Employee pension contribution increases - we need your views


17 / 1 / 2014 9.49am

These increases are a Government requirement and form part of a three-year programme to deliver savings equivalent to an average increase of 3.2 per cent annually. The proposed increases will conclude the three-year programme.

As part of the Department of Health's consultation on the proposed contribution rates, we would like to hear your views on specific areas relating directly to employers, to inform our consultation response.

NHS Employers and staff side colleagues, through governance arrangements, have monitored the pension scheme opt-out levels since the proposed increases were introduced. There has not been any notable change in opt outs over the two-year period.

Some respondents have noted that they feel these increases could affect a member's ability to pay. We are interested in hearing your thoughts on this and have outlined the proposed cost per month to members as provided in the Department of Health consultation:

Proposed 2014-15 contributions after tax relief (net)

 Full-time pay

 2014/15 contribution rate

 Additional cost per month

£10,000  4 per cent  £0
£15,000  4 per cent  £0

 4.48 per cent

£25,000  5.68 per cent  £5
£30,000  7.44 per cent  £6
£40,000  7.44 per cent  £8
£60,000  7.5 per cent  £36
£80,000  8.1 per cent  £48
£130,000  8.7 per cent  £78

Employer contributions will remain at 14 per cent.

We would like to hear from employers on the following:

  • What is the perception from staff on the effect of the increases on their take home pay?
  • Do you have thoughts from members to suggest that these proposed increases will affect their standard of living?
  • Do you have evidence or intelligence which suggests that the increases have had an effect on staff recruitment or retention over the past two years?
  • Have you seen an uptake in pensions advice/queries following the increases?
  • How do you communicate these changes with your employees?
  • Any other impact?

To contribute, please send your thoughts to: pensions@nhsemployers.org, or to discuss further please call Stephanie Leary on 0113 306 3213.

We would like to hear from you no later than 5 February 2014.

The consultation will close on 10 February 2014.

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