion and I am sure that with increasing familiarity the problem will ease.
However, we do listen and I am sure you will be pleased to hear that the Agency will be reviewing the design in time for the
year beginning 1 April 1999. The close link with computer systems makes a long lead time for changes inevitable, but the
review will begin in April 1998 and take full account of any issues you have raised. We will also consult all employers and
payroll suppliers fully about any changes proposed. I will write to you again about this soon.

GP 8 Annex 4


4.1 Annex 4 to letter GP7 included help for Practice Managers calculating Scheme contributions during periods of sick
leave. Further clarification has been requested when a member is not in receipt of any normal Practice pay but is in receipt
of SSP. In these circumstances, the member’s own 5 or 6% contributions should be based on the actual amount of SSP
they are receiving. The employees contribution will remain at 4% of the member’s former full pay, i.e. as if they were not on
sick leave.
GP 8 Annex 5


5.1 The GP Practise Helpline has dealt with approximately 40,000 calls since go-live in August 1997, and I am sure many
of you will, at one time or another have found it a valuable life-line. However the emphasis recently has shifted from calls of
a general nature to more specific ones about individual membership, and we need to review the way we help you with
these enquiries.

5.2 Over 3 years ago now the Agency adopted a ’Client Centred’ approach to administering the Scheme for it’s NHS
members and employers. Both groups have since declared the approach helpful, and we now feel the time is right to adopt
the same plan for our GP Practice membership.

5.3 Each of our 10 Client Centres administers the Scheme for particular parts of the country and provides the full range of
pension services, from joining through to retirement. They are also there to help you fulfil your obligations in administering
the Scheme. Experience has shown that this ’one stop shopping’ enables an effective working relationship to be built, with
benefits for all concerned.

5.4 With effect from 1 April 1998 then, the general GP Helpline will cease to operate (not the special SD55 Helpline - see
para 2.4) and you will normally be able to get all the help you need from your designated Client Centre. One immediate
advantage you will find is the increase in contact lines, with several being available in each Client Centre. We hope this will
make it easier for you to get in touch when you need to. Your Client Centre Manager has enclosed a separate letter
introducing themselves and letting you know your new points of contact at the Agency.

Remember, the general Helpline will be available until 31 March 1998, so if you have any questions about 5.1 to 5.4 above,
give them a ring on 0800 7313262.

GP8 Annex 6


6 . 1 You will no doubt be aware that the NHS (Primary Care) Act 1997 provides for Health Authorities to pilot new forms of
contract for the General Medical Services presently carried out in GP Practices. Services provided under the new pilot
contracts will be known as Personal Medical Services and continue for up to 3 years.

6.2 From 1 April 1998, providers in around 100 pilot contracts will be involved. The majority will be drawn from current GP
Practices and Trusts, employing General Medical Practitioner and Practice Staff ’performers’ to carry out the Primary
Medical Services. Providers not currently holding the status of NHS employing authority will be given it under NHS
Amendment Regulations effective from 1 April 1998. These Amendment Regulations cover a number of other (minor)
Scheme changes and corrections; copies and an explanatory note will be issued to Practices in a separate Newsletter

6.3 Most of the detail regarding the effect of the pilots on individual Scheme membership has now been worked out.
Broadly, those entering pilots (as providers or performers), will be able to remain in or join the NHS Scheme, and where
existing members become involved in a pilot, their Scheme benefits will be at least as good as those previously enjoyed.
For example, self-employed General Medical Practitioners who become providers or performers will, for NHS Scheme
purposes, retain their status throughout the length of the pilot.

6.4 The Agency will be writing to the new providers shortly, to advise them how the Scheme will operate in their pilots. We
will also issue a further Newsletter confirming any impact of the pilots on employers not directly involved. Action for
employers not taking part is likely to be limited to closing down some pension forms SD55 for current Scheme members
who transfer to Personal Medical Service pilots as providers or performers. Please do NOT submit pension joiner or
leaver forms to the Agency for staff involved In pilots until this further advice is issued.

If you want to clarify anything about 6.1 to 6.4 above, please contact Karen Higson on 01253 774660.

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