Lansley: Public sector pension reforms 'unrealistic'

Monday, 25 July 2011 12:00 AM

Andrew Lansley, health secretary, criticises public sector pension reform plans in a leaked letter sent to chief secretary to the Treasury, Danny Alexander:

"The paper... assumes that public sector workers, many of whom are women, will work a 48-year career [to get a full pension].

"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 maintain gold-standard pensions.

"We face a real risk, if we push too hard, of industrial action involving staff groups delivering key public services.

"There is also the risk that lower paid staff in particular will simply opt out, leaving HMT [HM Treasury] with reduced receipts in the short term while still having to pay for past pension promises.

"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."

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