Consultants can still look forward to a decent pension despite the prospect of a trivial pay rise in 2010.
This is the message from the BMA after Chancellor Alistair Darling caused alarm by saying that he intended to squeeze public sector pensions.
Darling announced in the pre-budget report that he would set a ceiling of 14% on employer contributions.
“Public pensions need to be broadly in line with those offered in the private sector. So by 2012 contributions by the state to public service pensions for teachers, local government, NHS and the civil service will be capped - saving around £1bn a year,” he said.
But Dr Andrew Dearden, chair of the BMA pensions committee, accused Darling of making political capital.
He said there was already an agreement in place that NHS employers’ contributions to the NHS pension scheme would be capped at 14% from April 2008. This had been set up following a regular review of the scheme.
“There are no funding issues with the NHS pension scheme,” he said. ”There is a cost sharing agreement which means any future cost increases to the NHS scheme will be borne exclusively by the members - not by employers, the taxpayer or the government. If costs rise members will decide to either pay more in contributions or accept a decrease in their benefits.”
He said the Chancellor failed to admit that NHS employees has actually contributed more to the scheme than it had paid out in the last five years.
A spokesman for the NHS pension scheme said that in 2008/09 it had received a total income of more than £7.7bn and paid out over £5.6bn resulting in a surplus in excess of £2.1bn.
“It’s a bit rich for a politician to stand up and say - ‘This is terrible’ - when in fact NHS workers are lending the government several billion pounds a year. At the moment we are not anticipating the need for any increases in contributions before 2012,” said Dearden.
A spokesman for the Treasury confirmed that a cap on employers’ contributions of 14% had been agreed with the BMA a couple of years ago. He explained that there was now more information about longevity calculated from population projection figures which meant that the agreed cap would kick in.
“We have recognised that this will mean slightly less spending (for the government) that would otherwise have happened from 2012/2013 onwards,” he said. But he added that this would not occur “for a good few years”.
Tags: Pensions
The real problem here is that Gordon Brown is looking to steal more pension money. He reduced all self funded pensions by £5 billion a year when he removed tax relief on dividends within pensions. He obviously realises that our pensions are over provided at present and I think he wants to steal that money that should be set aside for our ever longer lives.
When is the election?
I plan to retire in jan 2012 ( I will be 60 in August 2011). Is my pension liekly to be safe under a Tory Goverment?
Probably not safe under the Tories. I was considering voting for them until I heard what George Osbourne had to say on public sector pensions. We can anticipate the end of any kind of final salary scheme and will be lucky if we get the benefits that we are already signed up for.