Presentation is loading. Please wait.

Presentation is loading. Please wait.

Vote Yes for November 30 th - Our Day of Action. Defending the National Health Service Pension Scheme What is the current situation? What is the Coalition.

Similar presentations

Presentation on theme: "Vote Yes for November 30 th - Our Day of Action. Defending the National Health Service Pension Scheme What is the current situation? What is the Coalition."— Presentation transcript:

1 Vote Yes for November 30 th - Our Day of Action

2 Defending the National Health Service Pension Scheme What is the current situation? What is the Coalition Government proposing and how does it reflect Hutton’s recommendations? What is the Union doing? youHow can you help?

3 Background Currently 2 schemes in operation in the NHS – 1995 section – 2008 section New starts since 2008 are in 2008 section Other scheme members in 1995 section

4 1995 Scheme Benefits Final salary scheme based on best salary in last 3 years Full pension payable at 60 1/80 accrual rate for every year in scheme (index linked) Minimum tax free lump sum of 3/80 final salary for each year in scheme (some flexibility to increase) Maximum membership 45 years overall. Cannot be a member after 70 Voluntary early retirement from 50 with reduced pension

5 2008 Section Final salary scheme maintained Normal pension age increased to 65 Early retirement from 55 with reduced pension 1/60 accrual rate Maximum scheme membership 45 years Pension based on average of best 3 consecutive years salary in last 10 years (allows step down) –All but last years pay revalued in line with RPI before average of best 3 consecutive years calculated

6 2008 Section (ii) Variable tax free lump sum - nothing up to 25% of total pension value = 4.2857 x pension –Pension reduced by £1 for every £12 taken as a lump sum Draw down option –Take part of pension whilst continue working in a less demanding role –Certain rules apply Pensionable re-employment allowed Same death benefits etc as existing members in new scheme

7 Additional Changes 2008 All employee contribution rates (irrespective of section) increased to ensure schemes viable Cap placed on employer contributions so cost to tax payer does not increase Any future changes to the NHS Pension Scheme should be negotiated in partnership. Current NHS Pension scheme - £2Bn surplus

8 Pensions Choice Exercise In 2010 there was an exercise allowing 1995 section members to switch to the 2008 section A minimal number of staff switched. All new starts to the NHS join 2008 scheme The exercise is almost irrelevant since, based on the Government’s proposals, all public sector pension schemes will change in 2015

9 Government Proposals and the Prospect for NHS Employees Pay more for your pension Wait longer for your retirement Get less when (if?) you retire Lose the protection of Fair Deal

10 What’s all the fuss about? The new schemes are being proposed without meaningful negotiations Planned implementation date for most changes 1/04/15 –Increased contributions –Increased normal pension age –CARE scheme & revaluation in line with annual pay awards –1/65 accrual rate with no lump sum –CPI used instead of RPI as annual uplift calculator for pension –Existing pensions up to 2015 protected with existing scheme benefits. Then from 2015-new scheme applies. Could have destabilising effect on scheme membership

11 Pay More for Less Pension Part of Govt plans to reduce public spending Average increase in contributions of 3.2% phased in between 2012-2014 (no increase if salary < £15000) Unions accept some increase may be necessary but not the amounts proposed and this should maintain current benefits, not reduce them The increases are to save the Treasury money, reduce the cost of the NHSPS & pay off the banking debts, not to benefit the scheme NB: the Scottish Public Pensions Agency is consulting on a possible increase lower than that proposed by Westminster. Treasury threatening funding reduction.

12 Full time equivalentContribution rate (before tax relief) Pensionable pay2011/12 2012/132013/14 2014/15 Up to £15,0005% 5% 5% 5% £15001-£211755% 5.6% 6.2% 6.5% £21176-£26557 6.5% 7.1% 7.7% 8.0% £26558-£48982 6.5% 7.7% 8.7% 9.2% £48983-£69931 6.5% 8.5% 10.2% 11% £69932-£110273 7.5% 9.8% 12% 13% Over £110273 8.5% 10.9% 13.5% 14.5%

13 Annual reduction in take home pay (after tax relief) (based on top of pay band) Reduction in take home pay Pay Band2012/132013/142014/15 282163204 390181226 4105209262 5265486597

14 Annual reduction in take home pay (after tax relief) (based on top of pay band) Reduction in take home pay Pay Band2012/132013/142014/15 6313574704 7386707867 8a336616784 8b67112421511 8c80514901813

15 Work Longer to Get your Pension Retirement age to be brought in line with state pension age (this was a Hutton cost-cutting recommendation) Currently 65 but increases to be phased in Proposed normal pension age of 66 in 2020 and 67 in 2027 Further increase planned - possibly rising to 70 in the future? There will still be option to retire early with a reduction in the annual pension (approx 5% reduction for each year below normal pension age)

