Trust offers better pay in return for opting out of pension

The trust told HSJ’s stister title Nursing Times it devised the offer to try and recruit nurses to take up permanent posts who had previously left the NHS and gone into agency work.

The trust’s director of HR and organisational development, Simon Hart, said: “We have very specifically gone after people who have gone off to work for agencies – the logic being they’ve already walked away from the pension scheme for more money.”

Under the deal, all new and existing band 5 nurses can chose to receive an enhanced rate of pay that will mean they are not in the NHS pension scheme – earning them roughly £300 to £400 extra per month, depending on increments.

When combined with additional pay for unsocial hours, the enhanced rate will equal the pay offered by many agencies, according to the trust.

A recruitment drive aimed at band 5 mental health and general nurses, which promoted the new offer, was launched in January with the slogan “agencies don’t always pay more”.

Mr Hart said the south east London trust – which provides a range of services including mental health, prison health, community care and intermediate care – had struggled to recruit band 5s and currently had a nursing vacancy rate of 16-17 per cent.

In contrast, local agencies were successfully recruiting nurses, which trust managers put down to the better pay on offer.

Mr Hart said: “Staff say this is a really good place to work. We have good staff development – all of those things – and we’re not even getting a sniff. And then you look at the pay rates and you work out why.

“Our conversation was ‘how are we going to compete with agencies without breaking Agenda for Change and busting the bank’, so we have come up with this approach.”

Under the scheme, those who opt out of the NHS pension must take a conscious decision to keep opting out each year and staff can also change their mind at any time and opt back in.

A third option would see the trust enrol staff in the government’s National Employment Savings Trust pension scheme. They would also receive more pay, taking home the difference between the employer contribution the trust makes to NEST and the amount it would have paid into the NHS scheme.

They would not be automatically re-enrolled in the NHS pension each year but would be notified of the opportunity to join the scheme.

Since the deal was launched, 19 nurses already employed by the trust have taken up the offer and opted out of the NHS Pension. The deal has also been extended to a further 50 who had already chosen to opt out of the NHS pension scheme before the offer existed.

As part of recent recruitment efforts, the trust has made conditional offers to about 80 new nurses. Mr Hart said he did not know how many of those would choose the pension opt-out if they came to work for the trust but anticipated it would be “very few”.

He said it was too early to say whether the deal had attracted more applicants. However, he added: “We’ve had a much higher percentage of nurses who are not in the NHS applying than has hitherto been the case – probably 60 per cent of the applicants are non-NHS nurses.”

“That would imply we are potentially hitting a market that has otherwise ignored us,” he said.

It is against to law to “induce” staff to leave a pension scheme or encourage them not to join and Oxleas’ offer was referred to the Pensions Regulator. It told the trust to tweak some of its wording but went on to close the case.

However, the NHS Pensions Board, which has members from employers and unions, has asked the Pensions Regulator to investigate it again.

“The regulator says what we are doing is legitimate and legal,” said Mr Hart. “It costs the trust nothing to offer this and we gain nothing. Where we do gain is if it’s attracting people through the door to come back to the NHS.”

He said the trust might make some savings when it came to agency spend but maintained the main driver for the scheme was “quality of care”.

“Consistent staffing is better for staff, better for patients and carers, better for morale and better on so many levels,” he said. “If we have got substantive staff we know we get better care and better outcomes and that is the critical driver.”

He said nurses who opted out of the NHS Pension Scheme may have various reasons for doing do.

For some, that may be “to make ends meet”, others may be sceptical about whether the scheme would pay out down the line, or be overseas staff who wanted to maximise earnings because they were planning to return home at some point.

Mr Hart said the offer had been made with the agreement of local union representatives but those at national level have raised concerns.

Unison’s head of health, Christina McAnea, said: “Every worker deserves financial security in their retirement and staff shouldn’t be encouraged to put short-term gain ahead of their long term security.”

Nicola Lee, employment relations adviser at the Royal College of Nursing, added: “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.

“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.”