NHS Pension Update

By Jon Skewes on 16 August 2019 Pensions NHS

With public sector pensions appearing in the news recently I wanted to take this opportunity to give you a short update on the RCM’s position and role in influencing the NHS scheme.

The RCM is a member of the pension Scheme Advisory Board (SAB) which covers England and Wales and enables us to influence the scheme as a whole on behalf of our members. SAB membership also includes other NHS trade unions, employer representatives, the Department of Health and advisors including actuaries, lawyers and auditors. The SAB aims to work in partnership to provide advice to the responsible authority (the Secretary of State) on the desirability of changes to the scheme and also respond to policy issues or to proposed changes to the regulations governing the scheme.

Through SAB the RCM responded to the Department of Health and Social Care (DHSC) consultation on potential adjustments to the scheme to ensure its future sustainability (for more information on the NHS Pension Scheme cost cap breach see link). The proposals made by SAB included:

  • Using actual pay rather than whole-time equivalent pay to determine the tier used for member contribution rates, this would ensure equity for those members of staff who work part time.
  • Resolve “cliff edges” in the current contribution structure to mitigate against the likelihood of a pay award resulting in a member moving to a higher contribution rate.
  • Introducing flexibilities into the scheme such as offering a “50/50” option where members pay half the full contribution for half the pension build up to deal with affordability issues.

The work being done by SAB has been paused due to a recent court ruling (known as the McCloud judgement) on part of the 2015 pension reforms which found that the  ‘transitional protection’ offered to some members when the 2015 scheme was introduced were discriminatory. The Supreme Court has now ruled that the government is not granted an appeal and although the case was not taken against the NHS pension scheme there are potential implications across the public sector. For more information you can read the statement from Elizabeth Truss (The Chief Secretary to the Treasury) here.

The RCM is working with other NHS trade unions to ensure that the 25 year government guarantee on public sector pension schemes from 2015 is maintained. We are also engaging with ministers and civil servants through the TUC to clarify what this might mean for the NHS scheme and what the government might do in terms of a remedy.

You may also have seen in the media proposed changes to pension rules for senior clinicians impacted by taxation changes, the proposals included introducing a more flexible offer. The RCM believes that any flexibilities introduced should apply to all members of the scheme to ensure it is affordable to all. Fundamentally this issue for high earners is a tax issue and should be dealt with through that route rather than through the pension scheme. The proposals I outlined above would ensure far more equity, for all staff in the NHS.

The RCM are unable to give any individual advice about pensions, our pension webpage includes a brief overview of the 2015 pension scheme along with links to relevant NHS Business Services Authority Briefings.