Proposed government changes to the NHS pension scheme will not be enough to avert a looming crisis in long-term public sector pension provision, according to the CBI.
Following three years of negotiations between employers and staff, the new proposals would retain a pension age of 60 for existing members of the scheme and retain a final salary pension for both existing and new staff. However, new joiners will have to work until 65 to claim their full pension entitlement.
A new contribution rate system will also be introduced, which will have lower contributions for the lowest paid and higher contribution rates for the highest paid. Employer contribution rates will be capped at current levels.
David Jordison, chair of the NHS Employers pensions negotiating team, said the proposals would be good for both staff and their employers.
However, CBI deputy director-general John Cridland said these modest changes would not prevent the NHS pensions bill rocketing for taxpayers.
“When the public sector pension deficit already stands at £960bn, keeping defined benefit schemes for new entrants, without meaningful reforms to keep them affordable, is simply adding to the difficulties that lie ahead,” he warned.
A three-month consultation period on the proposals will run from September until November.