NHS Pensions

Final pay controls

Final pay control regulations aim to protect the NHS Pension Scheme against certain costs. These costs are caused when, in the 3 years before a member retires or transfers their benefits out, either:

their employer increases a member's pensionable pay above the allowable amount
the member chooses to transfer their NHS Pension benefits to another scheme

The allowable amount is currently the Consumer Price Index (CPI) plus 7%.

If your employer is liable for a charge, we will not delay awarding your pension benefits because of this.

Who final pay controls apply to

Employers may be liable for a final pay control charge where, in the 3 years before retirement, an officer member has:

had a significant pay increase, above the allowable amount
chosen to transfer their NHS Pension benefits to another scheme

The member must also be either a 1995 Scheme member or a 1995/2015 transition member.

This includes non-GP providers and employees of:

a trust
a foundation trust
general medical services (GMS), personal medical services (PMS), or alternative provider medical services (APMS) surgeries
an independent provider
a direction body

Who final pay controls do not apply to

Final pay controls do not apply to members in the 2008 or 2015 Schemes who do not have any previous 1995 Scheme membership.

They also do not apply to:

death benefits
practitioners, including salaried and GPs and salaried dental associates
members with decoupled 1995/2015 membership, meaning they opted out of the Scheme for 5 years or more whilst in employment

Exceptions to final pay controls

There are some exceptions where a member can receive an increase in pensionable pay above the allowable amount, and we may not charge the employer.

These exceptions are a result of:

pay increases received due to Agenda for Change
nationally agreed contracts or framework agreements, which are authorised under certain NHS terms and conditions
a National Clinical Excellence Award
promotions following fair and open competition, with supporting evidence
a salary sacrifice arrangement ending
an increase in practice profits impacting non-GP providers, in certain circumstances

Employers must submit a Final Pay Control Form - FPC1 (PDF: 328KB) with the member's retirement application form (AW8) for this criteria to be considered.

Who is liable for the final pay control charge

The Employing Authority that awarded the increase in pensionable pay is liable to pay the final pay control charge.

If the member was a non-GP provider, the relevant surgery is liable for the charge.

Under the statutory 1995 NHS Pension Scheme regulations, if the employer does not pay the charge within the 1 month deadline, they’re subject to additional statutory charges.

Guidance

You can find out more about final pay controls through our final pay controls factsheet (PDF: 162KB).