When Primary Care Networks (PCNs) were first established, it was only possible for PCN staff to get the NHS pension if they were employed in a practice or (sometimes) a GP Federation. It quickly became obvious that many PCNs would benefit from setting up their own PCN company, but the lack of a pension was an obvious barrier to this. In late 2019 NHSBSA put in place a ‘temporary determination’ enabling PCN Companies to provide the pension to their employees, and once this was available many PCNs decided to incorporate. We have written previously about why PCNs might decide to incorporate.
The concern with the old PCN pension determination was that it was always time limited and needed to be renewed every year. A Consultation was therefore undertaken on proposals to make permanent changes to the pension rules, which led to legislative changes effective from 1 April 2023 (the ‘New Rules’). Any new PCN Companies wishing to provide the NHS pension to their staff will need to apply to provide it under the New Rules. So far, so straightforward.
Unfortunately the legislation was passed just days before the expiry of the old determination, leaving NHSBSA no time to provide any guidance on how the New Rules would be applied. Worse, there was no guidance for existing PCN Companies who had been relying on the old time limited determination, and these were not mentioned at all in the legislation. During the Consultation the Department of Health & Social Care promised to extend the old time limited determination for a year until 31 March 2024 while this was all worked out, but for some reason this extension never happened and the old determination duly expired on 31 March 2023. As a consequence both new and existing PCN companies were largely left in the dark about how to secure and retain access to the NHS Pension for over 2 months. Only very recently has the uncertainty begun to clear.
Somewhat predictably the information vacuum has been filled by a degree of rumour and scaremongering, so we felt it would be helpful to explain the facts and to shoot down a few myths.
The New NHS Pensions Rules
The legislation and subsequent NHSBSA guidance has opened up two routes for PCN Companies to provide the pension to their employees. One is based on the ‘Independent Provider’ model, and the other is an ‘Open Determination’. We will look at each of these in turn:
‘Independent Provider’ Access is a long established ‘pension gateway’ for businesses which cannot automatically offer the NHS pension to their staff. Any business holding a ‘Qualifying Contract’ can apply for ‘Independent Provider’ status. If this status is obtained all staff who spend more than 50% of their time delivering the approved Qualifying Contract are NHS pension eligible. The New Rules introduce a new Qualifying Contract called the “primary care network standard sub-contract”. This is defined as ‘a sub-contract that complies with the National Health Service Commissioning Board’s template sub-contract, “Sub-contract for the provision of services related to the Network Contract Directed Enhanced Service 2022/23”’. Commenting on this less than perfect document is outside the scope of this blog, but suffice to say that in our experience NHSBSA are interpreting ‘complies with’ to mean ‘the same as’, so are telling all new applicants that they must submit a signed copy of this contract with their application for Independent Provider status. An Independent Contractor application involves a very long and complicated form filling exercise, but once completed an Independent Contractor can apply to add further ‘Qualifying Contracts’ at any time.
A ‘Determination’ is a bespoke ‘gateway’ made at the discretion of the secretary of state. This was the original approach used to provide access for PCN companies in 2019, but the old determination was time limited for 12 months which is why it kept getting renewed. That has now been replaced with a new ‘Open Determination’ which is not time limited and is therefore permanent. The application form for ‘Open Determination’ is much shorter and simpler than for Independent Provider status, but a Determination pension provider has no eligibility to provide the pension to anyone other than the category of staff covered by the particular Determination. Unfortunately the new Open Determination application form has not been published online, so you have to email NHSBSA to obtain it. For reasons that are not clear, NHSBSA seem to require applicants to sign the same NHS Standard PCN sub-contract when applying for an Open Determination as when applying for Independent Provider status, even though this is not a stated requirement in the very limited published guidance. The key thing to remember though is pension access is only available for employees of the PCN Company who spend at least 50% of their time activities related to the PCN DES.
PCN Companies are advised by NHSBSA to take advice before deciding which of the two pension routes to select. We would agree with this and further recommend that you also take advice before signing the NHS Standard PCN DES Subcontract.
