Lansley admits unions were right on pensions


by Sunny Hundal    
8:04 am - July 25th 2011

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The Telegraph today has an extraordinary leak from health secretary Andrew Lansley.

The letter essentially echoes what Labour, and especially the unions, have been saying about changes to pensions.

According to the Telegraph:

He said: “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.”

In the five-page letter, Mr Lansley criticises other parts of the proposed reforms – drawn up following a report for the Government compiled by former Labour minister Lord Hutton – for being particularly unfair to NHS workers.

Many health workers already pay more for their pensions than civil servants or other Government employees.

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

“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.

Wonder how the government’s own claims will stand up now. This is a big bomb in the midst of the government’s push to destroy public pensions.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


I don’t understand the relevance that the average full time career of someone taking an NHS pension is only 18 years. A pension should be based on the expected length of a full career – you can not expect to get a full value pension if you only work a small number of years!

We are anageing population and it is only reasonable we all work longer – to do otherwise is not affordable.

If someone retires after eighteen years, fine. They should get a pension worth 18/48 of a full one. I can’t see why people should get full pensions for effectively working into their late thirties (18 years after starting). Most people will work for more than one employer in their lifetime, and the pension will reflect that.

So if I work in the public sector for 10 years, and the private sector for 35 years, my public sector pension will be small, but that is because I will have only have worked in the public sector for 10 years.

Also, I thought LC hated Lansley and thought his reforms were awful. Why is he being cited as an authority on pensions now?

NHS pensions are calculated on the number of years worked and the final salary. So a person on eg pay band 6, working for 18years will get slightly more than one half of the pension of another on the same band, but working for 36 years.

Also, NHS pensions cannot be taken until a person reaches 60 years or 65 if they joined after 2008.

And further, NHS pensions are based on full-time equivalants, this is where the tories have attempted to use smoke and mirrors to give the impression that the pension is better than it appears.
To take my previous example, a person on band 6 who works for 36 years on part-time hours (say 17 and half hours per week) will receive a full-time equivalant of 18 years at the age of 60 or 65. As NHS employees are mainly women who are more likely to have part-time hours, the pensions paid are significantly less than the assumptions based on all employees working full-time for 36 years.

Steveb, what is your point? If you only work 18 equivalent years then it is quite reasonable to expect a small pension.

6
Reasonable and unreasonable are value judgements that I haven’t made, I have outlined how NHS pensions are calculated, and if you have read my posts, you will see that less years and less contributions = less pension.

7.
You have pointed out that understandably less years = less pension.

Isn’t that how all pension schemes operate?

In your post no. 5 you accuse the Tories of using smoke & mirrors to overstate pension benefits. How exactly have they done this?

8
Why didn’t you ask that question in the first instance?

The government’s recent proposal to cut public sector pensions was based (NHS) on generating incorrect information, as seen in posts 2,3. The calculated figure is, in fact, far less than was published. Of course, the public now believe that you can collect a ‘full’ pension at any age if you have worked in the NHS for 18years. It was any easy way to direct scorn towards the public sector.

Steveb:

Who has said you can collect a pension at any age? No one on this thread. Is said ‘effectively’ to illustrate the shortness of service.

10
I suggest you read your own post @2

I wasn’t saying people could take it in their late thirties- rather that if they started accruing their pension from 21 they would have built up 18 years’ service by 39. Apologies for not making that clear.

All the more reason why Ed Miliband was wrong on the pensions strikes – if the tories were fighting among themselves behind closed doors on pensions, and if their “unaffordable” argument fell apart in public, it was a mistake that Ed wasted all his energy on that “I condemn the strikes…I condemn the strikes” business when he should have been making the argument against the pension cuts ,

@9

Sorry, I don’t see where in posts 2,3 there is any evidence that the Tories used incorrect information on which to base their recent proposals. Do you have a link to the tory proposals and can you point out exactly where their information is incorrect?


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