Request

I am writing to request information under the Freedom of Information Act 2000 regarding the administration of NHS Pension contributions, specifically around the processing of payroll deductions and the allocation of funds. I would appreciate detailed responses to the following:

1- Fund Processing and Allocation:

• What is the average time taken between the deduction of NHS staff pension contributions from payroll and the allocation of these funds into individual pension pots?

• Are there any set performance targets or maximum timeframes for third-party administrators (e.g., Capita, XPS, Aon) to allocate contributions?

• What mechanisms are in place to ensure the prompt transfer of contributions to the pension scheme?

2- Handling of Unallocated Funds:

• Where are pension contributions held during the period between payroll deduction and fund allocation?

• Are these funds placed in interest-bearing accounts during this interim period?

• If so, what is the typical interest rate applied (e.g., SONIA or other benchmarks)?

3- Interest Accrual and Distribution:

• Who benefits from the interest accrued during the time between payroll deduction and fund allocation?

• Is the interest generated during this period reinvested into NHS pension members’ funds or retained by third-party administrators?

• If applicable, please provide the total interest accrued on unallocated contributions over the past three financial years.

4- Third-Party Accountability and Contracts:

• Are there contractual agreements with third-party administrators (such as Capita, XPS, or Aon) specifying timelines for fund allocation?

• What penalties or corrective actions are in place if these timelines are exceeded?

• Can you provide copies of relevant sections of contracts outlining these obligations (if permissible under FOI)?

5- Transparency and Communication:

• How is information regarding fund allocation delays and interest accrual communicated to NHS pension members?

• Are NHS staff made aware of where their contributions are held during processing periods?

I believe this information is vital for ensuring transparency and fairness regarding NHS Pension Scheme operations. Thank you for your time and attention to this matter. I look forward to your response within the statutory 20 working days.

The NHS Business Services Authority (NHSBSA) received your request on 29 December 2024.

We have handled your request under the Freedom of Information Act (FOIA) 2000.

Our response

Please be advised that our interpretation of your request is in relation to the deduction of contributions by the NHS Employer and payment to the NHS Pension Scheme, and the update of this data to the Scheme against the member pension record.

Question 1: Fund Processing and Allocation

• What is the average time taken between the deduction of NHS staff pension contributions from payroll and the allocation of these funds into individual pension pots?

The requested information is not held by the NHSBSA.

The NHS employers have a statutory duty to ensure scheme contributions reach the NHS Pensions’ bank account by the 19th of the month following the month in which the earnings were paid to the member.

I would advise that you redirect your request to your NHS employer directly who may hold the requested information.

The NHS Pension Scheme is a defined benefit occupational pension scheme based on earnings and how long a member has been a member of the Scheme. The Scheme is backed by the Exchequer which guarantees retirement benefits for all members. This means that the contributions paid by members are not placed into individual pension pots and invested.

• Are there any set performance targets or maximum timeframes for third-party administrators (e.g., Capita, XPS, Aon) to allocate contributions?

The requested information is not held by the NHS Business Services Authority.

It is the responsibility of the NHS employer to ensure any third parties they use comply with Scheme Regulations. I would advise that you redirect your request to your NHS employer directly who may hold the requested information.

The NHS employer has a statutory duty to ensure scheme contributions reach the NHS Pensions’ bank account by the 19th of the month following the month in which the earnings were paid to the member. The NHS employer also has a duty to update their members’ records annually to the Scheme.

There is a penalty for late payment of contributions, and non-payment could result in a report to The Pensions Regulator.

Information regarding how an NHS employer submits contributions and late payment penalties can be found on our website:

https://www.nhsbsa.nhs.uk/employer-hub/nhs-pensions-finance

• What mechanisms are in place to ensure the prompt transfer of contributions to the pension scheme?

The requested information is not held by the NHS Business Services Authority.

It is the responsibility of the NHS employer to ensure that contributions are paid within the timescales set. I would advise that you redirect your request to your NHS employer directly who may hold the requested information.