Existing PCN Companies: Transitioning from the old time limited Determination
At DR Solicitors we have incorporated almost 100 PCNs, most of which will have applied for pension access under the old time limited determination rules which expired at 31 March 2023. It would be nice to think that all the PCN Companies providing the pension under the old dispensation would be automatically grandfathered to one of the new routes, but this does not seem to be what NHSBSA have in mind. The NHSBSA guidance states instead that “Existing employers, with PCN TLD access which expired on 31 March 2023, should complete an application if continued access is needed. When approved for open PCN determination access the existing EA code will be retained.” Because the EA code is retained, the Open Determination is the logical successor to the old time limited Determination as there should be no change from the perspective of the staff if this route is followed. There appears to be nothing to stop an existing PCN Company from applying for Independent Provider status instead of open access, but this would presumably result in a new EA code and thus require the staff to be transferred.
The sting in the tail is that because existing PCN Companies have to reapply, they have to comply with the rules associated with the new open determination. Most importantly, this means that NHSBSA are likely to insist they sign the Standard NHS PCN DES sub-contract, which was not a condition of the old time limited determination. Any existing PCN companies should already sub-contracts in place, but these will almost certainly not be the NHS standard sub-contract. Assuming NHSBSA continue to insist on receiving a copy of the new standard contract, existing PCN companies will either have to change this part of their legal documentation or persuade NHSBSA that their current documents are equivalent. It is unlikely that this will significantly alter the way that most PCN companies operate, but again we suggest that you take legal advice before signing any new contracts or making any changes to your existing company arrangements.
Firstly, don’t panic. There are new rules in place which will take some time to settle in, but once that has happened and NHSBSA has caught up with its application backlog the arrangements will be permanent and everyone should be in a better place as the arrangements are now permanent.
All PCN Companies who wish to provide the NHS pension to their staff need to consider whether to adopt the Independent Provider or Open Determination route. There are pros and cons to each, and we recommend that you look into them carefully before making a decision.
Regrettably, existing PCN Companies with the old time limited determination need to reapply. Again they should take advice, but the choice may be more obvious for them because of the benefit of keeping the EA code associated with the open determination route.
Everyone who selects the Independent Provider route will have to use the standard PCN DES sub-contract, which they are advised to take advice on before signing. It is not a particularly user friendly document.
Those who select the Open Determination route are usually required to sign the same document, even though it is not clear why. Again, take advice before doing so.
We are aware of various rumours circulating about the implications of the New Rules, so we thought it would be helpful to put some of them to bed:
- The pensions access has nothing to do with the CQC. Regardless of which route you go down you do not necessarily have to register with the CQC. CQC registration is a totally different process and is unrelated to NHS pension access.
- NHS Pensions Access for PCN companies did not cease as at 31 March 2023. Quite the opposite. A ‘primary care network management company’ is now set out for the first time in legislation as a company eligible to provide the NHS Pension to its employees. The problem is that the legislation was passed just days before it went into force, leaving NHSBSA very little time to prepare for implementation. Existing PCN Companies need to re-apply, but so long as they do so there should be no problem with continued access and the pension status should then be permanent
- You do no need to decide whether you are a ‘PCN management organisation’ or a ‘PCN Provider Company’. No such distinction exists. You just need to sign a sub-contract. What this means operationally depends on how you complete the sub-contract schedules, but that should not normally affect pension access.
- You do not need to change your PCN business strategy as a result of the New Rules. You need instead to ensure that you complete the new sub-contract in a way which supports your existing PCN business strategy.
- There is not a third option of a ‘Closed Determination’. Whilst closed determinations are often involved during the process of establishing a PCN Company, they are not a generic way of providing future pension access.
The New Rules are a big step forward. As ever with pensions they are not straightforward, but it is important that all PCN Companies familiarise themselves with the rules and make an application for one of the two routes. At DR Solicitors we would like to see some increased flexibility around the less than perfect standard PCN sub-contract, but in the meantime it can, with care, be made to work for your PCN Company. However this is a complex area, so please do get in touch if you need any support in making the applications.