NHS Pensions

Yes, they\’ve bottled pension reform again:

Campaigners accused the Government of double standards after it was announced that all NHS staff would keep their final salary pension schemes.

All NHS staff, including new starters, will be guaranteed a final salary scheme under the new arrangements, meaning their pensions will be based on their highest pay during their last three years at work.

We\’re often told that government is better at planning things because it has a longer time horizon than private business does. The truth of that can be seen in precisely these pensions changes. Business is closing final salary schemes as they are indeed planning for 40 years down the road. The public sector still has them because the government won\’t risk short term disorder (and the possibility of a lost election) at the cost of financial problems 40 years down the road. So, err, can we put to rest the idea that governments do indeed plan for the future better than the private sector?

One comment on “NHS Pensions

  1. I find it hard to believe that businesses are closing final salary schemes because they can see 40 years down the road. What would they see that would argue against a final salary pension scheme? Is UK or global GDP going to slow down dramatically? Are life expectancies going to outpace forecasts? I don’t really see the link.

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