NHS pay review body: twenty-sixth report 2012 - Official Documents

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as to remove the need for a contribution increase for members earning up to £26,557.
The Department stated that these modifications would achieve the required cost savings
within the UK Government’s preferred scheme design parameters. Continuing discussions
with trade unions were planned on contribution rates for 2013/14 and 2014/15 and
longer term reforms to pension schemes from April 2015.
12 1.26 On 20 December 2011, the Secretary of State announced the heads of agreement
following discussion with NHS trade unions and employers. It set out the UK
Government’s final position on the NHS Pension Scheme design from 2015 and included
the level of member contributions for 2012/13. At the time of submission of this report,
individual NHS trade unions were considering their responses to the UK Government’s
final position.
1.27 On public service pensions more generally, the UK Government announced on
2 November 2011 the detail of its “offer” to public sector workers to come into force in
2015. The “offer” included a more generous accrual rate from 1/65ths to 1/60ths and
those workers within 10 years of their pension age on 1 April 2012 would be protected.
The Government’s proposals were conditional on agreement being reached in scheme by
scheme talks.
1.28 In evidence for this report, the Staff Side expressed concern about the Government’s
planned pension changes which would mean that NHS staff would work longer, pay
more and get less. As staff currently paid around 6% of their total salary as pension
contributions, the Staff Side considered there could be a 50% increase in contributions
for a significant number and a rise of 25% even for the low paid. They viewed this as a
substantial loss of earnings coming on top of the erosion in wages caused by inflation
during the pay freeze. The Staff Side also pointed to a range of individual union surveys
which they considered demonstrated the dangers of pension reforms, the growing sense
of uncertainty and anxiety about increased contributions to the NHS scheme, the impact
of contribution increases on the low paid, and the high proportions that might leave the
scheme. On 30 November 2011, the Trades Union Congress held a “day of action” to
reflect the concerns of trade union members over Government proposals for public sector
pensions.
1.29 During this round, we have monitored developments in public sector pensions and
specific proposals for the NHS Pension Scheme. It is clear from the Staff Side evidence
that NHS staff have significant concerns over planned increases in contributions from
2012 and longer term changes from 2015. Such changes will impact on the “total
reward package” available to NHS staff and might influence recruitment, retention and
motivation. We comment briefly in Chapter 6 on how these might feature in our remits
during 2012.
Legal Obligations on the NHS
1.30 Under our standing terms of reference we are required to take account of legal
obligations on the NHS including anti-discrimination legislation. During our oral evidence
sessions, the parties confirmed that there were no specific issues for consideration under
the remit for 2012/13. In written evidence, UNISON commented that the NHS Staff
Council had reviewed and amended the NHS Terms and Conditions Handbook to ensure
compliance with the Equalities Act 2010. The Joint Staff Side and NHS Employers also
updated us on the publication of the NHS Staff Council’s toolkit in March 2011 to help
employers meet their obligations under equality legislation.
12 Available at: http://www.dh.gov.uk/health/2011/12/pensions-agreement/.