Government seeks comments on career average pension scheme for NHS

A three-month consultation on the new NHS pension scheme for England and Wales starts today.

As part of the proposals, the Government plans to scrap final salary schemes for more than one million staff and replace them with career average salary pensions.

The announcement follows moves last year to curb retirement benefits for about 600,000 civil servants across the public sector.

Review sponsor and chair David Jordison said: “Our aim had always been to ensure the NHS Pension Scheme meets the needs of a modern NHS and its staff, by making benefits more appropriate for today’s workforce.”

The proposed new scheme will provide a higher accrual rate but with benefits paid at 65. Staff will be able to choose the size of lump sum they take up to 25 per cent of the value of their pension.

Retirement will no longer be a one-off event but instead staff will be able to take their pension and continue to work. If staff chose to work after 65 their pension will be enhanced. Unmarried partners will receive the same survivor benefits as married or civil partnerships.

Existing staff will be offered the opportunity to transfer into the new scheme and access all the improved benefits, or stay in the existing scheme and access a more limited package of improvements.

The Government is also proposing to increase from 60 years to 65 years the age at which a pension can be taken without the income being reduced.

Eddie Saville, of the Society for Chiropodists and Podiatrists and staff side chair, said: “The trade unions welcome many of the proposals in the consultation document and recognise that these would represent real improvements. However, we have not agreed on all issues, in particular the proposed increase in normal pension age.”

Dr Andrew Dearden, chairman of the BMA Pensions Committee, said: “This is a fundamental change to doctors’ terms and conditions of employment. We want to hear views from all doctors, but particularly from those under age 50 who will be most affected by these proposals.”

Scotland and Northern Ireland are also reviewing their schemes and are expected to release their consultation documents before the end of January.

 

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