GP pensions were facing death by a thousand cuts even before proposals to raise the retirement age, says Dr Jeremy Poland, and it's time to take a stand
The recent proposal to raise the retirement age is an attack on our pensions and our remuneration in general. But it is only part of the problem. We certainly need to oppose any suggestion that our retirement age should be raised, but we also need to look around and realise that our pensions income is already being nibbled away in other areas.
The tabloids have been baying for the blood of all those fat cat public employees on final-salary schemes and there has been a call to reduce the pension bill. But how should it be done?
There have been calls to use career-average earnings rather than final salaries and for employees to pay more. Hang on a minute, though, GPs already have a career-average scheme and many of us have also had to increase our pension contributions following a recent review. We are now about to be hit hard again, even though over 20% of our income is already being paid to the Government for our pensions.
The Government is planning to increase our pension by the consumer price index of inflation, not the retail price index as we were promised. We should really fight this one, as the RPI rate of increase was specified in our existing scheme and should be maintained.
It might seem pedantic, but RPI is currently 4.8% and CPI only 3.7%. If CPI is used to factor in inflation rather than RPI from now on, the pension of someone starting out in general practice could potentially be halved over the course of a career and retirement. At the very least, all contributions made to date must be ringfenced and increased in line with RPI.
In addition, following BMA capitulation we now have to pay part of our employers' contribution as well as our employees' contribution. The Government was sneaky in supposedly factoring the employers' part into our pay rise following the last contract renegotiations, only to take it straight back.
Notional rent became pensionable pay after our pay review, but wasn't a pay rise as we received it anyway. It has artificially been allowed to increase our pensionable pay in the accounts by simply moving it from one pot to another.
By the way, we have to pay the employers' and employees' pension contributions on that money as it immediately became additional pensionable profit. Cheap pension? Not if you are personally paying the employers' and employees' contribution yourself.
The Government argues that the NHS scheme can't continue in its current form as it is unfunded, so there is no pot of money accumulating to pay future pensions. However, the only reason there isn't a pot of money is because the Government treats our contributions as tax revenue and keeps spending them on something else. That's not our fault.
It may be that politically we have to accept a compromise on some of these issues individually, but if we have to pay more contributions, retire later and accept CPI inflation increases we are being shafted on all fronts.
If we pay considerably more for the same or a smaller pension, this effectively becomes another tax increase.
We will have to wait and see how things pan out and I will continue taking my tablets. If we need to take a stand over any of these issues, we could, as a last resort, stop doing Part 2 cremation forms.
Our patients would be unaffected but the situation would soon become intolerable. My concern is that no one issue is in itself worth taking action over, but the overall effect of multiple cuts in income and increases in our outgoings will be devastating for the profession.
Dr Jeremy Poland is a GP in Bristol
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