Transcript Slide 1

Vote Yes for
November 30th - Our Day of Action
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?
• How can you help?
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
1995 Scheme Benefits
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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
2008 Section
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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
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
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
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
Government Proposals and the
Prospect for NHS Employees
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Pay more for your pension
Wait longer for your retirement
Get less when (if?) you retire
Lose the protection of Fair Deal
What’s all the fuss about?
• The new schemes are being proposed without
meaningful negotiations
• Planned implementation date for most changes 1/04/15
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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
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.
Full time equivalent
Pensionable pay
Contribution rate (before tax relief)
2011/12
2012/13
2013/14
2014/15
Up to £15,000
5%
5%
5%
5%
£15001-£21175
5%
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%
Annual reduction in take home pay (after tax relief)
(based on top of pay band)
Reduction in take home pay
Pay Band
2012/13
2013/14
2014/15
2
82
163
204
3
90
181
226
4
105
209
262
5
265
486
597
Annual reduction in take home pay (after tax relief)
(based on top of pay band)
Reduction in take home pay
Pay Band
2012/13
2013/14
2014/15
6
313
574
704
7
386
707
867
8a
336
616
784
8b
671
1242
1511
8c
805
1490
1813
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)
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
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)
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
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
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
Ballot for Industrial Action
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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
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
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?
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 1/365th of salary
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
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
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.
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
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?
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No salary increments?
Permanent pay freeze?
Reduced annual leave?
Reduced sickness benefit and sick leave?
• Will Holyrood be forced to comply?
No Ballot Paper?
• http://www.unitetheunion.org/resource
s/pensions/protecting_pensions_for_o
ur_pu.aspx
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0208 889 9203
Any questions?