Unions have criticised a hospital trust for introducing a new recruitment scheme that offers nursing staff better pay in return for sacrificing pension contributions.
The move is part of major recruitment campaign launched by East and North Hertfordshire NHS Trust to help it compete with staffing agencies in the workforce market.
“Saving on pension costs to subsidise higher rates of pay isn’t the way forward”
The trust’s deal allows band 5 and 6 nurses and midwives to choose to opt out or not join the NHS pension scheme. In return, it is offering them higher salaries in a bid to fill 200 nursing vacancies.
Under the terms of its offer, nursing staff who are not members of the NHS Pension scheme will keep their employee contributions and receive a higher rate of pay than Agenda for Change rates. The higher rate also includes the value of the employer’s pension contribution, which is around 12%.
The trust noted that was now also offering more flexible working patterns to try and compete with agencies.
A similar pay and pension scheme was considered but ultimately dropped earlier this year by community and mental health provider Oxleas NHS Foundation Trust, after pressure from unions concerned that it would spark a gradual erosion of the NHS Pension scheme.
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In a statement explaining the move, the trust said its campaign was intended to encourage nurses, midwives and operating department practitioners to take up substantive roles, rather than working solely for agencies that charged the NHS a premium for their services.
“Our campaign highlights our new approach to flexible working”
Trust director of workforce Thomas Simons said: “From research that we have undertaken, some nurses choose to work for agencies only as they believe that this gives them greater flexibility over how and when they work, as well as higher rates of pay.
“Our campaign highlights our new approach to flexible working, which means that we are willing to engage with all working pattern requests with the aim of making them work for both our hospitals and our staff,” he said.
“With regards to financial flexibility, one of the options that we are now making available to band 5 and 6 nurses, midwives and ODPs relates to their pension arrangements,” he said.
“Given that people working for agencies do not have access to the NHS Pension scheme, we are piloting allowing band 5 and 6 nursing and midwifery staff options scheme that allow them to receive the contributions that the trust would have made on their behalf had they joined either the NHS Pension or choose the NEST scheme,” said Mr Simons.
He added: “The impact for those taking up the option to opt out of the NHS Pension is the equivalent of around a 12.5% rise in their salary – which goes a long way to eroding the perceived difference with agency pay rates.
“For staff choosing to join a NEST scheme, the uplift will be some 7.5%,” he said. “People are, of course, free to choose the NHS Pension scheme should they wish to, with staff opting out auto-enrolled back in every 12 months unless they chose actively otherwise.
Unions clash with trust over pension opt-out
“In addition to these flexible, enhanced pay options, the trust will be offering really flexible working patterns, different types of contracts, great training opportunities and excellent career progression.
Mr Simons highlighted that the scheme was a “pilot and not a permanent change” and that the initiative would be reviewed formally in a year’s time.
“Also their opting out of the NHS Pension scheme will last for one year, with people re-enrolled automatically in to the scheme unless they seek to opt out – and again show that they have taken the appropriate advice,” he said.
In addition, he highlighted that staff who had opted out were free to join the NHS Pension scheme at any point in their 12-month opted-out period.
Mr Simons argued that the trust had been “very sensitive” about how the plan might be viewed and, as a result, had undertaken an extensive briefing programme in recent weeks.
He said: “This has involved sharing our plans with our local, regional and national trades union partners representing nursing staff, MPs, NHS organisations locally and NHS Improvement.”
However, Unison and the Royal College of Nursing have attacked the deal, with the former claiming it is “morally wrong” and “legally suspect”.
“This ill thought out move asks people to neglect their future”
They argued that it is against Section 54 of the Pensions Act for employers to “induce” staff out of a pension scheme or encourage them not to join one.
In addition, they claimed that it was a cost-cutting measure that discouraged staff from planning for their retirement.
Members of both unions, along with the Royal College of Midwives, will today be protesting against the move outside the trust’s Lister Hospital in Stevenage.
Unison said it had already reported the trust to the NHS Pensions Board and the Pensions Regulator, and was now awaiting their response.
Tracey Lambert, Unison’s head of health in the East of England, said: “This deal, which applies to newly qualified and existing staff, is clearly a cost-saving measure.
“If offering staff more money not to join a pension scheme isn’t an inducement, then it’s difficult to see what is,” she said.
“Saving on pension costs to subsidise higher rates of pay isn’t the way forward,” she said. “Every worker deserves financial security in their retirement and staff shouldn’t be encouraged to put short-term gain ahead of long-term security.”
The RCN said it was also “deeply concerned” about the proposal and its potential impact on the long-term financial security of hardworking nursing staff.
Janet Davies, RCN chief executive and general secretary, said: “This ill thought out move asks people to neglect their future and will stop them from making retirement plans.
“It could put nurses into poverty when they retire and lead to an even greater reliance on state support,” she said.
“There are also potentially serious consequences for the long-term viability of the NHS Pension Scheme,” said Ms Davies.
She added: “This scheme risks a great deal for very little gain. The solution is simple: pay nurses enough.
“Nurses won’t then be forced to work additional hours for agencies, hospitals will not be left short staffed and patients will get better quality care,” she said. “This must be reconsidered.”