By: 3 July 2018
Money Matters: Excellence Awards have been granted a stay of execution, but at what cost?

Simon Bruce on the possible impact this will have on your pension  

 The controversial Clinical Excellence Awards (CEA) scheme has received a three-year ‘pardon’ following the BMA’s out of court settlement with the Department of Health and Social Care and NHS Employers.

In 2011, the government reduced the funding of the local CEA scheme by more than 40 per cent with some NHS trusts stopping award rounds entirely.

The new agreement – which applies to the local version of the scheme only – will secure a funding package of more than £300 million to ensure Awards can continue annually across all trusts until 2021.

However, the key change is that doctors receiving new local Awards will find that the increased pay resulting from the industry recognition is no longer pensionable after April.

While many doctors will be relieved that CEAs are set to continue – even if their long-term future remains uncertain – removing the pensionable pay from new awards will impact recipients by many thousands of pounds. As an example, a Level 8 award represents £30,000 of pensionable pay – the impact of losing this will be significant.

Existing holders will keep their awards and these will remain pensionable. What is less clear at this stage is what happens when doctors step up to a new award level – we are awaiting details on whether only the new section of the award is not pensionable.

Added to this is the complexity of many individuals having both final salary and career average benefits within the scheme.

Deciphering your correct pensionable pay will be challenging and there are some important nuances to consider. If you lose your CEA you will be entitled to protect your previous pay level under existing ‘step down’ rules which could safeguard the value of accrued final salary benefits in the 1995 or 2008 sections. However, the pensionable pay for the 2015 scheme could be substantially reduced.



Simon Bruce is CEO of Cavendish Medical – specialist financial planners for medical professionals in the NHS or private practice. For a second opinion on your finances, please contact us on 020 7636 7006. 


The content of this article is for information only and must not be considered as financial advice. Cavendish Medical always recommends that you seek independent financial advice before making any financial decisions.


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