The East and North Hertfordshire NHS Trust has been caught offering nurses a higher salary if they opt-out of their pension scheme.

Earlier this year, Oxleas NHS Foundation Trust was criticised for offering the deal, and subsequently retracted the offer.

The deal offers band five and six nurses the chance to receive a higher salary if they decide to opt-out of their pension scheme.

As a result, the Royal College of Nursing has written to members warning them not to take up the offer without taking financial advice. Instead it is calling on the trust and the whole NHS to pay nurses higher wages rather than “risk putting them in poverty in retirement by giving up their pensions”.

RCN eastern operational manager Teresa Budrey said: "This ill thought-out move asks people to neglect their future and will stop them from making retirement plans. It could put nurses into poverty when they retire and lead to an even greater reliance on state support.

"There are also potentially serious consequences for the long term viability of the NHS Pension Scheme. Making nurses bear the brunt of the government’s failure to properly fund the NHS is not fair and not sustainable."

In the letter to members, seen by Pensions Age, the RCN said: “If you’re not a member of the NHS Pension Scheme, you will keep your own employee contributions and receive a higher rate of pay than Agenda for Change rates. The higher rate also includes the value of the employer’s pension contribution, which is approximately 12 per cent. From today your employer, East and North Hertfordshire NHS Trust, is offering Band 5 and 6 nursing staff a higher rate of pay if you are not in the NHS Pension Scheme.

“We are concerned about this proposal and its potential impact on your long-term financial security. We are campaigning for the offer to be withdrawn and have written to the Trust management stating our opposition.”

Former pensions minister Ros Altmann has expressed her disappointment at the Trust for offering the deal as she said that when she was minister, she was assured that the NHS had stopped doing this and would no longer be enticing staff to leave the really good NHS pension scheme.

“It is disappointing to see that these assurances have not stood the test of time,” she said.

Commenting on the decision to offer the deal, East and North Hertfordshire NHS Trust director of workforce Thomas Simons said: “From research that we have undertaken, some nurses choose to work for agencies only as they believe that this gives them greater flexibility over how and when they work, as well as higher rates of pay. They also recognise, however, that their training and career progression opportunities can be much more limited.”

He defended the decision to offer the deal as he said people working for agencies do not have access to the NHS Pension Scheme and therefore they are piloting the offer.

“The impact for those taking up the option to opt out of the NHS Pension is the equivalent of around a 12.5 per cent rise in their salary – which goes a long way to eroding the perceived difference with agency pay rates. For staff choosing to join a NEST scheme, the uplift will be some 7.5 per cent. People are, of course, free to choose the NHS Pension scheme should they wish to, with staff opting out auto-enrolled back in every 12 months unless they chose actively otherwise.

“The Trust recognises the importance of people making provision for their retirement, which is why this is a pilot and not a permanent change. Anyone wishing to take up the pension option would need to have taken independent financial advice on the matter. Also their opting out of the NHS Pension scheme will last for one year, with people re-enrolled automatically in to the scheme unless they seek to opt out – and again show that they have taken the appropriate advice. Also staff who have opted out are free to join the NHS Pension scheme at any point in their 12-month opted out period.

“We have also been very sensitive to how this might be viewed, which is why we have undertaken an extensive briefing programme over the last few weeks. This has involved sharing our plans with our local, regional and national trade union partners representing nursing staff, MPs, NHS organisations locally and NHS Improvement. The initiative will be reviewed formally in a year’s time.”

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