By Ian Quinn
GPs face increased pensions contributions and a retirement age raised to 68 under plans in a Government-backed review published today.
The report by Lord Hutton outlined plans to ‘rebalance’ the contributions made by members of the NHS Pension Scheme, with progressive increases in payments to support the pension benefits of ‘high flyers’ such as GPs.
Lord Hutton’s masterplan confirms an exclusive report by Pulse in January which revealed how officials from Department of Health had already begun negotiations with the BMA over a rise in GP retirement age from 60 to 65, which GP leaders have warned will lead to a huge battle with the profession and risk an ‘exodus’ of GPs retiring early.
However, the report goes even further that this, saying public sector pensions should in future be linked to the state pension age, which is due to rise to 68 under Government plans.
The BMA launched a massive attack on the plans, describing them as ‘unacceptable’ and condemned proposals for increasing pension contributions by 3%. It warned GPs would be left to foot the majority of the bill of the changes and would make the entire NHS Pension Scheme untenable.
Lord Hutton’s report reads: ‘The introduction of the link to the state pension age, which will initially move normal pension ages to 65, will move the proportion of adult life in retirement for public service pension scheme members back to about a third: roughly where it was in the 1980s.
‘The current state pension age of 65 is already the normal pension age for most new entrants to public service pension schemes. Moving to this for future accrual will more fairly distribute the benefits between scheme members.
‘In the long term, the timetabled increases in state pension age should help to keep the proportion of adult life in retirement for members around this level, on current life expectancy projections.
‘The report adds: ‘A female pensioner in the NHS scheme who retired at the age of 60 in 2010 could expect to spend around 45% of their adult life in retirement, compared to around 30% for pensioners in the 1950s.
‘This observed and projected increase in life expectancy has already been recognised within the state pension system with the Pensions Act 2007 proposing an increased state pension age of 68 from 2046 for both men and women with interim increases to 66 and 67.’
Lord Hutton called for ‘dialogue’ over the changes with employees and unions, including the BMA: ‘The current model of public service pension provision is clearly not tenable in the long-term. There is a clear need for reform. Getting the decisions right on the most appropriate structures and designs will be crucial to making any changes work in the future,’ he said.
However, BMA leaders have already pledged an all out battle against the plans, with the prospect doctors will join other public sector workers in mass industrial action.
BMA chair Dr Hamish Meldrum, said: ‘An increase to the retirement age for NHS staff would be unacceptable. Doctors in their late twenties who had expected to retire at 60 could now have to work to the state retirement age of 68.
‘Such a sudden leap is particularly unfair given that NHS staff signed up to a significantly revised pension scheme only three years ago. Working with colleagues in health and other public services we will study the proposals in detail and will be seeking urgent talks with NHS Employers and the Government on any further changes to the NHS pension.’
A statement from the BMA said: ‘There would be a real risk of a staff exodus, as doctors in their fifties – many of whom are eligible for voluntary early retirement – consider their futures. GPs in particular – despite being central to Government plans for the NHS in England – may be tempted to take 24-hour retirement (an option that allows them to draw a pension while working reduced hours) given the likely total cost of NHS pension scheme membership including their contribution as employers.’
On the proposals to ramp up contributions, it added: ‘The risk of major increases to contributions is that many lower-paid workers will opt out of the NHS pension, increasing the burden on the state, and also resulting in higher paid workers having to foot the remainder of the bill. If doctors feel their contributions are too high, the scheme will cease to provide value to them, and many would be likely to opt out, potentially destabilising the whole scheme.’
Sign our petition No to 65 Dr Hamish Meldrum