A FPC protects the NHS Pension Scheme against cost of excessive increases in pensionable pay at or before retirement.
It only applies to pay rises awarded after 1 April 2014.
It does not apply to death benefits.
A FPC impacts members of the 1995 Section who:
- retire with entitlement to officer benefits
- transfer out of the NHS Pension Scheme
If the member receives an increase in their pensionable pay which exceeds the allowable amount in any of the final 3 years before their last day of service, the employing authority (EA) who awarded the excess pay are liable for a FPC charge.
The allowable amount is calculated by increasing the previous years pensionable pay by Consumer Prices Index (CPI) plus 7%.
Find more information on the allowable amount on the FPC factsheet on our website.
We'll identify when there's been a pensionable pay increase in excess of the allowable amount, calculate any charges due from the EA and collect payment of the charge.
If there's a charge, an invoice will be sent to the employer after the member's award has been processed.
If you've received a FPC charge and have a query about the calculation, email fpc@nhsbsa.nhs.uk.
Pay increase dates are not recorded on a member's record. The information will be manually requested from the employer if an excess pay increase is suspected.
Salary sacrifice is not excluded from the charges.
Read more information about FPC on our website.
Multiple EAs
The charge will be made to the authority which increased the pensionable pay if there's 2 or more EAs. These are classed as unconnected employments.
If there's multiple employments under the same EA code and there's no break or a break of less than 365 days between pensionable employments, these will be classed as connected employments. The charge will apply to all the pensionable employments.