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Press release: NHS Employers and NHS trade unions launch joint proposals for managing sickness absence and ill health retirement in the NHS

22 Oct 2007

NHS Employers and the NHS trade unions, through the NHS Staff Council, have today jointly launched a three-month consultation on proposals to manage an integrated approach for staff sickness absence and ill health retirement in the NHS.

The proposals are the result of an 18-month partnership review.

NHS Employers ill health review project manager Jeremy Orr said:

"These proposals are a good deal for NHS staff, NHS employers and tax payers as they mitigate the risk of unnecessary and premature ill health retirements.

"Whilst the NHS has already been seeing a year-on-year reduction in sickness absence, we think the key is to manage sickness absence even more effectively in the NHS, which in turn will reduce future cost pressures on the NHS Pension Scheme.

"What we are proposing to do is to raise significantly the standards required to manage long-term sickness in the NHS and to ensure there is a clear link to the costs of ill health retirement, to encourage good practice and prevent extra contributions costs to pension scheme members and NHS employers."

Richard Parker, Staff Side Chair for the review, said:

"We believe there is a lot more that employers could be doing to support their staff return to work after a period of sickness, including offering early interventions such as physiotherapy, alternative options such as a phased return to work or redeployment to another role and holding automatic return-to-work interviews.

"Many staff would prefer the option to keep working. This is about preventing staff sickness and injury and supporting staff to continue working, either part-time or by changing their role. We also want to ensure that staff can easily access appropriate benefits should they need to retire on ill health grounds."

The joint NHS trade union and NHS Employers' proposals include:

* The introduction of a two-tier payment system for ill health retirement benefit with those unlikely to ever work again due to ill health receiving greater benefits than those who have a reasonable prospect of finding alternative work
* New minimum standards for employers around managing sickness absence ensuring employers support staff who are off sick, offering them options including phased return, redeployment to another job and access to services such as physiotherapy and cognitive behavioural therapy
* Creating the right financial incentives for employers to help staff to stay in work by recharging them the cost of ill health retirements by their staff (currently borne by the NHS Pension Scheme)
* Ensuring there are clearly defined roles for line managers making them responsible for recognising health problems at an early stage and taking appropriate steps to minimise their impact, working closely with the staff member, HR, occupational health departments and senior managers.

A separate review has now been completed into the main NHS Pension Scheme but changes are necessary for ill health retirement due to the increase in the normal pension to age 65 resulting from that review. NHS Employers and the NHS trade unions are intending to hold a further consultation on the NHS Injury Benefit Scheme, which was set up to compensate staff injured while on duty, next year.

The staff sickness and ill health benefits consultation starts today and will end on 21 January 2008.  The responses will then be considered by the review partners before they make final recommendations to Ministers next year.

Notes for editors

* Further information on the consultation including the consultation document can be found at http://www.nhsemployers.org/pay-conditions/pay-conditions-502.cfm . The proposals affect NHS staff working in England and Wales
* Ill Health Retirement Benefit is part of the NHS Pension Scheme and is paid out depending upon how many years of service the individual has contributed into the NHS Pension Scheme
* Under the current system, staff receive the same benefit regardless of whether or not they are likely to find alternative work. If they retire on grounds of ill health, they are entitled to additional years of service, (e.g. their years of service are doubled if they have worked in the NHS for between five and 10 years, and increased to 20 years if they have worked for more than 10 years or increased by 6.66 years, whichever is greater).
* Under the proposals, staff retiring under tier 1 (those permanently unable to do their own job) would receive a pension based on the number of years they had actually contributed to the scheme (but it would not be reduced for taking their pension earlier than the normal pension age). Those retiring under tier 2 (staff permanently unable to do any job), would receive a pension based upon the number of years they had contributed to the scheme, plus a two-thirds prospective service enhancement of those years until normal retirement age.
* For example, if someone with a normal pension age of 60 retires on ill health grounds at the age of 45 after contributing to the NHS Pension Scheme for 10 years, their benefit would be based on 10 years' service for tier 1 and 20 years for tier 2 (10 plus two thirds of 15 (number of years left until normal pensionable age). The number of years is then used to calculate the pension, e.g. 10/80ths of the final salary plus a one off lump sum of three times the annual pension (tier 1) or 20/80ths of the final salary plus a one off lump sum of three times the annual pension (tier 2).
* The latest comparable figures from The Information Centre for Health and Social Care show that the national sickness absence level for the NHS in 2005 was 4.5%.

Contact details

The press office provides a comprehensive service to keep journalists informed about the work of NHS Employers.

If you have a media enquiry, please contact the press office team:

• Gemma Jeffcoate
  0207 074 3308 or gemma.jeffcoate@nhsemployers.org
• Emma Stafford
  0207 074 3307 or emma.stafford@nhsemployers.org

For out of hours media enquiries, please contact the duty press officer on 07880 500726.

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