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Unions reach agreement on pensions


Unions representing NHS employees have agreed to suspend plans for further industrial action pending consideration of the government’s “final” offer on pensions.

At a meeting this afternoon unions, including Unison and the British Medical Association, reached agreement with Department of Health officials on the principles of a deal which include concessions for staff up to 13.5 years away from retirement.

The deal, which is subject to approval by union executive councils and members, involves an improved accrual rate and the retention of the Fair Deal, the policy that provides pensions protection for staff transferring out of the NHS.

Royal College of Nursing chief executive Peter Carter said: “The government and the NHS staff council trade unions have now discussed a final set of proposals in respect of the NHS pension scheme, which recognises that the proposals are the best that can be achieved through negotiation. The government has confirmed that this is their ‘final position’.

“Each of the unions representing NHS staff will now take this proposal to their governing bodies for approval or otherwise. The RCN’s governing council will meet on 10 January to discuss this proposal and will want to engage as many members as possible in the decision over how best to respond to this offer.”

Jon Restell, chief executive of Managers in Partnership which represents health service managers, told Nursing Times the deal was the government’s “final position and therefore would be considered as such by the unions”.

He added: “We have taken negotiations through as far as we think we can go within the time frame the government has allowed. We have been negotiating in good faith and the department has done the same within the time frame.

“We have been in the business of damage limitation… In the circumstances it’s the best deal we could secure through negotiation. There are still important details to be resolved and agreed.

“Our members will have to form a view once the full package is available. We have wrung as many concessions out of the DH as we believe are to be won.”

Under the deal, NHS pensions will be linked to career average earnings rather than final salary and normal pensionable age will be the same as the state pension age.

All members of the NHS pension scheme within 10 years of retirement as of April 2012 will be protected from the changes, while those within 13.5 years of pensionable age will have limited protection, tapered so that for every month of age beyond 10 years of normal pension age they lose 2 months of protection.

At the end of the protected period, they will be transferred into the new pension arrangements.

The Treasury wants to see the overall amount paid into the scheme increase by 3.2 per cent from 2012-13. There will be no increase in contributions next year for staff earning a whole time equivalent salary of less than £26,557. Those earning above the threshold will see increases next year of between 0 and 2.4 per cent. Increases for subsequent years are still up for discussion but it is likely lower paid staff will pay more.

The unions won a provisional improvement on the accrual rate from one sixtieth of pensionable earnings to one fifty-fourth each year. However, the revaluation will be at consumer price index plus 1.5 per cent instead of the original offer of CPI plus 2.25 per cent.

The agreement acknowledges that changes to pension age may have more impact on staff working in frontline and physically demanding roles, particularly the emergency services, and commits to review the impact on these groups of staff.

Chair of the British Medical Association Council Hamish Meldrum said it was disappointing the government had refused to concede the pension scheme was already fair and providing a positive cashflow.

He said: “Despite some improvements to the original offer, doctors stand to be hit very hard by these changes.  Junior doctors in their twenties would have to work until the age of 68 and pay over £200,000 more in additional pension contributions.

“We will now seek our members’ views on the offer, and – if they consider it unacceptable – on what action they would be prepared to take.”

Responding to the progress in talks on the NHS pension scheme, Dean Royles, the director of the NHS Employers organisation, said: “This significant step forward will help lift the cloud of uncertainty hanging over the NHS around pensions and industrial action. This period of uncertainty has led to anxiety for NHS staff.  Disruption to NHS services through industrial action and has meant distress for patients.

“Suspension of industrial action gives welcome breathing space to help staff focus entirely on delivering patient care while constructive talks continue.  It will allow local employers and trade unions to explain the changes and provide reassurance on pension entitlements.


Readers' comments (13)

  • The concern must be how many will now drop out either because of much higher contributions or those on higher salaries who pay a higher percentage but will not get such a good deal. No body is protected against the losses attributable to the use of CPI instead of RPI to uprate current and future pensions. Not good

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  • I am thinking of just opting out of my pensions. The problem we now have is the 'slippery slope' issue. Things will keep changing slowly over time for the worse. Tiny changes instigated by the Tory-Clegg alliance will occur. It will be so small that people won't notice them. Over time these small changes will collect to eventually form an unstoppable river of doom. Doom rooted from the over-paid, incompetent, greedy, thoughtless, and arrogant bankers. By the time it gets to a stage where I have no choice but to terminate my pension it would have already been too late. I would have nothing to cash out with.

    Perhaps all of us should cash out now and see where the government's multiple schemes (using our pension funds I might add!) work out.

    Bring on the next general election.

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  • I have every intention of withdrawing from the pension scheme. I will not be pay into a scheme which is going to be raided by the Tories, to pay for the ineptitude of others, I pay enough in tax; I won't pay twice.

    I look forward to the money this will free up each month and have every intention of working only until 60 (as planned), whereupon I intend to claim benefits until I can retire on the state pension.

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  • Just a word of warning to those thinking of jumping ship when our pensions change. Remember contributions are tax free as is the lump sum. And you would probably struggle to get the same return on your money using other financial vehicles!

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  • Tough one this - there will still be a value in what ever opension contributions have been made, and to make a change more than 20-25 years into a pension will lead into a very poor retirement.
    Why should I then pay more tax for those people claiming benefits who opted out & failed to prepare themselves for the future, the who pension & benefits sytem would collapse if this occured. I agree with anonymous above who points out that there would be very little return if a person opts out - a private pension or share dealing will not give the same long term payout.

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  • Im opting out
    no way am i paying any more to prop up the greedy bankers

    then as mentioned i will retire at 60 and claim benefits until i get my state pension
    after all benefits this time round got a 5.2% rise, carnt be bad for sitting on your arse all day!!!

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  • why aren't employer/employee contributions compulsory during periods of employment and state pension contributions compulsory throughout working life as in some other European countries. Even when on benefits contributions still have to be made to the state pension scheme but the employers pension scheme is frozen and resumed with new employment or used to pay benefits. further contributions can then be made into a tax-advantageous voluntary scheme which is also frozen for those on benefits and accumulates interest until retirement age. if a person remains in employment it can be used towards purchase of a property.

    surely this is a better solution to ensure that everybody gets a pension and is less of a drain on the state?

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  • One day of action.... will the unions now sell out like the Rcn?

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  • I can retire in 18 months and will do so if pushed too far beyond reasonable limits. I would do this only in order to pick up my pension, I would either come back to the same job less hours - or do Agency/Bank likely doing the same hours in the same place = so the public get to pay for me doing the same job twice.

    I expect others are thinking the same thing in similar circumstances - this could bring the whole pension system crashing in on itself and no one will get anything out of it!

    Thus, compromise is essential and both sides need to take a long hard look at the short term and long term affects of any decision they may make.

    If the lower paid (mainy women) employees and those nearest their pensionable age get the most protection - I might be willing to compromise.

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  • Thats my decision made then out at 55 next year. Not worth staying til 60 I will leave take my little NON gold plated pension (only 20 years service) and get a little stress free part time job that lets me sleep at night. Definately not worth all the hassle of being a staff nurse.

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