Hospital Dr News

Pension contribution tiering flatter after 2015?

The health secretary has offered an olive branch to the profession over NHS pensions change suggesting that the tiering of doctors’ contributions might be ‘flatter’ post 2015.

In a letter to the BMA, Jeremy Hunt said discussions on he is to bring forward discussions on post-2015 contribution rates that were originally scheduled to begin next year.

He also said that, while the overall cost envelope for staff contributions remains unchanged, the government has not made any decisions about the contribution rates across salary levels from 2015.

The Bill, which enshrines the government’s structural changes, is currently going through its Commons stages will little political resistance. Doctors will move onto a career average pension scheme in 2015, except those who are within ten years of retirement.

Contribution rates are increasing rapidly. The Department of Health implemented the first of its rises in April. Consultants saw their contributions rise from 8.5% to 9.9%, with further rises – going up to 14.5% for highest earners – planned by 2014/15.

The BMA has argued that the new arrangements are unfair and called on doctors to lobby their MPs.

It says the government has ignored the changes that were agreed in 2008 – when higher earners started contributing more proportionally than lower earning members. The NHS pension scheme is in surplus and £250 billion worth of savings by 2060 have already been generated by changing the indexation method from RPI to CPI.

The union has argued that there is no justification for ‘tiered’ contribution rates in a career average earnings scheme.

The health secretary’s letter says: “I would like to assure you that while the NHS PS Proposed Final Agreement makes it clear that employee contributions will average 9.8% from 2015, we have not yet made any decisions about the tiering arrangements to deliver this. I can therefore confirm that we are looking for the NHS PS Governance Group of employers and trade unions to reach and consensus and make recommendations on this to the Department of Health.”

The government is still fully committed to changing the scheme, increasing contributions and extending the retirement age, however.

On 21 June 2012, doctors took industrial action over the pension changes but low ‘turnout’ affected its impact, and the BMA in England promptly switched to a negotiated approach.

BMA Scotland is currently balloting its members over additional, stronger industrial action i.e. strike action with emergency cover.

This latest ballot has been called specifically in relation to the ongoing dispute with the Scottish government which has devolved authority for limited aspects of the NHS pension scheme for Scotland.

The ballot closes on 28 November. On that day, BMA Council will consider the results of the ballot in Scotland and review the situation in the rest of the UK.

Read a blog on the topic.

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