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UK eyes new national health pension scheme

UK – The UK may create a new pension scheme for workers in the National Health Service as part of plans to raise the NHS Pension Scheme retirement age.

“It is envisaged that if the government decides to go ahead and implement a higher normal pension age for staff, there should be a new pension scheme for new staff,” the NHS Pension Scheme review consultation stated.

“Existing staff will have the opportunity to join the new scheme should they wish, probably on the basis that staff will transfer all existing membership into the new scheme with a pension age of 65.”

The proposals to raise the retirement age to 65 at the unfunded scheme final salary scheme has angered unions. Unison says it will fight the proposals “all the way” – with strike action a possibility.

General secretary Dave Prentis has written to all MPs in the ruling Labour Party warning them that the “widespread anger and resentment” caused by government attacks on pension schemes.

“To suggest that NHS workers should be forced to work until they are 65 is living in cloud cuckoo land,” Prentis said. “Forcing staff to work longer will simply raise the level of ill-health retirements and end up costing the NHS more,” he said.”

Under the proposals, new employees joining from 2006 would be asked to work up to the age of 65, while existing employees who have not hit 60 by 2013 will be required to work until 65 before retiring.

The consultation recommends an improvement in the accrual rate at the scheme to 1/60th of final salary for each year of service, as opposed to 1/80th at present.

"Our aim had always been to ensure the NHS Pension Scheme meets the needs of a modern NHS and its staff, by making benefits more appropriate for today's workforce," said David Jordison, chairman of the review.

The deadline for responding to the consultation is April 11 2005.

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