Drs' payrise should be funded by cutting 23.7% govt pension contribution

[eyeses]

The Telegraph today suggests that the Government could fund a significant payrise to Resident Doctors by reducing our surprisingly high payments into their pensions.

"Yet what is often forgotten is that these doctors enjoy bumper pensions worth close to 75pc of their salaries in retirement – and which are guaranteed to rise with inflation each year.
Doctors enjoy index-linked, taxpayer-funded “defined benefit” schemes, many of which pay a proportion of the recipient’s final salary from the day they retire.
Under the NHS scheme, staff contribute between 5.2pc and 12.5pc of their salaries while the state contributes a vast 23.7pc each year.
By comparison, private sector workers, who are almost all enrolled in “defined contribution” pensions where the value of the final pot depends on investment performance, receive a contribution of just 3pc from their employer.
The NHS is paying out nearly £1bn a month in staff pensions, with almost 2,000 staff receiving pensions of more than £100,000 annually – a figure that has more than doubled in a year."

AIBU - No, junior Drs deserve that we fund a big pay rise and huge pension
IANBU - We pay far too much into Dr's pensions and they want the money now

What Resident Doctors don't want you to know about their pay

Avg nhs consultant pay 110k to 140k, average accountancy partner pay 400k to 800k (big 4) smaller firms - tax partner 100k to 150k.

Very selective summary.

1. DH is a consultant and earns £180k, plus roughly half as much again from private practice income.
2. Big 4 remuneration will be higher than anywhere else, for obvious reasons. NQ accountants are paid less than NQ doctors even at PWC, and nobody in the Big 4 is getting overtime, but that obviously doesn't suit your narrative.
3. Partners - whether Big 4 or otherwise - do not receive "pay" at all - they own a share of the business and are paid profits, which vary massively and are in decline. And if the business goes belly up, they might well lose their house. I can't see the sweaty kids on the picket line today willingly swallowing that kind of risk.
4. A "tax partner in a smaller firm" is oblique enough to be meaningless, but tax accountants tend to be paid slightly more because they can be highly specialised.
5. The average accountant salary in the UK is apparently about £40k.

One of the problems is that all doctors take the salary (or profit share, without appreciating the difference) at the very top of any chosen profession and decide, based on very little evidence, to make that the comparator to their own salary. It happens all the time with DH's colleagues and my own profession (law) - they point to city partners with drawings of £3 million pa and assume that they - unlike 99% of that partner's actual cohort - would have the skills, luck, resilience, lack of interest in work-life balance and understanding spouse, to make it. For every law firm partner earning megabucks, there are probably 100 ordinary solicitors earning £50 to 60k.

One of the (many) problems with NHS remuneration is that you pay everyone at a certain level the same, even if - as is sometimes the case - they are doing the absolute bare minimum or failing to meet expectations. It is absolutely barking to expect the public sector to match top professional services salaries in a competitive market.

? In the UK doctors wages are set by what the NHS thinks is suitable. Take them or leave them. Luckily there’s no shortage of people willing to work for the wages. Other countries have totally different healthcare funding systems, can afford to pay doctors more and do so. If you want to be paid similarly I suggest you go overseas. They have more funds to pay you more. But expecting a hefty pay rise from the UK state when the government has no incentive it increase that money and it could be better spent increasing doctors headcount is just daft.

Partners - whether Big 4 or otherwise - do not receive "pay" at all - they own a share of the business and are paid profits, which vary massively and are in decline. And if the business goes belly up, they might well lose their house. I can't see the sweaty kids on the picket line today willingly swallowing that kind of risk

Absolutely not true of the Big 4 (not sure about the otherwise, but if you mean accountancy practices generally usually also not) - they are all limited liability partnerships, no risk of being liable for losses of the LLP.

Edited to add - I've just seen you work in law where the normal model is also LLP, how can you not know this?

Partners in a LLP still own a share of the business and receive profits (not salary).
Big 4 will be LLP, but I am not sure that is universal in accountancy practice and suspect the traditional model prevails in smaller partnerships.
Not all partners in a LLP have limited liability - I was a partner in one until 2016. You still have to invest capital (and the amount of that capital is still at risk).

I am sure you would would be thrilled if this happened to you. Punish those who have stayed

The comment was about all publice sector roles, salaries, pensions. Where wages are much lower than the private sector. Do keep up, you're letting your bias against doctors cloud your comments

@sleepwouldbenice They are not universally much lower! Teachers aren’t much different. CEOs in LAs get around £250,000 plus. Heads of services and salaries above £100,000 have to be reported at LAs and there’s plenty of them. It’s also true that many LA workers would not put the hours in that are required in the private sector or be held to account by different pay systems with no automatic enhancement every year. Don’t get into pensions either. Often state ones far exceed others. Yes, doctors can enhance their salaries and work part time for nhs but others don’t get this luxury!

Helps to read what i said, rather than just launching into a rant.

I said at consultant level and also bought in what a partner at a smaller firm could be earning.

Most resident Docs will not go on to become consultants

Do you save people lives? no, doubtless advise on business/tax/law etc but all pretty pointless, as shown during the Pandemic, few said we need an accountant in 2020.

Your "skills" and i use that term loosely, in no way have the impact on peoples lives that a Consultant/Surgeon/Doctor will have, yet you earn more but at the same time want to keep Doctors in their place.

Do you think you should get paid more because you ‘save peoples lives’. What nonsense. You ‘save peoples lives’ because that’s what you’ve been trained to do. are you going to stop saving peoples lives because you’re not being paid enough? I thought that’s the sort of person interviews for medical school were supposed to weed out.

I do my professional services role because that’s what I’ve been paid to do. You may think what I do is pointless (and to some extent I agree) but my employer needs by law someone to do my role, it’s pretty niche, not many people do it and the pay is set accordingly. Supply and demand sets my worth.

