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Building a Pension

Building a Pension. London 16 th June 2004. Question 1. Flexible mortgage – different terms for different things 30 years to be a target if 60ths scheme. What about those in excess of 30 years – a bonus? Highest 30 of 40 years should be considered Getting your hands on it after 30 years.

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Building a Pension

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  1. Building a Pension London 16th June 2004

  2. Question 1 • Flexible mortgage – different terms for different things • 30 years to be a target if 60ths scheme. What about those in excess of 30 years – a bonus? • Highest 30 of 40 years should be considered • Getting your hands on it after 30 years

  3. Question 1 • Flexibility on IWL, stepping down etc – let people decide amounts to pay in • Pension scheme which offers “core years” with bonus for excess years – no detriment for those that work longer • People do currently ask how many years they need to work to get a full pension • Remove ceiling of years of scheme membership (45 years) • New approach to AVCs – more flexibility • People to pay full time rate when working part time

  4. Question 2 • Choice at retirement important but need to look at who you are and what you want from your pension • Annual benefit statement to show difference in benefits of 80ths and 60ths • Allow up to 25% commutation • Employees to decide how much they want to commute • Flexibility on AVCx • People assume 80ths scheme worse than 60ths – perception could help R&R

  5. Question 2 • Lump sum 0 – 25% • General agreement to allow up to 25% commutation • Some support for increased accrual rate

  6. Question 3 • Career average should be considered but need to see modelling • Hard to understand by pensions people so v hard for employees • Annual benefit statements… • Issue to extra cost to employers if overtime pensionable • Final salary encourages people to work for longer in NHS

  7. Question 3 • Could we have choice of career average and final salary scheme? • Communications v important for scheme members – statement would be a start (acknowledged by NHSPA as priority for SpHA) • Bank staff – may well be beneficial career average scheme

  8. Question 3 • Choice most important but need to know more – could those with career progression have choice to retain FS scheme • Improved accrual rate beneficial to some but main issue is choice and communication • Some groups would do well with FS scheme – do some groups do too well? • What will happen to existing scheme members?

  9. Question4 • Where do we draw boundaries? Could this weaken scheme (ie: staff at private hospitals, agency staff who have chosen to leave NHS) • Voluntary and supply organisations should be able to join • Should be quite restrictive • Should cost for widening scheme be met by NHS ie: PFI • How to deal with differences in salaries between NHS and outside companies • Principle of scheme is that it is there for NHS – could be attractive recruitment tool for organisations outside of NHS

  10. Question 4 • Any private employer should undertake to pay full costs – not just employer costs – ensure no costs come back to the NHS • Not dilute marketablility of NHS • Expand scheme any more and there would be lack of clarity – keep as is for Directions arrangments • How to deal with staff who have been contracted to work outside of NHS ie: PFI. Does TUPE cover this enough? • Difference between voluntary staff and those transferred out

  11. Question 5 • Career break need to be fair – individual could have choice to pay in their contributions on return and employer could pay in their contributions after employee been back in employment for say 2 years • How would career break be affected in career average scheme • Employer should not be making up employee contributions • The scheme should not bear the cost

  12. Question 5 • Contributions should relate to period of break • No to BOGOF year • Those with long service should have enhancements • Have sliding scale for employee to make contributions over career break ie: if they came back within 12 months employer would make all contributions • Employer could make AVC contributions on behalf of employee

  13. Surprised that career break is seen as high priority – ill health should be higher esp. for ambulance staff • Low instance of staff taking career breaks • Career breaks taken for lots of different reasons – ie: travel vs caring responsibilities • Unpaid sick leave vs lifestyle choice which is voluntary break. Should the latter be supported by scheme?

  14. Career break not a high priority

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