Pensions U-turn paved way for Suffolk NHS privatisation

Community healthcare employees in Suffolk will keep their NHS pensions when the service is transferred to a private sector company. Talks leading to this U-turn delayed yesterday’s announcement by three months.

About 1,000 staff will be transferred later this year to Serco which is now the preferred bidder for the £140m three-year contract.

As late as last December Suffolk Community Healthcare staff were being told the requirement was for the new employer to provide them with pensions, approved by the Government Actuary Department, which were “broadly comparable” to their NHS pensions.

At that time it was said the settling the pension arrangements was taking longer than expected with the result that an announcement was delayed from the original December date (source: staff newsletter).

The U-turn is revealed in updated FAQs posted on the NHS Midlands and East project website yesterday. They say:

Serco is planning for staff to remain on the NHS pension scheme and is applying for an NHS pension number to allow this to happen…

We are currently in discussion with NHS Pensions Authority and the Department of Health on pensions provision for new staff moving forward. We will discuss our approach with staff representatives during the transition period.

Alternative “broadly comparable” pensions have been the expected standard for private sector contracts. This extract is from a What happens to my Pension? document on the social partnership forum:

…staff who join a non-NHS employer will normally lose access to the NHS Pension Scheme. However, if the move is compulsory, then the new employer will be required to provide broadly equivalent pension benefits as part of the ‘Fair Deal for Pensions’ policy Where the move is voluntary staff should be offered the opportunity to join the new employers pension scheme.

Whether this change in the proposed SCH contract was a result of employee pressure or the inability of private sector bidders to meet the “broadly comparable” test is unclear. I hope comments below will help clarify this and also indicate the significance of the decision for other private sector contracts.

Press releases announcing the Serco’s preferred bidder status are on the NHS website and at Serco.

Details of the deal for Serco to take over later this year and reactions are at the Financial Times, Ipswich Spy and the East Anglian Daily Times.

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