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RCM warns 8,000 midwives about pension opt out schemes

Thousands of newly qualified and student midwives have been urged to reject a ‘concerning’ move whereby employers offer a higher salary if the individual opts out of the NHS Pension Scheme.
Demonstration against pension opt out scheme

Thousands of newly-qualified and student midwives have been urged to reject a concerning move whereby employers in England offer a higher salary if the individual opts out of the NHS Pension Scheme.

The Royal College of Midwives (RCM) has written to 8,000 newly qualified midwives, student midwives and workplace representatives to advise them about the issue.

East and North Hertfordshire NHS Trust is the latest trust to offer the deal to new nursing and midwifery recruits.

The higher salary could amount to a 12.5% wage rise, because band 5 and 6 recruits will receive the pension contributions the trust would have made on their behalf as part of their salary, as well as retaining the contributions they would usually make themselves.

Opposition

Thousands of newly-qualified and student midwives have been urged to reject a ‘concerning’ move whereby employers in England offer a higher salary if the individual opts out of the NHS Pension Scheme.


Protestors against East and North Hertfordshire NHS Trust’s pension opt out scheme outside Lister Hospital in Stevenage last week

The Royal College of Midwives (RCM) has written to 8,000 newly qualified midwives, student midwives and workplace representatives to advise them about the issue.

East and North Hertfordshire NHS Trust is the latest trust to offer the deal to new nursing and midwifery recruits.

The higher salary could amount to a 12.5% wage rise, because band 5 and 6 recruits will receive the pension contributions the trust would have made on their behalf as part of their salary, as well as retaining the contributions they would usually make themselves. 

Opposition

Last week, the RCN and Unison staged a protest against the move, which is part of a wider NHS recruitment campaign.

Unison east of England head of health Tracey Lambert called the strategy morally wrong, while RCN general secretary Janet Davies said it was ‘asking people to neglect their futures’.

Legally, employers must automatically enrol eligible employees in a workplace pension scheme, and the agreement in the NHS is that all eligible employees should be enrolled in the NHS Pension Scheme. 

The Pensions Act does not allow for employers to attempt to induce their staff to opt out of joining a pension scheme.

The RCM has joined the opposition to the plans, and said it intends to inform the Pensions Regulator.

Gender inequality

RCM director for policy, employment relations and communications Jon Skewes said: ‘We are concerned that there will be a long-term financial impact on newly qualified midwives. Also, because the trust is making this offer to midwives and nurses who work in a predominately female profession, we are concerned this will widen the gender pensions gap.

‘If organisations are having difficulty with recruitment or retention they should pay a recruitment and retention premia. The offer of a higher salary in exchange for opting out of the pension scheme will not solve their recruitment issues.’

The plan by East and North Hertfordshire NHS Trust echoes a similar scheme proposed earlier this year by Oxleas NHS Foundation Trust, which covers London and Kent. The latter’s proposal was withdrawn following opposition from trade unions.

The East and North Hertfordshire scheme will be piloted for a year, starting on 1 January 2017. It is part of a recruitment campaign to reduce reliance on agency staff by offering flexible working patterns, different contract types and career progression.

Anyone wishing to take up the pension option would need to have taken independent financial advice on the matter.

Trust director of workforce Thomas Simons said: 'In developing the trust's latest nursing recruitment campaign, expert legal advice was sought and received.

'As a result, the trust believes that its actions are within the law. Should the Pensions Regulator wish to discuss the scheme with us, then we would be more than happy to provide any information requested.'


Further information

Protest against trust's plan to offer nurses higher salary to opt out of pension

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