NHS Pension Scheme

1. NHS Pension Scheme

2. Agreed in 2008 A 1995 and 2008 section NHS Choice exercise Tiered and progressive contribution rates Employer cap of 14% on contributions Cost sharing arrangements between employers and employees Negotiations in 2008 and subsequent agreement on 1995 and 2008 sections addressed the issues of longevity and gave members a choice Contribution rates were tiered so that lower paid workers contributed less Cost sharing arrangements gave stability going forward to address future pressure and strain on the schemeNegotiations in 2008 and subsequent agreement on 1995 and 2008 sections addressed the issues of longevity and gave members a choice Contribution rates were tiered so that lower paid workers contributed less Cost sharing arrangements gave stability going forward to address future pressure and strain on the scheme

3. Contribution Increases Lower paid are protected < £26K The cost will be borne by the middle and high earners If this formula is mirrored over the next three years top earners could be paying >14% of pay into their pension No discussion on contributions beyond 2013 scheduled until autumn 2012 Opt outs then become a real threat to the scheme and the long term viability of the NHS scheme is brought into questionLower paid are protected < £26K The cost will be borne by the middle and high earners If this formula is mirrored over the next three years top earners could be paying >14% of pay into their pension No discussion on contributions beyond 2013 scheduled until autumn 2012 Opt outs then become a real threat to the scheme and the long term viability of the NHS scheme is brought into question

4. Proposed Contribution Increases Lower paid are protected < £26K The cost will be borne by the middle and high earners If this formula is mirrored over the next three years top earners could be paying >14% of pay into their pension No discussion on contributions beyond 2013 scheduled until autumn 2012 Opt outs then become a real threat to the scheme and the long term viability of the NHS scheme is brought into questionLower paid are protected < £26K The cost will be borne by the middle and high earners If this formula is mirrored over the next three years top earners could be paying >14% of pay into their pension No discussion on contributions beyond 2013 scheduled until autumn 2012 Opt outs then become a real threat to the scheme and the long term viability of the NHS scheme is brought into question

5. Paying More Increased contributions to 2015 Average contributions will be 9.8% previously 6.6% Future employer contribution? Tiered contributions in CARE Ongoing public sector pay restraint Future increases are likely up to 2015 and beyond Average of 9.8% by 2015 .This equates to paying 40-50% more in contributions There are no guarantees on contribution levels beyond 2015 There are indications that government may seek to lower employer contributions in the future and demand higher percentages from employees There is little justification for tiered contributions in a CARE scheme and no indication of how government propose to deal with this post 2015 but this could impact on the lower paid All these increases are against a background of ongoing pay restraint with an indication that this will be the pattern for the coming years Record price increases for fuel, energy and foodFuture increases are likely up to 2015 and beyond Average of 9.8% by 2015 .This equates to paying 40-50% more in contributions There are no guarantees on contribution levels beyond 2015 There are indications that government may seek to lower employer contributions in the future and demand higher percentages from employees There is little justification for tiered contributions in a CARE scheme and no indication of how government propose to deal with this post 2015 but this could impact on the lower paid All these increases are against a background of ongoing pay restraint with an indication that this will be the pattern for the coming years Record price increases for fuel, energy and food

6. Working Longer Current NHS retirement ages 55/60/65 2015 Normal Pension Age equal to State Pension Age State Pension Age set to rise to 68 and beyond Uniformed services not linked to state pension age Current range of retirement in the NHS is 55 for special categories, 60 for 1995 section and 65 for 2008 section. State pension age is set to rise to 68 and possibly beyond to 70 Current average retirement age in the NHS is 63 Examples of health workers at 68 ambulance paramedic, community nurse, hospital porter, estates and maintenance, what would be the impact on health and wellbeing of the individual and on the services provided Fire and police services not required to work to state pension age, why is there inconsistency across uniformed servicesCurrent range of retirement in the NHS is 55 for special categories, 60 for 1995 section and 65 for 2008 section. State pension age is set to rise to 68 and possibly beyond to 70 Current average retirement age in the NHS is 63 Examples of health workers at 68 ambulance paramedic, community nurse, hospital porter, estates and maintenance, what would be the impact on health and wellbeing of the individual and on the services provided Fire and police services not required to work to state pension age, why is there inconsistency across uniformed services

7. Getting Less Indexation of NHS Scheme changed from RPI to CPI CPI lower than RPI Future predictions of CPI at 1.2% less than RPI Overall benefits reduced by 15% Joint Union Legal Appeal RPI to CPI unilaterally changed by Government, no consultation no agreement CPI traditionally lower than RPI. predictions point to apotential differential of 1.2% going forward This affects all scheme members active, deferred and pensioners Estimates are that, as a result of this switch, benefits will reduce by 15% All resulting savings are going straight to the Treasury Unite with other trade unions have lodged an appeal against the high court decisionRPI to CPI unilaterally changed by Government, no consultation no agreement CPI traditionally lower than RPI. predictions point to apotential differential of 1.2% going forward This affects all scheme members active, deferred and pensioners Estimates are that, as a result of this switch, benefits will reduce by 15% All resulting savings are going straight to the Treasury Unite with other trade unions have lodged an appeal against the high court decision

