- Part of:
- Health and social care
Action on pensions to maintain services.
New pension measures to help NHS Scotland retain highly experienced staff have been announced.
From 1 December 2019, an interim policy will give eligible NHS staff the option to get their employer pension contributions paid to them as part of their basic pay.
As a result of UK Government pension rules, highly experienced staff can face additional tax liabilities. This has led to some staff deciding to reduce their hours or retire early.
This new temporary policy will provide eligible staff with an alternative option to restricting their hours in order to reduce financial penalties and will ensure crucial services are maintained as demand on the health service continues to increase. It will run until the end of the current financial year, 31 March 2020.
Health Secretary Jeane Freeman said:
“Our hard-working staff should not face a financial penalty for working to provide vital services for patients, and I have repeatedly called for action from the UK Government on this as this matter is reserved.
“Our staff are valued and they should be supported and able to work for our NHS and its patients for as long as they wish. This is just one of the steps we are taking to ensure we retain and build a sustainable medical workforce.
“This will make a significant contribution to supporting frontline services and medical specialities who are working round the clock to deliver the highest possible quality of care.
“This new option will also help to support recruitment and retention of staff, encouraging health professionals to build their careers here in Scotland’s NHS.”
The interim scheme will be available to all staff who can evidence that they are likely to breach the Annual Allowance (AA) in the 2019/20 financial year and generate a tax charge as a result.
The rules regarding pension taxation are wholly reserved to the UK Government and any changes to the NHS pension scheme require the consent of HM Treasury.
The interim policy will operate while we await the outcome of the current UK Government consultation into further pension flexibilities and the outcome of HM Treasury’s review of the impact of the Annual Allowance taper on public sector pension schemes.
The policy will provide eligible staff the option to withdraw from the NHS Pension Scheme and receive their employer contributions back as a basic pay enhancement.
Eligible staff who apply and are accepted will be paid in lieu of pension contributions and will pay tax and national insurance on this payment.
No new investment is required for this temporary policy as employers are already funded for the pension contributions they make to staff.