NHS pensions are to be scrutinised by an independent commission formed to address the “growing disparity” between provision in the public and private sectors.
The commission, chaired by former Labour health minister John Hutton - who was ennobled in the dissolution honours - will make recommendations on how public sector pensions can be made sustainable and affordable in the long term.
Lord Hutton said: “I welcome the opportunity to lead a root and branch examination of both the short term and longer term options for reform to public sector pensions. I am determined this work should be conducted openly and transparently and that our conclusions will be underpinned with a comprehensive analysis and evidence base.”
As well as the disparity between public service and private sector pension provision, the review will look at whether pension schemes are fair across the workforce and how risk can be shared between taxpayers and employees. It will also consider wider government policy aimed at encouraging savings.
An interim report in September will be followed by the full report before next year’s Budget.
The review was set up by chancellor George Osborne, who in Tuesday’s Budget speech called the “spiralling cost” of public sector pensions “one of the greatest long term pressures facing our nation’s finances”.
He said: “It’s an important psychological as well as financial reward for people at the end of their careers. High earners in the NHS have already raised their pension contributions in the last couple of years and will come under the new tax regime for very high earners.”
Unison general secretary Dave Prentis told HSJ last month that any attack on public sector pensions would lead to industrial action.