Concerns about NHS cash for pensions offer

Concerns about NHS cash for pensions offer

The nurses’ union has raised concerns about its members taking up a cash-for-pensions offer without proper advice.

The Royal College of Nursing’s employment relations adviser said the news about one NHS trust offering newly-qualified nurses the choice of a higher salary if they opt out of the pension was concerning.

The concerns are about the pay deal offered by Oxleas NHS Foundation Trust in south east London.

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Nicola Lee, employment relations adviser at the RCN, said: “There are concerns about the impact on members of staff if they are not properly advised about the long-term consequences of opting out of a pension plan that provides both income in retirement and life assurance benefits.

“If a number of trusts were to follow suit, it would undermine the viability of the NHS pension scheme as well as Agenda for Change, the nationally agreed pay framework.”

The new pay offering is open to all band five nurses at Oxleas and will allow them the choice of taking either the standard pay scheme, or one that has an enhanced rate of pay, which means the nurse would not be a member of the NHS pension scheme.

The trust would instead be paying the nurse the money it would have paid into the NHS Pension Scheme on their behalf.

Steve Webb, former pensions minister and director of policy at Royal London, said the pay offer set a dangerous precedent.

He said: “The whole idea of automatic enrolment is that millions of people will benefit from saving in a pension and that this should be the default position.

“But this idea would be fatally undermined if employers start offering cash today on condition that workers opt out of their pension.

“Cash today is always likely to be more attractive than cash in retirement, but if this catches on, especially among younger workers, all of the progress made under automatic enrolment could be undermined.”

A spokesman for The Pensions Regulator stated that while it does not comment on individual employers, inducements are treated seriously and it investigate reports on a case by case basis.

“Our published guidance sets out our view of what constitutes inducement. The guidance specifies that an employer is in breach where their sole or main purpose is to induce workers to leave the pension scheme.

“Some cases may be less clear cut than others but in fact do not constitute inducement - for example, where employers offer a flexible benefits package and give staff a genuinely free and fair choice as to whether they choose to stay in a scheme or take alternative benefits.”

Oxleas NHS Foundation Trust has been asked to comment on their offer.