16 Live on Less in Retirement Value of pension in new schemes based on career average revaluated earnings rather than final salary (another Hutton recommendation) Past service benefits retain link to final salary Revaluation of earnings based on annual salary increases Revaluation would be below inflation

17 1/65 accrual rate with no lump sum Better accrual rate than 1995 section but no lump sum when lump sum taken into account - reduction in value Worse accrual rate than 2008 section (typical 8% reduction in value)

18 CPI rather than RPI Inflation measure used to uplift pension paid each year CPI is lower than RPI –in 11 months out of 12, the CPI gives a lower figure for annual inflation than the RPI - historically, the CPI has given a figure for inflation more than 1% a year lower Based on current predictions this means after 10years of retirement, pension 8.5% lower with CPI and after 20 years it is 17% lower No consultation on this point which was implemented in April 2011 Legality of this change is currently subject of judicial review

19 No Fair Deal Fair Deal is the hard-won protection by which a private contractor / charitable body has to offer a broadly comparable pension to outsourced NHS employees The Government is seeking to remove this protection - it’s “a barrier to outsourcing” Outsourced employees could end up with a hugely inferior pension - as they can under TUPE in the private sector

20 What the Union is Doing Unite has been negotiating with the Government alongside the other unions Together with other unions we are mounting a legal challenge to the move from the RPI to the CPI The point has been reached where only positive action will make employees’ feelings known to the Government Unite has produced a range of materials - leaflets, posters and briefings - to support the campaign

21 Ballot for Industrial Action 1st proposed day for national industrial action The vote is your voice - use it GHP/Unite advice is to vote yes to industrial action Government want to impose changes Unions want meaningful negotiations around all the proposals for any new scheme. Any changes must be justifiable A yes vote is a mandate for industrial action on November 30th and beyond

22 Ballot for Industrial Action Strike action is a last resort Hope is that the threat of mass strike action will get ministers to enter into meaningful negotiations If this happens then unions can call off strike action Government starting to make concessions already

23 November 30th If yes vote - industrial action up to and including strike action Employees have the right to take part in legal industrial action against the employer You are not in breach of code of ethics –Unison Vs NMC If result of ballot is yes, what does this mean for the individual member?

24 Industrial Action by Unite Members in the NHS Should guarantee patient safety and deliver a safe service Public holiday cover as determined by professional and clinical staff Minimum number of staff that are needed to meet essential needs of the patients Level of cover/services equivalent to those provided on a Public Holiday You are not entitled to pay if on strike –NB: deduction is not one day’s salary, but 1/365 th of salary

25 Government Misinformation public service pensions are gold-plated - half of NHSPS pensioners who are women receive less than £3,500 a year in pension public sector pensions are feather-bedded - they are an integral part of basic terms & conditions the NHSPS is unaffordable & unsustainable the scheme is cash rich, currently paying directly to the Treasury around £2 billion a year more than it costs to pay out pensions

26 Update 2/11/11 The real threat of mass industrial action has led to ministers starting to make concessions 1/60 accrual rate for new scheme Anyone due to reach normal pension age in the next 10 years (from 1/4/12) will be excluded from the changes All other proposals stay the same This is a start but it is not enough Further analysis being undertaken for sector specific schemes but not enough to call off day of action yet

27 More Government Misinformation DA – “discussions started in February, and are still going on. Despite some of the public comment, significant progress has been made” Unite – This is the first movement from the government DA – “offering an increase to the [accrual rate to] 1/60th of average salary” Unite – It is currently 1/60th for those in the 2008 scheme and 1/80th for those in the original scheme. It is not an increase – it is the removal of the reduction DA – “A nurse with a lifetime in public service and a salary at retirement of £34,200 would receive £22,800 of pension each year if these reforms were introduced, whereas under the current 1995 NHS Pension Scheme arrangements they would only get £17,300.” Unite – Only if they were at the top of band 6 for their whole career. Also no mention of the lump sum.

28 November 30th – Our Day of Action The Government’s proposals are unjust & unnecessary They are an attack on the idea that anyone should retire on a decent pension Fight for our future and for dignity & security - in & after work Vote Yes to the Day of Action

29 What happens if we vote NO? Government is free to do whatever they want as staff will not stand up and oppose them What is next? –Terms and conditions? No salary increments? Permanent pay freeze? Reduced annual leave? Reduced sickness benefit and sick leave? Will Holyrood be forced to comply?

30 No Ballot Paper? s/pensions/protecting_pensions_for_o ur_pu.aspx s/pensions/protecting_pensions_for_o ur_pu.aspx 0208 889 9203

31 Any questions?


Download ppt "Vote Yes for November 30 th - Our Day of Action. Defending the National Health Service Pension Scheme What is the current situation? What is the Coalition."

Similar presentations

Ads by Google