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Trust offers better pay in return for opting out of pension


Oxleas NHS Foundation Trust has defended a controversial pay deal aimed at attracting agency nurses, which means band 5 nurses can earn more if they opt out of the NHS Pension Scheme.

The trust told Nursing Times it devised the offer to try and recruit nurses to take up permanent posts who had previously left the NHS and gone into agency work.

“The regulator says what we are doing is legitimate and legal”

Simon Hart

The trust’s director of HR and organisational development, Simon Hart, said: “We have very specifically gone after people who have gone off to work for agencies – the logic being they’ve already walked away from the pension scheme for more money.”

Under the deal, all new and existing band 5 nurses can chose to receive an enhanced rate of pay that will mean they are not in the NHS Pension Scheme – earning them roughly £300 to £400 extra per month, depending on increments.

When combined with additional pay for unsocial hours, the enhanced rate will equal the pay offered by many agencies, according to the trust.

A recruitment drive aimed at band 5 mental health and general nurses, which promoted the new offer, was launched in January with the slogan “agencies don’t always pay more”.

Mr Hart said the South East London trust – which provides a range of services including mental health, prison health, community care and intermediate care – had struggled to recruit band 5s and currently had a nursing vacancy rate of 16-17%.

In contrast, local agencies were successfully recruiting nurses, which trust managers put down to the better pay on offer.

Mr Hart said: “Staff say this is a really good place to work. We have good staff development – all of those things – and we’re not even getting a sniff. And then you look at the pay rates and you work out why.

“Our conversation was ‘how are we going to compete with agencies without breaking Agenda for Change and busting the bank’, so we have come up with this approach.”

Oxleas NHS Foundation Trust

Nurses offered better pay if opt out of pension

Simon Hart

Under the scheme, those who opt out of the NHS pension must take a conscious decision to keep opting out each year and staff can also change their mind at any time and opt back in.

Meanwhile, a third option would see the trust enrol staff in the government’s National Employment Savings Trust (NEST) pension scheme. They would also receive more pay, taking home the difference between the employer contribution the trust makes to NEST and the amount it would have paid into the NHS scheme.

They would not be automatically re-enrolled in the NHS pension each year but would be notified of the opportunity to join the scheme.

Since the deal was launched, 19 nurses already employed by the trust have taken up the offer and opted out of the NHS Pension. The deal has also been extended to a further 50 who had already chosen to opt out of the NHS Pension Scheme before the offer existed.

As part of recent recruitment efforts, the trust has made conditional offers to about 80 new nurses. Mr Hart said he did not know how many of those would choose the pension opt-out if they came to work for the trust but anticipated it would be “very few”.

He said it was too early to say whether the deal had attracted more applicants. However, he added: “We’ve had a much higher percentage of nurses who are not in the NHS applying than has hitherto been the case – probably 60% of the applicants are non-NHS nurses.”

“That would imply we are potentially hitting a market that has otherwise ignored us,” he told Nursing Times.

“If a number of trusts were to follow suit, it would undermine the viability of the NHS pension scheme”

Nicola Lee

It is against to law to “induce” staff to leave a pension scheme or encourage them not to join and Oxleas’ offer was referred to the Pensions Regulator. It told the trust to tweak some of its wording but went on to close the case.

However, the NHS Pensions Board, which has members from employers and unions, has asked the Pensions Regulator to investigate it again.

“The regulator says what we are doing is legitimate and legal,” said Mr Hart. “It costs the trust nothing to offer this and we gain nothing. Where we do gain is if it’s attracting people through the door to come back to the NHS.”

He said the trust might make some savings when it came to agency spend but maintained the main driver for the scheme was “quality of care”.

“Consistent staffing is better for staff, better for patients and carers, better for morale and better on so many levels,” he said. “If we have got substantive staff we know we get better care and better outcomes and that is the critical driver.”

Meanwhile, he noted that nurses who opted out of the NHS Pension Scheme may have various reasons for doing do.

For some, that may be “to make ends meet”, others may be sceptical about whether the scheme would pay out down the line, or be overseas staff who wanted to maximise earnings because they were planning to return home at some point.

Mr Hart said the offer had been made with the agreement of local union representatives but those at national level have raised concerns.


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Christina McAnea

Unison’s head of health Christina McAnea said: “Every worker deserves financial security in their retirement and staff shouldn’t be encouraged to put short-term gain ahead of their long-term security.”

Nicola Lee, employment relations adviser at the Royal College of Nursing, added: “There are concerns about the impact on members of staff if they are not properly advised about the long-term consequences of opting out of a pension plan.

“If a number of trusts were to follow suit, it would undermine the viability of the NHS pension scheme as well as Agenda for Change, the nationally agreed pay framework,” she said.


Readers' comments (17)

  • Surely employers are required by law to provide a pension, as the radio adverts keep saying every employer irrespective of the number of employees has to provide a work place pension..