Guidance on recommended submission dates is available on our website:

https://www.nhsbsa.nhs.uk/employer-hub/nhs-pensions-finance

In addition to late payment penalties, technical guidance is available on our website for NHS employers:

https://www.nhsbsa.nhs.uk/employer-hub/technical-guidance

This includes a quick-start guide giving a broad overview of the administrative tasks an NHS employers needs to perform.

Question 2: Handling of Unallocated Funds:

• Where are pension contributions held during the period between payroll deduction and fund allocation?

The requested information is not held by the NHS Business Services Authority.

It is the responsibility of the NHS employer to ensure that they comply with the regulations. You may wish to redirect your request to your NHS employer directly who may hold the requested information.

For information, the contributions remain with the NHS employer until payment is made by the employer in line with the Regulations. Consequently, deductions are taken from an employee’s salary in one month and paid to the Scheme the next month.

• Are these funds placed in interest-bearing accounts during this interim period?

The requested information is not held by the NHS Business Services Authority.

It is the responsibility of the NHS employer for the management of any funds prior to payment to the Scheme. You may wish to redirect your request directly to your NHS employer who may hold the requested information.

• If so, what is the typical interest rate applied (e.g., SONIA or other benchmarks)?

Not applicable, please see above response.

Question 3: Interest Accrual and Distribution:

• Who benefits from the interest accrued during the time between payroll deduction and fund allocation?

• Is the interest generated during this period reinvested into NHS pension members’ funds or retained by third-party administrators?

• If applicable, please provide the total interest accrued on unallocated contributions over the past three financial years.

The requested information is not held by the NHS Business Services Authority.

The NHS Pension Scheme is only responsible for the funds once the NHS employer has paid the funds to the Scheme. You may therefore wish to redirect your request to your employer who may hold the requested information.

Question 4: Third-Party Accountability and Contracts:

• Are there contractual agreements with third-party administrators (such as Capita, XPS, or Aon) specifying timelines for fund allocation?

The requested information is not held by the NHS Business Services Authority.

The contract would be held between the NHS employer and the third-party administrator. It will be the responsibility of the NHS employer to ensure compliance with the Scheme Regulations.

• What penalties or corrective actions are in place if these timelines are exceeded?

There is a penalty for late payment, and non-payment of contributions and this could result in the NHS employer being reported to The Pensions Regulator and escalation to the member.

Information regarding how an NHS employer submits contributions and late payment penalties can be found on our website:

https://www.nhsbsa.nhs.uk/employer-hub/nhs-pensions-finance

• Can you provide copies of relevant sections of contracts outlining these obligations (if permissible under FOI)?

The requested information is not held by the NHS Business Services Authority.

I would advise that you redirect your request with your NHS employer directly who may hold the requested information.

Question 5: Transparency and Communication:

• How is information regarding fund allocation delays and interest accrual communicated to NHS pension members?

There is a penalty for late payment, and non-payment of contributions and this could result in the NHS employer being reported to The Pensions Regulator and escalation to the member.

• Are NHS staff made aware of where their contributions are held during processing periods?

The requested information is not held by the NHS Business Services Authority.

Please be advised that this is not a requirement of the Scheme.

I would advise that you redirect your request with your NHS employer directly who may hold the requested information.

Data Queries

Please contact foirequests@nhsbsa.nhs.uk ensuring you quote the above reference if you have any specific questions regarding this response; or, if you feel you may be misunderstanding or misinterpreting the information; or, if you plan on publishing the data.

Reusing the data and copyright

If you plan on producing a press or broadcast story based upon the data, please contact communicationsteam@nhsbsa.nhs.uk. This is important to ensure that the figures are not misunderstood or misrepresented.

The information supplied to you continues to be protected by the Copyright, Designs and Patents Act 1988 and is subject to NHSBSA copyright. This information is licenced under the terms of the Open Government Licence detailed at:

http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/

Should you wish to re-use the information you must include the following statement: “NHSBSA Copyright 2025” Failure to do so is a breach of the terms of the licence.

Information you receive which is not subject to NHSBSA Copyright continues to be protected by the copyright of the person, or organisation, from which the information originated. Please obtain their permission before reproducing any third party (non NHSBSA Copyright) information.