A number of dental clients have been asking questions about completion of the Annual Reconciliation Report (ARR) for themselves and their Associates.
The ARR, which is now fully on-line and requires validation by each dentist, ensures that superannuation payments for the NHS pension are adjusted from the estimates collected each month and correctly allocated to the dentists who actually undertook the NHS work. Deadline for submission of the completed ARR is 30 June 2014.
Key figure to calculate is Net Pensionable Earnings for each dentist which is after deduction of associate fee payments to the practice, lab bills, materials etc – this can be no higher than the magical figure of 43.9% of gross earnings. Total of all Net Pensionable Earnings declarations cannot exceed 43.9% of your practice contract value. Many practices simply declare a figure equal to 43.9% of the associate’s gross UDA payments for the year.
Once the principal/provider has split out the net pensionable earnings, each performer including the principal will need to log-on to their individual NHS portal to check and confirm their own declared net pensionable earnings before the ARR can be submitted for processing.
Once the ARR has been submitted, adjustments to the contributions required from each dentist will be made centrally. Those who have under-delivered against their estimated workload will receive a refund of over-paid contributions, those who have over-delivered will need to pay extra to cover their increased entitlement. All adjustments between dentists will show on the July NHS schedule which is paid to providers 1 August 2014. Ordinarily these adjustments will be passed on by the practice as either credits or debits on the Associate’s next pay statement.
Any eligible superannuation payments which cannot be, or is not, claimed by individual dentists for any reason cannot be re-allocated to any other dentist including the principal.
Practices will also need to estimate the volume of UDAs/NHS work to be undertaken by each dentist for the next 12 months from which estimated monthly contributions to superannuation will be calculated and deducted each month. The more accurate this estimate is, the less adjustment will be necessary next April when the ARR exercise is repeated.
Important for all that the ARR is completed accurately so here are two useful guides which include sections on completion of the ARR, a number of FAQs and contact points.