The NHS Pensions Agency has recently confirmed that NHS staff who are outsourced to private sector organisations will be able to continue with their existing NHS pension entitlements.
The Government has been committed to making such a change since
July 2012 when Danny Alexander, the Chief Secretary to the
Treasury, announced that the policy would be introduced, but
further details up until now have been thin on the ground.
The cost of having to fund transferring employees' pension
entitlement has long been seen as a significant deterrent to
private organisations bidding for NHS contracts, since the
'Fair Deal' policy meant that outsourced staff continued to
be eligible for comparable pension benefits when they transferred
across to their new employer. As a result of the changes confirmed
by the NHS Pensions Agency, private sector employers will be able
to pay into the existing NHS pension scheme in relation to the
transferring employees, rather than providing comparable schemes
themselves. This will still mean pension contributions
equivalent to 14% of the employee's salary but would represent
a considerable reduction on the 25% contributions that some private
providers have been making to ensure that broadly comparable
benefits are in place.
Whilst private sector providers into the NHS are likely to welcome
the changes, a degree of uncertainty remains as the formal
implementation date has yet to be announced and the actual wording
of the policy is still unclear. The Government has also yet
to confirm whether the change will only effect those employees who
subsequently transfer from the NHS or whether those employees who
have already transferred will also be covered. Given these
outstanding questions it may be a matter of withholding final
judgment for the time being until the exact details of the policy
are published.
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