The removal of a special pension benefit for general practitioners (GPs) if a large number of doctors died in a catastrophic incident was not intended to relate to the coronavirus pandemic, the scheme’s trustees have said.
On Wednesday, GPs who provide public services under a State contract received a letter about changes to their General Medical Services (GMS) pension scheme.
The letter, seen by The Irish Times, stated the policy around the payment of a “death in service” benefit for members who died before retirement had been changed.
The benefit payment would be reduced or not paid out in circumstances where a “catastrophic event” leading to the deaths of large numbers of GPs “would have a materially detrimental effect” on the wider pension scheme.
The letter was sent by Dr Anthony Lundon on behalf of the trustees of the GMS scheme, and stated the "likelihood of such an event arising is very low".
Timing
Speaking to The Irish Times, Dr Lundon said the reference to a catastrophic event was not intended to refer to the coronavirus outbreak, and the timing of the letter during the global crisis was “purely coincidental”.
The hypothetical catastrophe envisaged was a situation where a huge number of GPs died at the same time in a plane crash or at a conference, he said.
The payment of the special bonus to members under age 65 could cause a significant adverse financial impact
The death-in-service benefit is funded from the wider scheme and is paid along with the balance of the member’s pension to their spouse or other beneficiaries.
The policy change had followed a risk review undertaken by the scheme’s trustees last year, after legal and actuarial advice on the matter.
“It was agreed that if a catastrophic event occurred (such as an act of God, war, aeroplane crash etc) which impacted multiple members, the payment of the special bonus to members under age 65 could cause a significant adverse financial impact on the plan and benefits of the remaining members,” the letter said.
The timing of the letter had likely caused “upset” but was not intended to apply to the potential death of a GP from Covid-19, Dr Lundon said.
The value of the benefit payment would be “very small” for a member who was near retirement, he said. The financial pressure on the scheme would only be significant if a large number of “younger GPs” died at the same time, he said.
Pension pot
The benefit was intended to enhance a deceased member’s pension pot paid to their spouse, where the GP may not have been in the scheme for a significant number of years.
In the event the pension fund was strained following a catastrophic event, the changes only related to the benefit payment, and GPs’ estates would still be paid the balance of their pension account.
It is the trustees' absolute intention to continue to pay out the special bonus in line with current practice
In a statement on Wednesday, Dr Lundon said “it would need very large numbers of members to pass away as a result of Covid-19 before any possible impact to members’ benefits would be considered”.
“The trustees believe that the likelihood of a catastrophic event that would give rise to such a reduction is very low. This view has not changed with the emergence of Covid-19,” he said.
“It is the trustees’ absolute intention to continue to pay out the special bonus in line with current practice, and the trustees will only take a decision to change this in the most extreme of circumstances,” he said.
