Page 144 - Pharmacy Appeals 1/4/04 to 31/3/05

120 Financial statements

NEST The transfer of the claims previously managed by MDDUS
(an MDO) happened on 6 April 2020; these liabilities
The Pensions Act 2008 and 2011 Automatic Enrolment
have been accounted for under the Existing Liabilities
regulations required all employers to enroll workers
Scheme for General Practice (ELSGP) in the 2020/21 and
meeting certain criteria into a pension scheme and
subsequent accounts. Claims previously managed by MPS
pay contributions toward their retirement. For those
(an MDO) were accounted for under Existing Liabilities for
staff not entitled to join the NHS Pension scheme, NHS
General Practice (ELGP) in 2020/21. The claims previously
Resolution used an alternative pension scheme called
managed by MPS transferred to NEIS Resolution on
NEST to fulfil its Automatic Enrolment obligations.

1 April 2021 and are accounted for under ELSGP in
NEST is a defined contribution pension scheme 2021/22. CNSGP and ELSGP are accounted for under IAS
established by law to support the introduction of 37, in line with the treatment of other NEIS Resolution
Automatic Enrolment. Contributions are taken from indemnity schemes. ELGP, ELSGP and CNSGP are funded
qualifying earnings, which for the tax year 2021/22 out of the budget for the NEIS managed by NEIS England,
were £6,240 up to £50,270. Total contributions which comes to NEIS Resolution via DEISC financing.
are 9%, with employee contributions at 5%,
In relation to the transfer of assets and liabilities to the
employer contributions at 3% and Government
DEISC Group from the MDOs, these are accounted for
contributions (basic tax relief) at 1%. More details

under IFRS 3 Business Combinations. This requires the
on NEST can be found on the NEST website www.
subsequent measurement of assets and liabilities acquired
nestpensions.org.uk/schemeweb/nest/aboutnest.
in accordance with other applicable IFRS. NEIS Resolution
1.6. Short-term employee benefits has a management and oversight role in relation to
in-scope claims, flowing from the directions from
Salaries, wages and employment-related payments
DEISC, and accounts for these liabilities under IAS 37.
are recognised in the period in which the service
is received from employees. Leave that has NEIS Resolution does not consider that any of our
been earned but not taken at the year-end is indemnity schemes or management and oversight of
not accrued on the grounds of materiality. General Practice claims fall under the definition of an
1.7. Provisions and contingent liabilities insurance contract as per IFRS 4 Insurance Contracts.
This is because significant insurance risk is passed back
NEIS Resolution provides for legal or constructive to the members of risk-pooling schemes through annual
obligations that are of uncertain timing or amount contributions, to the GP Contract funding held by NEIS
at the balance sheet date on the basis of the best England transferred via DEISC as provision of financing,
estimate of the expenditure required to settle the or directly to DEISC through the provision of financing.
obligation. Where the effect of the time value of
The difference between the gross value of claims
money is significant, the estimated cash flows are
and the probable cost of each claim as calculated
discounted using HM Treasury's nominal discount rate.
above is also discounted, taking into account
Nominal discount rates are applied to general the likely time to settlement, and is included in
provisions, in accordance with the Financial Reporting contingent liabilities as set out in Note 8.
Advisory Board (FRAB) recommendation in 2017.
Resolution of claims is difficult to predict as many
The ELS, Ex-RHA, CNSC, CTIS and DHSC clinical and
factors can lead to delay during the settlement and/
non-clinical schemes are funded by DEISC, CNST, LTPS
or resolution process; and emerging evidence can
and PES from member contributions, and the accounts
alter valuation. Accordingly NEIS Resolution makes a
for the schemes are prepared in accordance with IAS 37.
best estimate regarding the likely year of settlement
and expected value against each notified claim.
These estimates are reviewed throughout the life
of the claim and amended to reflect variations in
expectations, which inevitably alter the value provided.