Press release: NHS Confederation to lead modernisation review of NHS pension scheme

30 Apr 2003

The NHS Confederation have been invited by the Department of Health to lead on behalf of NHS employers, in conjunction with the Department of Health, the NHS Pensions Agency and the National Assembly for Wales, a modernisation review of the NHS Pension Scheme.

The review will take as its starting point the recent pension scheme modernisation report "Pension Scheme Modernisation: A Millennium Health Check for the NHS Pension Scheme". It will also take into account the recommendations of the recent green paper on pensions, the proposed changes to the pensions tax regime announced by the Inland Revenue and equality issues, particularly in relation to survivor benefits for unmarried partners.

Gill Morgan, the Chief Executive of the Confederation said:

"This is an important opportunity for the Confederation to lead the development of a new pension scheme, so that the NHS continues to offer high standards of security for staff, but in ways which better reflect modern lifestyles and working practices, and which will help the NHS recruit and retain the staff it needs in the 21st Century."

As a first step the Confederation is assembling a small project team to start preparing material for the review, including meeting the full range of stakeholders to gain an early understanding of views. Once the preparatory work is complete, a steering group including both management and trade union representatives will be formed to develop proposals for a new, modernised pension scheme. Project planning is at an early stage. But it is hoped the review will have proposals ready for consultation by the Autumn of 2004.

 

Notes for editors

1. The NHS Confederation is the membership body for the full range of NHS organisations across the UK.
2. The review will examine the scope for creation of a new, modernised NHS Pension Scheme. Amendments to the current scheme will continue to be made as necessary while the review proceeds, including the proposals for GP pensions arrangements under the new General Medical Services contract, if accepted by the profession.
3. While the review will be wide ranging, it will maintain the principle of a defined benefit scheme. (Defined benefit schemes are schemes where pensions are determined by scheme rules, such as the current rule which links pensions to final salary, rather than on the performance of individual investments in the scheme).
4. If a new scheme is agreed, members of the current pension scheme will have their accrued rights protected. They will also be given a right to transfer to any new, improved scheme subject to rules which will be agreed as part of the review
5. The NHS Pension Scheme is the largest employer pension scheme in the UK. It has more than one million members and over 400,000 pensioners. It provides a pension based on final salary for employed staff and a pension based on career averaged earnings for independent contractors
6. Membership of the scheme comprises employees of the NHS in England and Wales, General Medical Practitioners and their staff and General Dental Practitioners
7. The NHS Pension Scheme is a statutory scheme and was introduced in 1948 under the National Health Service Act of 1946. The Scheme underwent some restructuring in 1995 which introduced more choice and flexibility with benefit improvement financed by withdrawing special early retirement rights for new entrants (the right to retire from age 55 with an unreduced pension)
   

Contact details

1. Contact Media Relations Manager Joanna Clason on 020 7074 3306 or 07798 571078 or Senior Media Officer Amy Darlington on 020 7074 3304 or 07767 770309. For out of hours media enquiries, please call the Duty Press Officer on 07880 500726.
   

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