The NHS pension scheme is to be amended so that staff do not face a take-home pay cut by being pushed up a contribution tier because of annual pay awards.
A Department of Health and Social Care consultation, launched last October, included proposals to increase the thresholds so that they were in line with Agenda for Change pay awards, with a further consultation on what those uplifts should be in light of this year’s pay award.
It said this would protect staff who may have seen a reduction in their take-home pay, due to small salary increases that push them up a tier.
This comes after NHS England warned the latest pay award would mean some senior staff – those in band 8a of Agenda for Change – would see a cash fall in their take-home pay this month, as their back pay would not be enough to cover their new pension contributions.
In a consultation response, published on Thursday, the government said pensionable earnings thresholds would be increased annually so they are in line with Agenda for Change awards in England, and confirmed the rates for this year. Under the new rates, those at the bottom of band 8a will contribute 10 per cent.
The final regulations will be laid before Parliament so the proposed changes are in place by 1 October 2022.
However, this year’s amended thresholds will not be backdated to April, meaning those paying a higher contribution now because of this year’s pay awards will continue to do so until October.
The consultation response added: “DHSC has consulted those who appear to be likely affected by the proposed changes to regulations with a view to reaching [an] agreement.
“Overall, where there was disagreement with the proposals, this was largely due to members expressing disagreement with previously consulted on policy [regarding pension contributions for higher earners and part-time staff], and not disagreement with the proposal to increase the pensionable earnings thresholds in the member contribution structure in line with the AfC award for England, which was the subject of this consultation.”