I don’t want to ‘put doctors in their place’ at all. I’m really angry at this strike because I have lots of junior doctor friends facing unemployment and the BMA COULD have taken this opportunity to hold the government’s feet to the fire on this, but instead they threw pay whining into the mix and obviously the government rightly told them to get lost. Who runs the BMA? So they have any clue how the public view doctors harping on about pay? There are vital issues in doctor recruitment/ working conditions and training places that they could have made progress on but instead they insisted on throwing pay into the mix and ruin everything.

Your "smaller firm" comparison was a tax specialist (i.e. selectively highly paid accountant). Just as most residents won't make consultants, most accountants won't make partner, in which case they will be earning c £40k. That is about the same as a NQ doctor with zero experience (and a stonking pension).

I take your point about the relative usefulness of skills, but as a fee earner I was typically paid 30 to 40% of what I billed for the firm. This at least gives a financial measure of performance (and had I stopped billing at this level, I would have been unceremoniously dumped by the firm). If we have a state funded health system (and I am huge critic of state monopolies), then it's unavoidable that doctors don't get paid at levels beyond the dreams of avarice, just as its incumbent on patients to accept a pretty dire level of service most of the time.

Yeah a large percentage of the Nhs/public sector workforce are not on high wages. Teaching assistant’s, HCAS, admin, support workers, domestics etc. Even earlyresident doctors are only on around £19 an hour, they don’t earn the better wages like consultants for many years. They also come into it with much debt and now the jobs aren’t even there.

According to many in mumsnet my band 4, 20 year career wage of 30k would be low paid. I’m pretty sure those salary sacrificing their high wages in pensions to avoid paying taxi will get more than i could ever dream of

So we don’t honestly think i’m coming out with someone kind of millionaire pension?? I was on an even lower wage before. Im lucky i can take the 95 section at 60 but i was lower paid and it’s only so many years of work before the tories changed the pension in 2015. Although thanks to the judgment i can now extend that to 2022.

The sick pay, pension and annual leave has what’s kept me in the nhs. It’s already hard enough. We are already having staff leaving all over and not being replaced.

I agree with this. The striking junior doctors are bringing the profession into disrepute imo.

Yes, this is interesting. DH in the private sector has never had a pay rise lower than mine. Usually it’s been much better. He also gets over 30 days leave. I get 35 in HE. The difference is that I have to work quite a few of mine because if I don’t produce research ‘outputs’ I would never have been promoted. DH never works when he’s on leave.

Add to that the annual bonus, private health and staff discount, and not a bad pension , and his total remuneration package wipes the floor with mine. My pension does not close the gap.

And while we are at it, I was shocked by the number of discounts that are available under a Blue Lights card. Holidays, theatres, clothes, food., etc. Yes, I am jealous. No we don't all get bonuses in the private sector, especially when you are self employed.

It's probably already been mentioned but the 23% employer contribution isn't going into a pot like in a defined contribution scheme. The 3% that the Telegraph quotes as private sector contributions is the minimum. Many firms pay more.

Back of an envelope calculation comparing Teachers' pensions (no fund, just paid out of taxes etc) and Local Government pensions (defined benefit but with underlying mutual funds) suggests a reasonable comparison figure for employer contributions to be around 16%. (I.e. thats what the employer would need to contribute to get the same promised pensions for members) Still very generous but not insanely more than a lot of professional jobs. (This requires employee contributions of over 11%). I'm assuming NHS pensions aren't fantastically different to teachers' pensions.

One of the unions made the point that swapping to a defined contribution or at least a funded pension would in the first few years cost a huge amount of money to pay the pensions promised so far.

The cost to the public sector of providing to workers an unfunded defined benefit pension scheme is twofold. It’s the cost of the contributions but also - more importantly - it’s the cost of taking on the risk of guaranteeing paying future pensioners a set income regardless of the economic position the UK faces.

I agree that in the short term the state swapping to DC pensions would be costly - the DC contributions would go to the workers pension and there would be no contributions paid to the state that it could use to pay the current pensioners - but if really has to be done.

That is very normal for all DB schemes and is taken into account already when comparing the "value" of the pension to a DC pension. A comparison would be if you used your DC pension pot to buy an annuity - if you die early vs the statistical norm this would result in you "losing" value. A £20k a year inflation linked annuity costs about £450k to buy for an equivalent (and if you die early you lose the income).

The cost of the state pension is also discussed in terms of future unaffordability. For similar reasons.

Am now retired and I've seen the value of teachers' pension being virtually halved (retirement date pushed back from 60 to 67 or 68 for new entrants and accrual rate less generous) as well as employers contributions rising from 6% to over 11% for more senior teachers. All this without any of the savings shared through salary. So I'd be obviously wary if I were still working about future "reforms".

And I'd also hope that employer contributions weren't cut to 3%

That should have been "employee's contributions" rising.

I don’t recall saying that the NHS is a cushy number but the point of public service is offering a public service to earn a salary and ultimately the pension.
In the private sector it’s more likely to be a zero hours contract, a 45 hour week (or more) and a private pension that dwindles to virtually nothing due to the low wages paid and management fees charged.

You're cherry picking roles. Of course they are.
And its definitely the case for all the professions that can be found in both public and private sectors, ( eg hr, finance, even say engineering, legal) even with this mega pension

I find this type of attitude strange. If you think a sector or profession has an unfair advantage, go and do that job

You are really coming across as obsessed about this

It’s definitely not true of public sector law jobs. The salaries are good - comparable to in-house roles, but with better hours and pensions.

Not every solicitor outside the public sector is a fee earner bringing home megabucks - the vast majority earn comfortably less than a NHS doctor with comparable PQE.