Pay and Pensions
From A BMA Perspective From A BMA Perspective
Dr Cait SearlConsultant Cardiothoracic Anaesthetist / Intensivist
Newcastle upon Tyne Hospitals NHS Foundation Trust
RemitRemit
• Pay
• CEAs / distinction awards
• Pensions
• Questions for you
Pay freeze Pay freeze
PAY FREEZE PAY FREEZE
DDRB – current round of evidence in progress
-Relative position of doctors
-Morale / Motivation
PAYPAY
Foundation trusts & national T&Cs- incremental pay progression
- sickness entitlements
- extending working day
- study leave expenses / time
- SPAs ………
PAYPAY
Pay freeze
Foundation trusts & national T&Cs- incremental pay progression
- sickness entitlements
- extending working day
- study leave expenses
- SPAs
Scotland
CEAs / Distinction / Discretionary points
Merit Awards reviewMerit Awards review
? ? ?? ? ?
Pensions
Pension time line
1948 NHS Pension scheme starts
1991 Scheme opened to part time staff
1995 Early retirement changes
2008 New Scheme Implemented
March 2010March 2010 Hutton ReviewHutton Review
- Increase normal retirement age
- Move from final salary to CARE (career average revalued earnings)
Pension time line
1948 NHS Pension scheme starts
1991 Scheme opened to part time staff
1995 Early retirement changes
2008 New Scheme Implemented
March 2010March 2010 Hutton ReviewHutton Review
April 2011April 2011 Switch from RPI to CPISwitch from RPI to CPI
Pension time line1948 NHS Pension scheme starts
1991 Scheme opened to part time staff
1995 Early retirement changes
2008 New Scheme Implementedted
March 2010March 2010 Hutton ReviewHutton Review
April 2011April 2011 Switch from RPI to CPISwitch from RPI to CPI
July2011July2011 ‘Consultation’ starts on‘Consultation’ starts on
proposed increases to contributionsproposed increases to contributions
Where we are:Where we are:
The Government announced in 2010’s Spending Review to produce £2.8bn savings per year by 2014/15 through increasing public service employee pension contributions
Proposed increases in Proposed increases in contribution ratescontribution rates
Full Time Equivalent
Pensionable Pay
Contribution rate (before tax relief)
2011/12
Contribution rate (before tax relief)
2012/13
Contribution rate increase
in 2012 /13
Up to £15 000 5.0% 5.0% 0%
£15001 - £21175 5.0% 5.60% 0.6%
£21176 - £26557 6.5% 7.14% 0.6%
£26558 - £48982 6.5% 7.69% 1.2%
£48983 - £69931 6.5% 8.48% 2.0%
£69932 - £110273 7.5% 9.85% 2.3%
Over £110273 8.5% 10.90% 2.4%
Contribution rates
Full time 2010/11 Pay Additional Cost (£ / month)
£10 000 0
£15 000 0
£20 000 8
£25 000 10
£30 000 25
£40 000 33
£60 000 60
£80 000 93
£130 000 152
Example
25 yr old F2 doctor in 2008 Pension scheme
‘typical’ career pathway with no breaks,
retiring at 60: pays in £179 639 more to get a pension £26 089 less per year;
retiring at 68: pays in £233 303 more to get a pension £34 491
Example
45 yr old consultant in 1995 Pension scheme
‘typical’ career pathway with no breaks,
retiring at 65: pays in £118 197 more to get a pension £7432 less per year
Private pension?
• Instead of is unlikely to be as good as NHS pension even with the changes
• In addition to the NHS pension scheme: limited by new restrictions on annual and lifetime tax allowances on pension savings
Pensions: Negotiations?Pensions: Negotiations?
- Large increases in contributions for consultants (£6-7K / yr before tax)
- Tax relief under threat
- Taxation of pensions
Pay more in for longer Pay more in for longer
to get less backto get less back
[email protected]@dh.gsi.gov.uk
Questions for you