NHS pension scheme contribution changes coming on 1 October
Changes to NHS pension contributions for NHS pension scheme members in England and Wales are coming in on 1 October. The Royal College of Midwives (RCM) is encouraging its midwife and maternity support worker (MSW) members to find out how this will affect them. The Government wanted to implement these changes earlier but delayed after pressure from the RCM and other health unions.
The RCM had also challenged the changes in its response to a government consultation, citing the rising cost of living and pay failing to keep up with these costs as a reason to delay or scrap the changes. The Government are though pressing ahead.
The changes could see some midwives and MSWs paying more in pension contributions, some paying less, and some seeing their contribution levels unchanged. The number of contribution ‘tiers’ in the scheme will be reduced from seven to six. This ‘will reduce the steepness of the tiering, creating a flatter structure, which is considered to be appropriate in a CARE scheme, where all members get the same proportional benefits,’ says NHS Employers.
The current scheme is based on people working full time. This-meant part time workers paid disproportionately more in contributions. The new structure should see part time workers paying less. Those on high incomes also pay more into the scheme than those on lower incomes. The changes mean that some of these higher earners may see their pension contributions fall. It is important to note that none of the contribution changes will affect how much pension you get when you retire says the RCM.
“This is major change and one that our members, and their colleagues, should be aware of because they could see a drop in their take home pay. This is particularly relevant now as the cost-of-living heads upwards, with your pay not keeping pace,” said Lynne Galvin, the RCM’s Regional Head for the North and its lead on pensions. “The structure is complicated though, and each person’s situation will be different. That is why it’s important that you speak to your employer to find out how these changes will affect you. They should be informing you about the changes and letting you know how it will affect your pension contributions and take-home pay.”
The new contribution structure will be implemented in two phases. The first phase comes on I October this year. The second will follow in 2023 with the exact date yet to be confirmed. Phase 2 could see some further movement within the tiers. However, the Government have said this is less likely to happen. Information on how you might be affected can be found on the NHS Employers website.
The RCM are aware that because of the pension contribution changes coincides with the pay award and back pay, some members in Band 8A will have contribution arrears. This is dependent on their pay point and whether they work full or part time. The RCM along with other health unions pushed the Government to waive these arrears, but this has been rejected. The Government argue that the changes are an attempt to rebalance the scheme’s member contribution structure. NHS Employers are writing to trusts asking them to organise a payment plan for those adversely affected and that they should not expect the money to be paid back in a lump sum. Some organisations have already done this.
“For many these changes could not come at a worse time. RCM members at all levels are adversely affected by the cost-of-living crisis on top of an inadequate and insulting pay award, which is something we and our members are challenging. These pension contribution changes could aggravate the situation for many and add to their money worries,” said Lynne Galvin. “These are very difficult time for many and with our members we will continue to fight for a better pay award to offset rising prices and the effects of these pension changes.”
RCM members in England and Wales in a recent RCM consultation voted overwhelmingly to be balloted for industrial action over pay. Seventy-five percent said they would be willing to carry out that action if necessary. After consideration by the RCM Board the RCM will now be balloting its members in England and Wales on industrial action with the dates to be announced in the coming weeks. This follows the announcement of a ballot of RCM members in Scotland who rejected their government’s 5% pay offer.
The RCM will be updating members on developments around their pensions, including an online Q&A session with RCM and external experts. The dates for that will be announced soon. Previous online RCM pension updates can be viewed HERE.
Further information see the RCM’s pension pages at NHS Pensions (rcm.org.uk)