NHS pension -what is the worst the govt can do?

iinvestor

a family member of mine works for the NHS as a Nurse.

She is currently 2 years away from having forty years of pension contributions and before she is able to retire on a "full" pension.


with the changes in pensions being proposed, what is the worst that could happen to her pension scheme. Currently she has final salary scheme. Could the government change this to a average earnings scheme. Or will existing staff simply be asked to contribute more?


how do you think she will be affected?

thanks

CLAPTON

the government is soverign and can change the law through due process

hugheskevi

with the changes in pensions being proposed, what is the worst that could happen to her pension scheme.

Immediate closure of the scheme, with final salary calculated as at the point of closure. Then that amount uprated by CPI until retirement. So for example, if you have 38 years and a salary of £20,000 then the scheme could be frozen, leaving you with a pension of (38/80)*20,000=£9,500 which is uprated by CPI until it is due to come into payment.

Currently she has final salary scheme. Could the government change this to a average earnings scheme.

Yes, that would be quite likely. But previous accruals would be protected (ie the 38 years already worked wouldn't be changed) so it would just be the next 2 years affected.

Or will existing staff simply be asked to contribute more?

That is almost inevitable, probably as an interim measure (ie very soon), with more reform (ie changing structure of scheme away from final salary) being implemented in the medium term (a year or two).

how do you think she will be affected?

Her pension has already been significantly reduced in value by the change to CPI indexation from RPI - that is likely to be the main way she will suffer.

Going forward, higher member contributions for the remainder of career (effectively a pay cut, probably something like 1-3% but nobody will know until Hutton publishes his interim report, which is due very soon). Then she may possibly have a year on a different type of scheme, but that won't make much difference to the final pension result.

real1314

CLAPTON wrote: »

the government is soverign and can change the law through due process

EU law takes precidence over UK Parliament, therefore any change would have to be within EU Law.

As the NHS / Government is acting as an employer in this situation, I would expect that all EU laws in respect of employment / employers pensions would have to be adhered to.

getmore4less

iinvestor wrote: »

a family member of mine works for the NHS as a Nurse.

She is currently 2 years away from having forty years of pension contributions and before she is able to retire on a "full" pension.


with the changes in pensions being proposed, what is the worst that could happen to her pension scheme. Currently she has final salary scheme. Could the government change this to a average earnings scheme. Or will existing staff simply be asked to contribute more?


how do you think she will be affected?

thanks

The NHS scheme has allready been changed there are now 2 schemes and she needs to make some significant choices.

Is she old/new

Is she a special case(probably is with 40 years) i think they can do more years(upto 45) or retire early in the old scheme

The old scheme is based on best year in the last 3 so she should be looking to enhance the pension by only doing enhanced shift.

MY OH went part time did the high paying shifts for a year then retired early, pension is index linked so rises similar to the wages anyway.


Any new changes should not impact existing rights too much.

dunstonh

Even with the change for RPI to CPI, it is still a very very good scheme. So, don't let the reduction in indexation give the wrong impression. Its moving from a scheme that is far too good for the amount the individual pays to being very good and better than most.

cyclonebri1

real1314 wrote: »

EU law takes precidence over UK Parliament, therefore any change would have to be within EU Law.

As the NHS / Government is acting as an employer in this situation, I would expect that all EU laws in respect of employment / employers pensions would have to be adhered to.

Totally out of context with this post, but:

Why is it that the UK, seems to be the only upholder of EU law? :A

Goldenyears

getmore4less wrote: »

The old scheme is based on best year in the last 3 so she should be looking to enhance the pension by only doing enhanced shift.
.

Interesting. Many final salary public sector schemes (most ?) do not allow you to boost pension in this way, eg. shift/overtime/travel time payments not allowed for pension purposes, basic salary only. Is the NHS scheme really different?

getmore4less

Goldenyears wrote: »

Interesting. Many final salary public sector schemes (most ?) do not allow you to boost pension in this way, eg. shift/overtime/travel time payments not allowed for pension purposes, basic salary only. Is the NHS scheme really different?

Yes enhanced rates are pensionable that included, unsocial,Sat,Sun,nights, bankholidays.

Depends on the workers and pay scale what the enhanced rates are 30% and 60% are typical for nurses.

Upto full time hours are included, overtime is not.

Max uplift is 60% but very very difficult to do since most workers allready do some shift with enhanced payments, if they do a year of as many as they can especialy all bank holidays(60%) and Sundays(60%) they can increase the pension by at least 20%.

Best of the last 3 years is taken.

The new scheme is very different and it is harder to do this.

cyclonebri1

getmore4less wrote: »

Yes enhanced rates are pensionable that included, unsocial,Sat,Sun,nights, bankholidays.

Depends on the workers and pay scale what the enhanced rates are 30% and 60% are typical for nurses.

Upto full time hours are included, overtime is not.

Max uplift is 60% but very very difficult to do since most workers allready do some shift with enhanced payments, if they do a year of as many as they can especialy all bank holidays(60%) and Sundays(60%) they can increase the pension by at least 20%.

Best of the last 3 years is taken.


The new scheme is very different and it is harder to do this.

Wellcome to the real world that non public sector workers have been fighting over for some years now. Expect a shafting sometime soon :(

getmore4less

cyclonebri1 wrote: »

Wellcome to the real world that non public sector workers have been fighting over for some years now. Expect a shafting sometime soon :(

It's total package that matters, lower pay better benifits, nurses in general have been underpaid but have had fairly good pension scheme if they did the years, many don't since it is female dominated industry.

By cutting the benifits for new entrants to the industry it puts pressure on the base salaries upwards which actualy benifits those with years of the older benifits, WIN WIN.