Pension reforms speed up public sector changes

Proposed changes to NHS pensions signal an acceleration of government moves to end final salary schemes in the public sector, according to experts.

Last week the NHS announced plans to switch to a career average earnings scheme and raise retirement age from 60 to 65 for health service workers.

If implemented, the changes would apply to new employees from 6 April 2006.

The moves follow plans unveiled last month detailing the reform of civil servant pensions.

Pensions experts from unions representing NHS workers have expressed scepticism about career average schemes, even though they tend to benefit lower-paid workers.

They argue the plans are a money saving measure and not about making the system fairer.

Orlando Harvey-Wood, a partner in the pensions practice at consultancy Deloitte, said the plans fell between the two.

“The Government is now reacting like companies in the private sector by moving away from final salary schemes.

“Raising the retirement age will make some savings, but the majority of workers won’t be worse off.”

Ministers are expected to make a final decision in the summer.


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