Following exhaustive negotiations with the government, the RCM and other NHS trade unions have reached a ‘heads of agreement’. This means that unions will have to take the current offer to their executives as the best that can be achieved in negotiations.
The offerThe main aspects of this offer are:
✲ A career-average pension
✲ An accrual rate of 1/54 (the rate at which you earn your pension – for every full-time year you work, you will earn 1/54th of your career-average salary. Currently, the 1995 pension scheme is 1/80 and the 2008 pension scheme is 1/60)
✲ Retirement age to be equal to an individual’s state pension age (currently between 65 and 68, depending on your date of birth)
✲ Average pension contributions of 9.8%
✲ Protection for all those within ten years of their retirement
age on 1 April 2012 (those employees will keep their retirement age and their final-salary pension, but will still pay the higher contributions)
✲ All accrued rights (everything you have earned up until April 2015) will be protected.
The change in the pension scheme is expected to go ahead from 2015, but the increase in contributions will start this year, with further increases in 2013 and 2014.
The negotiations
The NHS pension scheme negotiations began following the publication in March 2011 of the Hutton review into public sector pensions. It recommended that these should be based on career-average salary rather than final salary; that retirement age should be linked to state pension age; and that members’ contributions should increase. In short, public sector workers should pay more, work longer and get less.
The NHS trade unions, including the RCM, participated in negotiations with NHS Employers and the Department of Health about the specifics of the scheme during 2011. The government made it clear from the outset that it wanted to reach an agreement by the end of 2011, which made the negotiations intense and difficult.
Negotiations were constrained by the limits of the government’s ‘cost ceiling’. This was not open for negotiation, so all calculations had to be conducted within these. So if we tried to make one element better than the government proposal, another element would have to be worsened.
The government consistently told the NHS trade unions that if an agreement wasn’t in place by the end of the year, they would impose a worse offer.
Your viewsThe RCM commissioned Incomes Data Services to conduct a survey of your attitudes to the changes. The survey was conducted in September/October 2011 and had 6100 responses. The full results can be read on the RCM website.
The main findings were:
✲ 91% disagreed with working until the age of 68
✲ 72% disagreed with contributions increasing by more than 3%
✲ 59% disagreed with the change to a career-average pension.
You clearly indicated that working longer presented the biggest problem; therefore, the RCM’s priority was to lower the retirement age.
Day of ActionOn 30 November 2011, more than two million public sector workers were balloted for industrial action over the proposed changes. This resulted in the largest day of action the country has seen in a generation. While the RCM, along with the RCN and the BMA, did not ballot for action, many of you joined in the demonstrations.
Just before the Day of Action, the government revised its proposal and announced an improved accrual rate and protection for those within ten years of retirement age. This undoubtedly would not have been achieved without the Day of Action.
The agreementOn 19 December 2011, NHS trade unions (apart from Unite) signed up to the ‘heads of agreement’.Agreeing to this, does not commit the RCM, or the other NHS trade unions, to agreeing to the deal, but it does commit us to taking this proposal to our executives for a decision on how to proceed.
The RCM is bitterly disappointed that there was no movement from the government on the link to state pension age. We are concerned that midwives and maternity support workers (MSWs) will not be able to meet the physical and mental demands of their profession when they are nearly 70 years old.
The government has agreed to set up a tripartite review between the Department of Health, NHS Employers and the NHS trade unions on addressing the impact of working longer in the NHS, with particular reference to staff in front-line and physically demanding roles, including emergency services.
While there was no movement on the level of contributions or the retirement age, the trade unions have managed to negotiate a significantly improved accrual rate, which, at 1/54th, will mitigate the move to a career-average scheme for the vast majority of midwives and MSWs.
The trade unions also achieved protection for the workers closest to their retirement age – anyone who is within ten years of retirement on 1 April 2012 will keep both their retirement age and their final-salary pension scheme (although they will have to pay the higher contributions). The protection will also be tapered for three to four years, so that workers who are just over ten years from retirement age will still get some protection.
Next stepsAll the NHS trade unions now have to make the decision to either accept or reject the offer. If we reject the offer, we would have to be prepared to risk losing the protection for workers closest to their retirement age and the improvements in the accrual rate, as the government may choose to impose a worse offer. We would also have to take industrial action to attempt to achieve a better offer.
The RCM will be meeting shortly to consider our position; whatever that position is, we will continue to campaign for a fair pension.
Tell us what you think – comment on the blog
Final offer on NHS pensions on RCM Communities.
