The aim of the final pay control regulations in the 1995 Section of the NHS Pension Scheme is to protect the NHS Pension Scheme against the costs of excessive increases in pensionable pay at or before retirement.
Employers are charged if they give a scheme member an increase in pensionable pay which is above an allowable amount in the final 3 years of their employment.
You can find out more about final pay controls through our final pay controls factsheet (PDF: 162KB)
Understanding when final pay controls apply
Final pay controls are applicable to all official (including non-GP Provider) members of the 1995 Section of the Scheme, including 1995 / 2015 transition members who retire or transfer out of the NHS Pension Scheme to another scheme.
They do not apply to members of the 2008 Section or 2015 Scheme of the NHS Pension Scheme.
The allowable amount
The allowable amount is the amount that a member’s pensionable pay can increase by in their final 3 years before the employer is liable for a final pay control charge.
The allowable amount is the lesser of the:
- member’s pensionable pay in the relevant year
- member’s pensionable pay in the previous year, plus the consumer prices index (CPI), measure of inflation plus 7%
- percentage increase in the member’s pensionable pay for the current year compared with the previous year
The allowable amount was increased from the CPI measure of inflation plus 4.5%, to CPI plus 7% from 1 July 2021.
How final pay control charges are made
When submitting a member’s retirement application form (an AW8), you must also complete and return the final pay control supplementary form - FPC1 (PDF: 328KB).
The completed form must be returned in PDF format. If you do not do this, your form will be returned.
Where an employee has 2 or more employers, the one that increased the pensionable pay will be liable.
If the invoice is not paid, then interest and an administrative levy is added to the charge.
Reassessment of retrospective final pay control charges
Any final pay control changes calculated on or after 1 July 2021 will take into account the revised CPI percentage and the new exemptions. The changes were applied retrospectively from 1 April 2018 and employers were able to request for final pay control charge invoices received or paid between 1 April 2018 and 1 July 2021 to be reassessed.
The legislative window for the reassessment of final pay control charges closed on 31 December 2021.New applications for reassessments won’t be accepted after this date.
Applications received before the deadline are being assessed in the order they were received.
If the reassessment finds changes need to be applied retrospectively, you'll be reimbursed the relevant amount for the final pay control charges already paid.
If any amount of final pay control charge remains outstanding, a notice will be issued to the employer, or in the case of a non-GP provider, the practice. This charge will need to be paid to us within one month.
If you’ve submitted a final pay control charge which was issued between 1 April 2018 and 1 July 2021 for reassessment that you’ve not yet paid, this will be reassessed. If the reassessment finds retrospective changes need to be applied, interest and administrative charges may still be payable for the late payment. If this is the case, you will receive confirmation of the relevant amount.
If your reassessment is approved, you will receive a credit note for the relevant amount.
We will contact you once your final pay control charge has been reassessed. To help avoid delays to our processes, we ask that you not to contact the Final Pay Control Team to enquire about your reassessment whilst we complete the reassessments.