Health service pension scheme discussions reach ‘critical point’

Negotiations about the NHS pension scheme between employers and unions have reached a “critical point”, according to leading players.

Speaking at the 2006 ‘HR in the NHS’ conference last week in Birmingham, Tim Sands, pension review project manager at NHS Employers, said talks were making progress, but slowly. “Negotiations have reached a critical point and we are now talking about certain things we don’t agree on,” he said.

The issues include the affordability and the type of pension offered to new staff. Employers favour a career average scheme, where the pension is based on average salary over an individual’s entire career, while the unions are pushing to retain a final-salary scheme.

“Both employers and staff-side representatives are conscious that there must be an agreement that sticks and lasts in the future,” Sands said.

Eddie Saville, staff-side chairman, admitted there was “a lot of blue water” between what staff wanted and what was on offer.

The clock is ticking, as elements of the existing scheme will be affected by forthcoming age discrimination legislation. The type of benefits available and the age thresholds that apply will be regarded as discriminatory, Sands warned.

Currently, someone made redundant at the age of 50 gets a vastly superior deal to that offered to someone made redundant at 49.

“We are asking whether these thresholds are something we can objectively justify. We believe we will have to introduce something different,” Sands said.

Any changes will need to go through a three-month consultation, so an agreement will be needed by June to prepare NHS organisations in time for age discrimination laws in October.

Keep up to date with all the latest pensions developments in the new dedicated area of our website at

Comments are closed.