• Pensions Regulator rules East and North Hertfordshire Trust’s new opt-out pension scheme as legal
  • Despite criticising a similar scheme earlier this year, NHS Pension Board says trust is “entitled to engage its staff” on “alternative employment” offers
  • Trust says the scheme appears “successful” and is considering extending offer

An NHS trust’s controversial pension scheme has been ruled as legal by regulators, the trust said.

The Pensions Regulator has written to East and North Hertfordshire Trust to confirm its scheme, which launched in September and allows nurses to receive enhanced pay if they opt out of the NHS pension, is “not in breach of regulations”, the trust told HSJ.

In the spring, Oxleas Foundation Trust decided to drop a pilot of a similar scheme. Its legality had been questioned by the NHS Pensions Board, which referred it to the Pensions Regulator. However, according to Oxleas, the Pensions Regulator then deemed the scheme as legal. That scheme had also been called into question by the pensions minister at the time, Ros Altmann.

The NHS Pensions Board has not intervened in the ENHT case. A spokesperson for the organisation told HSJ it was “inappropriate” for the board or the Department of Health “to comment on the legality of the trust’s offer for their staff”. He said: “As an employer, the trust is entitled to engage its staff on such offers, for example, to address recruitment and retention issues.”

A Pensions Regulator spokeswoman said: “We do not comment on individual employers.” However, it has previously told HSJ that an employer would only be found in breach of guidance around inducement “where the sole or main purpose is to induce workers to leave the pension scheme”.

East and North Herts’ pension scheme involves a 12.5 per cent salary rise for new joiners opting out of the NHS pension, and a 7.5 per cent increase if staff choose to join a lower cost National Employment Savings Trust pension scheme. While aimed at new band five and six nurses to entice them away from often higher paying agency work, where nurses do not have to pay into a pension scheme, the trust has had to offer the pension to the same group of internal staff to ensure equal pay.

The trust is still considering whether to extend the offer beyond its initial six month pilot period, which ends in March.

Thomas Simons, workforce and organisational development director at the trust, said: “As promised when the scheme was launched, it will be reviewed over the coming months – which is when any decisions about its future will be taken. Although still early days, it looks like it is being successful in meeting one of its primary aims – namely in attracting nursing staff from agencies back in to the NHS.”

Updated on 30 November and 1 December to clarify the position of the NHS Pensions Board, and Pensions Regulator, in relation to Oxleas Foundation Trust.