There are two key areas to update readers on i) the NHS pension scheme in the long term (from 2015) ii) increased contribution rates for scheme members from April 2012 in the current scheme.
i) Long term from 2015
The Government reached a high-level position (referred to as the Heads of Agreement) with all relevant trade unions and professional bodies, except Unite, in December 2011. This has been taken to the committees and councils of these unions and professional bodies to be considered in more detail, and some have agreed to consult their members. The Government believes the proposals are fair and a good deal for staff, offering a fair and sustainable pension arrangement that is good for NHS staff and fairer to the taxpayer. It is the final offer available.
Key points are:
- Doctors pensions in the NHS will remain a fair and highly competitive pension provision as compared to private sector schemes
- Defined benefits are guaranteed and not subject to the uncertainty of the markets
- Protection for those within 10 years of normal retirement date – this will benefit around 36 percent of the NHS workforce
- Additional transitional protection will extend to about half of the NHS workforce
- All existing staff will benefit from the cushioning impact of the protection of accrued rights
- As well as doctors’ own contribution to their pension, the value of their pension is increased by a significant employer contribution and the benefits of tax relief. If individuals choose to opt out of the pension they would lose the employer contribution of 14 percent (at 2012/13 rates) – which is more than their individual contribution
More details on the current Heads of Agreement proposal for 2015 can be found here. An employed doctor-specific calculator for the new proposed scheme will also be on the DH website shortly, so doctors can see how they will be affected based on individual earnings.
ii) Increased employee contributions for 2012/13
A calculator is available on the DH website illustrating how your pension contributions will be affected this financial year. Visit the calculator
Subject to the normal Parliamentary procedures, these changes will become effective from 1 April 2012. The NHS Pensions Agency will issue a leaflet to all members of the pension scheme next month.