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  • In essence this is not about more pay for nurses as there will be a down side as well. The Trust will save money because they do not have to pay into the scheme, nurses will get more money because they are not paying either. If nurses are young, they will be tempted as no-one thinks about their old age, expecting that they will be ok. Pensions are going to be squeezed and you will find it hard to cope on a state pension which in the future will be provided at a higher and higher age. The NHS pension is a very good deal even on the reduced scheme now in place. However, private pensions are not paying very much at all. If someone goes into nursing later in life or only temporarily, with an alternative pension, perhaps it is worth opting out but it needs careful consideration. The worry would be that nurses will not seek alternative pension plans and will have a very difficult retirement.

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  • I think this is a very good initiative by Oxleas. Student nurses sacrifice a lot and as a band 5 better pay in conjuction with the package to support us, this is a ideal setting to start off my career and develop. Hope to work for Oxleas.

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  • As long as appropriate financial advice is provided, re saving into a private scheme to prepare for their future retirement. Direct payment autonomy!?

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  • The bother is where it will lead. The non-salary benefits of public sector employment distinguish it from the public sector. Once you erode the different elements that were distinctive, it is much easier to privatise in piecemeal fashion until the only thing that is public are the legal oversight via Parliament. The loss of housing stock, use of PFI, etc are part of the process; then removing full bursaries and moving training closer to the fee-rules of other degrees is the step before the final one - pensions! If staff voluntarily choose not to have the usual pension, then it is not so controversial as freezing the perks or overt privatisation. It is always the truth hidden under the veneer that is where the clues to how the future will look, NHS-wise. There are a number of possible outcomes, but they appear not to resemble the post-war settlement. Many of us have lived long enough to know that it won't be us who will suffer so much as those who are younger than us.

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  • Illegal surely and again re iterate it will undermine the NHS pension scheme. Just pay them a decent wage without the catches

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  • @ANONYMOUS 11 MARCH, 2016 5:20 PM

    '' The non-salary benefits of public sector employment distinguish it from the public sector.''

    I meant - 'distinguish it from the private sector'. So sorry!!

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  • Do you see the police, fire service or any other health professionals giving up their pension rights in lieu of short term financial gains? I so wish we as a powerful collective group would fight in the same way as junior doctors and get the salary AND pension we deserve. The NHS would be screwed without us

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  • Nan Obeng, sorry but you are being very naive. The NHS pension from the latest scheme (2015) will be based on your career average and over your working lifetime this will probably change several times; I have been in the NHS pension scheme for 10 years and it has already changed three times, fortunately due to my age I can opt out of the 2015 scheme as this is disadvantageous for me. You will need to save for your retirement and the sooner you start the better. This is nothing to do with providing staff with additional money but is more to do with saving the trust money as they are not paying into the NHS pension scheme. If the trust believes that more money will help retention of staff they are very much mistaken, evidence suggests that a salary increase may be initially a motivator but after a relative short period of time it actually becomes a demotivator.

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  • WHAT? '£300 to £400 extra per month' - this is the kind of reporting that makes the general public think we earn way more than we do. What level of pay are these nurses on?
    As a band 6 nurse, one increment above a top band 5 nurse, my superannuation sacrifice is roughly £220 a month at 9.5%.
    I agree with many of these comments...when we are young we are blinded to our own old age and as nurses dealing with disease and dying on a workaday basis we can become cynical about living a long life.
    I intend to stay in the Scheme. If I die in service to the NHS then my family will receive death benefits (twice my annual salary) as part of my superannuation far, I am working until I am 66 another 10 years...and at these stress levels that part of the superannuation scheme is a definite driver to remain within it!
    My part of the NHS is also forced to use agency staff and it is quickly stripping the cash out the pot. The Government could introduce legislation to prevent such exorbitant costs by setting ceiling levels of pay for these agencies (where is the Government's sense of 'duty of care' to the nation?).
    Recently, an agency staff nurse travelled around 100 miles each way by car for a 7.5 hour shift - leaving home at 3.30am to get to work for 7am and been paid as soon as they left their home as I understand it. The petrol alone must have cost around £30. Some band 2 staff from agency will get more than the junior staff nurses working on our ward depending on the timing of their shift.
    NHS workers (and agency staff) via our National Insurance and taxes continue to contribute to the NHS. Also add on unpaid overtime many contribute (for me around £4,500 annually at roughly 7 hours a week - let alone the private study time and sometime cost to enhance and maintain my knowledge and skills) Then when we (hopefully) lift our NHS pensions we will probably continue paying tax.
    Oh yes, the NHS is supported by much goodwill. Take our pensions away, privatise the NHS etc and I suspect many, myself included, will not be so happy to give up our own precious time and effort to line the pockets of the 'fat cats'.

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