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Lansley attacks ‘unrealistic’ NHS pension reforms

The health secretary has launched an unprecedented attack on the Government's plans to reform public sector pensions, saying plans to make NHS workers pay more into their pension pot are ‘unrealistic' and will result in GPs deserting the NHS Pension Scheme in droves.

The claim – leaked to the Daily Telegraph newspaper – was contained in a letter to the chief secretary to the Treasury Danny Alexander and lays bare a Cabinet rift over pensions reform.

In the five-page letter Mr Lansley warns the reforms – that could see GPs working longer and paying up to six percentage points more in contributions - fail to meet the coalition's ‘commitment to maintain gold standard pensions'.

The letter also reveals the health secretary's fears that planned hikes in employer and employee contributions will prompt GPs to turn their backs on NHS pension schemes in favour of private alternatives.

He says: ‘In the NHS if it appears that we intend to significantly reduce the value of future accrual we also face the risk of opt out from higher paid groups as well as the lower paid.'

'GPs for instance pay both employer and employee contributions and can choose to invest them elsewhere or take them as pay. This would create a significant fiscal pressure in the short to medium term.'

In the letter, Mr Lansley also says proposals to force public-sector workers to retire later are ‘unrealistic' and unfair to NHS workers.

‘In the NHS currently, the average full time career for those taking a pension is only 18 years and it seems unrealistic to suggest that pension scheme design should  be based on the assumption that a predominantly female workforce would need to work full time 48 year careers in future to receive a full pension. It is also difficult to see how this meets our commitment to meet gold standard pensions.'

Earlier this month The Treasury revealed that the total increase in pensions contributions for high earners – such as GPs – would be capped at six percentage points by 2014, before tax relief, with the hike phased in over three years.

Talks will be opened with a coalition of health service unions, including the BMA, on the future of the NHS pension at the end of this month.

Tomorrow Pulse will present a petition to Downing Street urging the Government to rethink its NHS pension reform plans – click here to add your name to the petition.