8. CARE Scheme Accrual rate 1/54th Revaluation set at CPI plus 1.5% No automatic lump sum Lower benefits than final salary for career progression 1/54th plus revaluation at CPI plus 1.5 is the worst rate across public service schemes Revaluation of average earnings over working life in the NHS rather than final salary will determine pension benefits No automatic lump sum Members who have promotional career pathways will lose out on CARE as opposed to final salary Many Unite members move up at least one pay band throughout their working lives 1/54th plus revaluation at CPI plus 1.5 is the worst rate across public service schemes Revaluation of average earnings over working life in the NHS rather than final salary will determine pension benefits No automatic lump sum Members who have promotional career pathways will lose out on CARE as opposed to final salary Many Unite members move up at least one pay band throughout their working lives

9. Protection Full Protection for members within 10 Years of Normal Retirement Age Tapered Protection for a further 3.5 years Paying More Getting Less Benefit of protection for 2008 Section members? 25 Year Guarantee Protection offered for staff within 10 years of normal retirement age Tapered protection for a further 3.5 years, for each month of age above the ten years members two months of delay is lost Protected members will still face increased contributions and the loss of benefit from the RPI to CPI indexation Members in the 2008 scheme may not benefit from the “protection” as the 1/54 accrual rate in the new scheme may be of better value This guarantee is worthless, the unions had a previous “guaranteed arrangement” which was discarded. State Pension age could be increased at any time. There is no guarantee on the employer cap for contributions, currently 14%. Protection offered for staff within 10 years of normal retirement age Tapered protection for a further 3.5 years, for each month of age above the ten years members two months of delay is lost Protected members will still face increased contributions and the loss of benefit from the RPI to CPI indexation Members in the 2008 scheme may not benefit from the “protection” as the 1/54 accrual rate in the new scheme may be of better value This guarantee is worthless, the unions had a previous “guaranteed arrangement” which was discarded. State Pension age could be increased at any time. There is no guarantee on the employer cap for contributions, currently 14%.

10. Further Discussions Fair Deal and Access to the NHS scheme Working Longer Review Group Contributions 2nd Choice Opt outs Access to the NHS scheme for staff who are outsourced, contracted out or (AQP) Any Qualified Providers will be discussed through the Staff Passport Group Working Longer Review will look at the impact of working longer for specific staff who have demanding roles and how this can be managed through employer funded early retirement or member funded early retirement, there can be NO review of state pension age equals normal retirement age There needs to be a “2nd Choice” exercise to revisit 1995 Section members not covered by protection There will be an ongoing review of opt outs from the scheme as concern grows that large numbers of low paid and high earners will in future not contribute to the schemeAccess to the NHS scheme for staff who are outsourced, contracted out or (AQP) Any Qualified Providers will be discussed through the Staff Passport Group Working Longer Review will look at the impact of working longer for specific staff who have demanding roles and how this can be managed through employer funded early retirement or member funded early retirement, there can be NO review of state pension age equals normal retirement age There needs to be a “2nd Choice” exercise to revisit 1995 Section members not covered by protection There will be an ongoing review of opt outs from the scheme as concern grows that large numbers of low paid and high earners will in future not contribute to the scheme

11. Defend Your Pension Working Longer Higher Contributions Lower Benefits All income and savings from reforms going to HMT Calculate your benefit on the pensions calculator at www.unitetheunion.org/health There has been very little movement from government during the talks and insufficient progress on key issues of paying more, working longer and getting less Doing nothing will allow the government to carry on raiding the public sector pensions and attacking public sector workers Working longer will have a huge impact on the quality of life in retirement, working longer will impact on service delivery The RPI to CPI change is already hitting pension benefits The increased contributions will be imposed next year and beyond All income and savings generated will go to treasury to pay off the national budget deficit which was not caused by public sector workers Please urge members to get their own calculation on the Unite pensions calculator There has been very little movement from government during the talks and insufficient progress on key issues of paying more, working longer and getting less Doing nothing will allow the government to carry on raiding the public sector pensions and attacking public sector workers Working longer will have a huge impact on the quality of life in retirement, working longer will impact on service delivery The RPI to CPI change is already hitting pension benefits The increased contributions will be imposed next year and beyond All income and savings generated will go to treasury to pay off the national budget deficit which was not caused by public sector workers Please urge members to get their own calculation on the Unite pensions calculator

12. Consultative Ballot Ballot opens 1st March Ballot closes 19th March Union Consultation Member support and participation Reject the Pension Reform Proposals Day of Action 28th March Consultative Ballot conducted through ERS Other unions are consulting their members February to end of March Unite and BMA have rejected the Heads of Agreement Unite are recommending rejection of the proposals as there has been insufficient progress on paying more, working longer, getting less Proposed day of action 28th March Workplace meetings, pensions forums across all regions. Consultative Ballot conducted through ERS Other unions are consulting their members February to end of March Unite and BMA have rejected the Heads of Agreement Unite are recommending rejection of the proposals as there has been insufficient progress on paying more, working longer, getting less Proposed day of action 28th March Workplace meetings, pensions forums across all regions.