Nurses who are compulsorily transferred out of the NHS to a private sector company delivering NHS services will be able to remain members of the NHS pension scheme, the Treasury has said.
With immediate effect, any worker will remain a member of the NHS Pension Scheme if they are transferred out of the health service to a private provider under transfer of undertakings, protection of employment (TUPE) regulations.
The move is likely to particularly affect community nurses, many of whom work for organisatons which have three to five year contracts and are expected to find their services put out to competitive tender over the next few years.
In addition nurses who have alrady transferred out of the NHS will have the right to rejoin the scheme when the organisation they are working for has its contract retendered.
Barrie Brown, national health officer for Unite, said: “Quite clearly we are going to see far more providers and people will be in the NHS one year and with a different provider the next. Five years after that they could be back with the NHS again.
“As long as we are facing that situation, widening access to the pension scheme is important for our members.”
The changes appeared in new Treasury guidance on the Fair Deal pensions policy, which organisations providing NHS services must follow.
They reflect the government’s aim to widen access to the pension scheme, a move which will make it easier for private companies to compete with the NHS for contracts.
This is because under previous pension rules a private provider bidding for NHS contracts was required to offer a “broadly comparable” pension to that offered to NHS staff.
But matching the effects of a taxpayer subsidy and overall government guarantee is expensive. The Hutton report on public sector pensions estimated it cost private providers the equivalent of a 40% contribution rate, when their NHS counterparts contributed just 14%.
Under the new rules the government will effectively guarantee the pensions of privately employed staff delivering NHS funded work, as it already does existing NHS employees. The plans will also boost the stability of the NHS pension scheme as there will be more individuals paying into it.
The Treasury said in a statement: “The new approach will ensure staff compulsorily transferred out of the public sector will continue to have access to good quality pensions.
“The new Fair Deal policy will achieve better taxpayer value for money by removing the requirement for contractors to provide costly private sector pensions. Lifting this requirement should also generate more bids for the provision of public service contracts which will drive efficiencies and innovations.”
The Treasury and Department of Health are still deciding whether to grant access to the NHS pension for any private sector employer whose staff deliver NHS funded clinical services – whether they have previously worked in the NHS or not.
A final decision is expected from ministers “within months”, according to a Treasury source.