from a bma perspective pay and pensions from a bma perspective dr cait searl consultant...

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

nhspensioncontributions@dh.gsi.gov.uknhspensioncontributions@dh.gsi.gov.uk

Questions for you