Cookies and Privacy  UNISONScotland www
This is our archive website that is no longer being updated.
For the new website please go to
Click here
Home News About us Join Us Contacts Help Resources Learning Links UNISON UK


About the P&I Team Briefings Home | Responses | PFI Index | Policy Guide




NHS Pensions Review Briefing 110


This briefing outlines the proposals made in the consultation paper on the NHS pension scheme review in Scotland. The overall responsibility for the review of the NHS scheme lies with the Scottish NHS HR Forum (HRF). The HRF, in general terms, is charged with the role of addressing NHS staffing issues on a Scotland-wide basis, including pensions. Its membership is made up of NHS trade unions, NHS employers and the Scottish Executive.

Any changes to the NHS Pension Scheme in Scotland require secondary legislation to be approved by Scottish Ministers and agreed by the Scottish Parliament.

New NHS Pension Scheme

The consultation paper proposes a number of changes for a new NHS pension scheme in Scotland.

These include:

  • Keeping the scheme as a defined benefit scheme but a proposal to move away from a final salary to a career average scheme.
  • A normal scheme retirement age of 65. Where benefits are paid before this age, except on ill-health grounds, they would be actuarially reduced to reflect the fact they are being paid early. Benefits brought into payment after this age would be actuarially increased.
  • Benefits would accrue at a rate of 1/60th of pensionable pay for each year of membership of the pension scheme. This is an increase from the current rate of 1/80th of pensionable pay.
  • It is not intended with such an accrual rate that the Scheme could provide an automatic lump sum, but could instead allow members to commute part of their pension at a rate of 12:1; in other words, for every pound of pension foregone, £12 of lump sum would be awarded.
  • Provision could be made for flexible retirement to remove the cliff edge between retirement and work. Proposals include being able to draw down a part-pension while continuing to work and build up further pension benefits; having the opportunity to take full pension benefits and continue to work without a break in service, thus building up further pension benefits; and the opportunity to retire, take full pension benefits and then rejoin the scheme after a break.
  • It is proposed that survivor benefits could be extended to unmarried partners and same sex partners. Other proposals include multiple nominations for death in service lump sum benefit and paying a pension at the salary rate on death in service for 6 months.
  • New ways to save more for retirement, including proposals to amend current added years and Additional Voluntary Contributions schemes.
  • A review of sickness and ill-health arrangements including redeployment to another post that suits the skills and abilities of employees if they are unable to return to their own post.
  • Widening access to the pension scheme for healthcare staff employed in the private sector, for instance via PFI transfers.



Some of the key elements and their implications are highlighted below.

Final Salary vs. Career Average

UNISON Scotland opposes the proposal to move from a final salary scheme to a career average scheme. While the final salary scheme is well known and valued by members there is not enough information on the operation of the career average scheme to allow it to be properly valued. In the private sector the shift to career average schemes often results in a reduced pension.

There is a further concern that just as the NHS is introducing better training and career opportunities to help staff move up through the ranks, they are taking away a very good incentive to take on additional responsibilities and try to improve career chances. UNISON Scotland also regards the final salary pension scheme as an aid to the recruitment of new staff.

Raising the Normal Retirement Age

UNISON Scotland has argued against this proposal in responses to the Local Government Pension Scheme and is concerned that the same spurious arguments about increased life expectancy have been used in this consultation.

UNISON Scotland is not against increasing the retirement age of workers but believes that it is a decision that each worker should take dependent on their own personal circumstances. There is a fear that forcing employees to work longer could lead to more ill-health retirals, a risk to patient safety and a reduction in staff morale.

Further details of this debate can be found in previous P&I Briefings and Responses (see below).

Accrual Rate & Lump Sum

UNISON Scotland welcomes an increase in the accrual rate as this would help scheme members build up a larger pension. However this change is proposed alongside a change affecting access to a lump sum payment.

The new look NHS pension scheme proposes to have no automatic lump sum whereas the current scheme provides on equivalent to 3/80ths of pensionable pay. Although the new proposals could result in a larger lump sum (up to 25% of the benefits accrued) there is a resultant reduction in the pension awarded.


UNISON Scotland is concerned about the new proposals on ill-health. Further consultation needs to take place on this issue.

Forcing members into alternative employment when they are incapable of carrying out their previous post seems a breach of the pensions contract. There does not seem to be any guarantee that employers will re-employ those who are unfit to continue in their original posts.

Contribution Rates

Proposals for changing the contribution rate for the pension scheme include: all staff paying 6%; a lower contribution rate of 5% for those up to the top of pay band 2, with everyone else paying 6%; and a variable rate ranging from 5% to 7.75%.

Action for Branches Further Information

This briefing paper is intended to update members on the proposals to change the NHS Pension Scheme in Scotland.

Branches should be involved in the Protecting Public Service Pensions Campaign on Friday 18th February 2005. This involves a lobby of all MPs and MSPs in Scotland to stop the proposed changed to the NHS Pension Scheme and other public sector pension schemes.

UNISON Proper Pensions Campaign


UNISON Scotland Response to Proposed LGPS Phase 2 Changes


UNISON Scotland Pensions MiniSite



Pensions Index

Back to Pensions minisite

UNISON Proper Pensions Campaign

UNISON Scotland Response to Proposed LGPS Phase 2 Changes

UNISON Scotland Pensions MiniSite

Contacts list:

Dave Watson -

@ The P&I Team
14 West Campbell St
Glasgow G26RX
Tel 0845 355 0845
Fax 0141-307 2572