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NHS Pensions Briefing

NHS Pensions Briefing. And Industrial Action Ballot. Why are we here today?. The SoR is balloting members on industrial action over NHS pensions and is campaigning for a “Yes” vote By the time you vote we want to make sure:

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NHS Pensions Briefing

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  1. NHS Pensions Briefing And Industrial Action Ballot.

  2. Why are we here today? • The SoR is balloting members on industrial action over NHS pensions and is campaigning for a “Yes” vote • By the time you vote we want to make sure: a) that you fully understand the Government’s proposals and their implications for your pension b) that you understand what strike action entails c) that you understand why your vote is important

  3. Industrial action ballot • The industrial action ballot will open on 28 October and close at midday on 14 November • The result of the ballot will be placed on the SoR website on the same day. • If the vote is in favour, a day of strike action will be called for 30 November • Other organisations who are balloting include UNISON (including nurses and OTs), the CSP, Unite (including speech and language therapists and Health Visitors), the British Dietetics Association, the managers’ organisation MiP and the Society of Chiropody and Podiatry,and theGMB.

  4. Current NHS pension scheme • The ‘new’ NHS pension scheme was agreed in 2007 following more than 3 years of negotiations and includes: • higher employee contributions – the more you earn the more you pay • a 14% cap on employer contributions • a cost sharing agreement meaning employees meet the cost of any increases needed due to rising life expectancy • an increase in normal pension age from 60 -65 for members in the ‘new’ scheme • a pension age of 60 (55 for members of the special classes) for members staying in the ‘old’ 1995 scheme .

  5. Current costs • The NHS pension scheme is affordable and sustainable. Currently the scheme contributes to the Treasury each year (£2bn in 2010) • The Public Accounts Committee says the ‘new’ public sector pensions schemes are likely to reduce overall costs to the taxpayer by £67bn over the next 50 years • Most SoR members currently contribute 6.5% of their salary into their pension each month

  6. The proposals: pay more • to rise by an overall 3.2% by 2014/2015, with the increase being in stages starting in April 2012 • Protection for low paid workers may mean that middle and higher earners see their contributions rise by more than 3.2% • For most SoR members, this means the amount they pay into their pensions will go up by around 50% over the next 3 years • Occurring in tandem with the current public sector freeze, this means that members will see their take home pay go down

  7. Work longer • The Government intends to raise the pension (retirement) age for the NHS scheme by linking it automatically to the rising state pension age • This means that the age when you could take your full pension would be: • 65 if you are over 57 now • 66 if you are 42-57 • 67 if you are 34-42 • 68 if you are under 34 • The Government has also said it is considering whether to change that timetable and possibly bring those dates forward • Members wanting to retire and take their NHS pension before they reach the state pension age would have their pension ‘actuarially reduced’ by 4-6 % for each year before pension age

  8. Getless • The value of pensions has already been reduced as a result of the Government’s imposed change to the way that pensions are ‘uprated’ each year to take account of inflation • With effect from April this year, pensions will be uprated not by reference to the Retail Prices Index (RPI) but the lower Consumer Prices Index (CPI) This is likely to reduce the overall value of your pension by 10-15% • In addition, the Government wants to get rid of all final salary pension schemes for public sector workers and replace them with schemes based on career average earnings (a CARE scheme) • Further, the ‘accrual rates’ proposed for a CARE scheme are very unfavourable • The impact of this will vary depending on individual career paths but could reduce pensions by up to a further 25%

  9. Negotiations • The SoR has been closely involved in talks with Treasury Ministers and in NHS scheme specific discussions; both continue • Despite insisting they want to talk, the Government’s position in the three key areas outlined above has remained unchanged over the last 6 months • The Government has also refused to make available the costs information necessary for any meaningful talks to take place • SoR is committed to the talks and continues to work hard to achieve a negotiated outcome but • Has come reluctantly to the conclusion that additional decisive action is needed

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