Hard realities
The disappointing truth is that although common misconceptions may be driving some early exits, hard realities about the operation of these schemes are driving others.
First, across the board, the interaction between the different normal pension ages under legacy and reformed schemes does not work well for members.
There is no actuarial enhancement to the legacy benefits of members retiring late from certain schemes even though net pay arrangements in the reformed Care scheme may be much later.
Many police officers fare particularly badly under these arrangements. So there is a heady mix of factors that appear to speak in favour of retirement no matter the recruitment and retention imperatives. And they do not apply solely to our NHS clinicians.
Arguably we have a greater emotional response to disaffection in our beloved NHS than we do in our police forces, but it would be concerning if that emotional response became the catalyst for resolution in the NHS alone. Yes, there are some elements of the NHS pension scheme design that are unique to it and they require a unique solution.
But more broadly there are issues common to many public service schemes that could be addressed in a bid to ease the emerging recruitment and retention crises.
Lord Hutton's recommendations
In his final report setting out his blueprint for the future of public sector pension provision, Lord Hutton recommended that public service pensions, inter alia, should be ‘supporting productivity’ and be ‘transparent and simple’. All his recommendations were accepted by the government.
But the proof of the pudding is in the eating. We are failing in the first of those objectives because we are failing in the second. And we are failing in the second because we have clung onto historic elements of legacy scheme design that conflict with key elements of reformed scheme design and that combine together to confound and confuse members’ retirement plans.
It is these transitional arrangements that are sometimes unfair, but much more often completely unfathomable to all but the most dogged pensions professionals.
There are no easy fixes, and I fully accept that there will always be a small number of individuals for whom pension tax is the overriding concern. But if we are to get back to a place where our public servants unequivocally look forward to receiving the undeniably generous pension they have built up as a reward for a life of public service, then we do need to work towards removing some of the blockages I have mentioned here.
And we need to do better at ensuring that members are given clear and simple information so their decisions are based on fact rather than hearsay or misconceptions. And this needs to apply across the public sector, not just in the NHS. No matter how much we treasure that great army of health warriors.
