Temperatures are rising in the NHS as plans reveal intentions to slash final salary schemes for more than a million staff; replacing them with the less popular average career salary pensions.
Government ministers argue that the new pension calculations will favour lower-paid staff and those who work part-time or take career breaks, whose salary might not be higher at the end of their career.
Senior doctors, nurses and consultants will be hit the hardest whose salaries traditionally peak over time. It is thought the reforms could result in a £20,000 a year loss in pension payments for senior doctors.
The Times report that ministers concede that the new system in effect redistributes wealth from the higher earners to those less well-paid.
The British Medical Association (BMA) has strongly opposed the proposals.
Dr Andrew Dearden, Chairman of the BMA Pensions Committee said: “This is a fundamental change to doctors’ terms and conditions of employment. We want to hear views from all doctors, but particularly from those under age 50 who will be most affected by these proposals.”
The Government proposes to increase from 60 years to 65 years the age at which a pension can be taken without being reduced. The BMA has opposed this notion since it was first announced in 2003.
The proposals allow for a three-month consultation period but ministers will make the final decision on which is adopted.
Dr Dearden added: “The consultation period will be for three months until 11 April. However, doctors should send their comments to the BMA before the end of February so that they can be considered and help form the response from the Association.”
Only last week Health Minister John Hutton announced up to £75m to fund new contracts for NHS doctors in the staff and associate specialist (SAS) grades.
Hutton has asked NHS Employers to negotiate new contractual arrangements for these staff for implementation from April 2006. The reforms will benefit over 7,000 NHS personnel, they said and improve retention of doctors who are not at consultant or GP level while driving recruitment.
Reforms could include a stronger link between pay and competence, incentives for out of hours working, where appropriate, and a degree of local flexibility to meet patient needs, including availability of recruitment and retention.
On the two issues a spokesperson at BMA told HRZone: “Consultants are expected to prefer the final salary schemes but it may be that other levels of doctors will prefer the average career salary pension. I don’t feel that this news has soured the announcement for funding made last week. Indeed the new pension proposals may well be in favour of SAS doctors – although some consultants might be dismayed.”
2 Responses
NHS not immune to market realities
If remuneration packages not comensurate or proportionate with time to train, aptitude required and effort to train or maintain competence over a career and reflective of the responsibility of the job, doctors and other highly skilled health professionals will seek more rewarding careers or positions in more appreciative jurisdictions or outside the NHS.
Differential pay and benefit systems are the markets way of valuing such factors. The market will prevail!
How many will live to enjoy their pensions?
It may be that the demographics have altered but I recall that a couple of years ago seeing figures regarding life expectancy of doctors. Those who retired after sixty had significantly lower life expectancy than those who retired earlier.
One way of reducing costs on a pension fund is to create [albeit unwittingly?] a situation in which the pensioners die quickly after they become eligible.
As I say maybe the figures are different to those I recall. Or not.