Public Service Pensions Bill

Memorandum submitted by the NHS Working Longer Review Group (PSP 22)

For information to the Committee: NHS Pension Scheme - Working Longer Review

1. The NHS Pension Scheme proposed Final Agreement includes the provision that in the new scheme, for pension accruals post 2015, Normal Pension Age should be set equal to State Pension Age. This will mean that each member will have an individual Normal Pension Age dependent on their date of birth. If there are further changes to State Pension Age, there will be an automatic link to change the Normal Pension Age of members of the NHS Pension Scheme by an equivalent amount in relation to the whole of their post 2015 service.

2. These changes may impact more on certain categories of staff within the NHS. As a result, it was agreed as part of the Heads of Agreement to set up a tripartite review between the Department of Health, NHS Employers and the NHS Trade Unions to address the impact of working longer in the NHS, with particular reference to staff in frontline and physically demanding roles including emergency services.

3. The outcome of this review will be recommendations to the Health Ministers including for example how employers can support an ageing workforce, the use of existing NHS pension scheme flexibilities and suggestions for how career pathways can be modified to improve health and well being for staff.

4. In order to ensure this review is robust, and results in effective recommendations, evidence will be gathered from a range of sources including academic literature, primary research from NHS staff and employers, NHS Pension scheme data and any other source that the review group members deem appropriate.

5. As joint Chairs of this review we write to inform you that the review commenced on the 28th September successfully and would like to request that we provide you with regular updates on our findings for information to your committee.

6. To provide you with further detail about this review we have attached the following documents for your reference:

· Annex C of the Proposed Final Agreement

· Terms of Reference

· List of members of the Review group

We hope this information is useful for you and our offer to provide you with regular updates is welcome.

November 2012

Annex C: Impact of working longer review group

TERMS OF REFERENCE

1. Context

The NHS Pension Scheme proposed Final Agreement includes the provision that in the new scheme, for pension accruals post-2015, Normal Pension Age should be set equal to State Pension Age. This will mean that each member will have an individual Normal Pension Age dependent on their date of birth. If there are further changes to State Pension Age, there will be an automatic link to change the Normal Pension Age of members of the NHS Pension Scheme by an equivalent amount in relation to the whole of their post 2015 service.

These changes may impact more on certain categories of staff within the NHS. As a result, it was agreed as part of the Heads of Agreement to set up a tripartite review between the Department of Health, NHS Employers and the NHS Trade Unions to address the impact of working longer in the NHS, with particular reference to staff in frontline and physically demanding roles including emergency services.

2. Purpose of this review

The main parameters of the proposed new scheme, as set out in the review partner’s Heads of Agreement (December 2011), include the Government’s proposal for the normal pension age to be equal to State Pension Age.

This review is focused on the implications of NHS staff working longer. This review will include gathering evidence, seeking views from relevant stakeholders assessing impact, and, if necessary consideration of available options to mitigate implications of an older workforce.

3. Governance

This review will be carried out in partnership with secretariat support provided by the NHS Employers organisation. The Review Group will provide:

• timely reports to the NHS Staff Council and the NHS Pensions Scheme Governance Group;

• make recommendations to the NHS Pension Scheme Governance Group and subsequently the NHS Staff Council, for consideration and ratification prior to submission to Health Ministers.

4. Group objectives

The objectives of the group are:

• Gather and examine current and emerging evidence to determine the impact of the whole workforce working to state pension age and any impact on the delivery of healthcare to patients and clients. This evidence should make comparison with UK wide population data and sector specific data;

• Highlight any equal pay/equality issues arising from the new scheme Explore the option for employer funded contribution rates to offset the cost of early retirement for any potential staff groups identified as suffering detriment from working longer with particular reference to staff in frontline and physically demanding roles including emergency services;

• Engagement of relevant partnership bodies e.g. National Ambulance Strategic Partnership Forum, POSHH etc;

• Examine the potential impact of an older workforce on ill-health retirement, scheme costs and sustainability;

• Make an assessment of the implications of working to state retirement age on the NHS workforce;

• Identify incentives for positive employer practices and behaviours which support the development of age diversity practices in the NHS;

• Consider what strategies employers will need to put in place to support the extension of working lives. This would include health and well being and new career pathways for staff;

• Identify any categories of worker for whom an increase in Normal Pension Age would be a particular challenge in respect of safe and effective service delivery and consider how this may be addressed;

• Identify any categories of worker for whom an increase in Normal Pension Age would be a particular challenge in respect of their health and wellbeing

• Determine the scope of pension scheme design flexibilities to support staff working to state retirement age and in particular to support flexible retirement;

• Consider links between scheme flexibilities and the concept of total reward as described in the NHS Employers organisation briefing Total Reward in the NHS. This briefing provides advice for employers on how to develop a total reward approach.

5. Group composition

It is proposed that the group composition is determined in discussion with the NHS Staff Council and its Executive. The scope of this review spans a number of work areas of the NHS Staff Council so the composition of the group may be better supported by the selection of management and staff side representatives from across the wider membership.

The secretariat for the review will be provided by the NHS Employers organisation.

6. Ways of working

It is proposed that:

• The group should commence meetings from March 2012;

• Meeting frequency should be reviewed following the completion of the Heads of Agreement;

• The group should meet either via teleconference or face to face where practical.

It is recommended that the impact of working longer should become a standing agenda item at future Scheme Specific Discussion meetings, enabling the review group to report back on progress and receive feedback from the wider group.

7. Key milestones/timescales

It is proposed that:

• Identify appropriate membership and scope initial work programme March/April 2012;

• Commission literature review/evidence gathering;

• Develop and agree assessment of impact an older workforce, identifying available options to mitigate implications as necessary;

• Review partner recommendations submitted to Department of Health by autumn 2012;

• Supporting products developed and implemented by March 2013;

• Support and monitor implementation, refining materials as necessary, in the run up to the introduction of the new pension arrangement in 2015

Prepared 21st November 2012