As always, the world of NHS pensions progresses apace – and even though I only published a blog just last week, I can now update you on the outcome of the Scottish Public Pensions Agency (SPPA) consultation on member pension contributions.
The SPPA have taken into account many different views no doubt – and here’s the result – just click on this link for the new rates structure that will apply from the start of October.
What this means in terms of doctors and what we asked for is obviously the crucial point. In the end more than 260 of you made use of our tool to respond to the consultation and while we haven’t achieved all that we wanted (pensions battles are rarely won in a day!) there is no doubt we have had an impact. Even the SPPA admit as such.
Perhaps the most significant win we can point to is the change from basing contributions on whole time equivalent pay to actual pay. This is something for which we have long advocated and is absolutely vital for ending the unfairness currently affecting those that work less than full time.
The SPPA consultation response confirms regulations will be amended to implement “the assessment of a tiered contribution rate for part-time employed members based on their actual annual rate of [pensionable] pay rather than the notional whole-time equivalent.” So, this is one significant step forward.
Other notable changes focus on the tiers. We have long argued that under a CARE scheme (which all members are now in), there should be a flat contribution structure. The NHS Scotland pension scheme currently has the highest maximum employee contribution rates of all the public sector schemes at 14.7% (vs 8.1% in the civil service scheme) and also the steepest tiering – with a 290% difference in contribution rates across the structure. An overall yield of 9.8% is required for the scheme by the Treasury, therefore in our view, as many scheme members as possible should be paying that rate.
On that basis the removal of the top two tiers over the next two years is admittedly a small first step – but at least a step in the right direction. They have now also introduced a 9.8% for those in new contribution tier 5, so that has at least tried to address the fact that no-one was paying that amount, something that was highlighted in our response. They’ve also sought to address some of the increases which I know have been a concern to members in the £35,365 to £68,222 brackets by reducing them – although there will still be increases just more limited than originally proposed.
Bringing the two threads together, it is worth noting that there’s a cost implication to the move from whole time equivalent pay to actual pay, which is part of the reason and explanation for the increases across the contribution structure.
Speaking very generally, we still don’t have a flat contribution scheme, which we believe would be the fairest way to go. And to be honest I don’t see them moving in that direction any time soon – but I do think our responses have pushed some improvements to the original proposals. That is particularly true when you consider the many voices with competing interests that have contributed and go on contributing to the debate on the NHS pension scheme.
It shows that we can and do have an impact when we organise and push for changes – which can and must continue on pensions.
Dr Alan Robertson is Chair of BMA Scotland’s Consultant Committee and sits on the BMA Pensions Committee
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