§ Mr. DobbinTo ask the Secretary of State for Health if he will make a statement on the report by the Government Actuary on the investigation of the National Health Service pension scheme in England and Wales 1989 to 1994. [76011]
§ Mr. DenhamI have accepted the report and today placed copies in the Library.
The report concludes that it would be prudent to increase the rate of contribution required from employers to meet the scheme's future liabilities. The current rate is 4 per cent, of pensionable pay. The Government Actuary is content with our proposal that the rate should increase to 5 per cent, from 1 April 2000, with a further increase to 7 per cent, from 1 April 2001. Funding for these increases has been included in the Department's comprehensive spending review settlement.
The cost of index-linking National Health Service pensions is currently met by the Exchequer. As the report notes, I have agreed with the Chief Secretary that, in principle, the Scheme should assume its Pensions Increase liabilities from 1 April 1994 under a financial restructuring. Our officials are discussing the basis of such changes and I will inform the House when final agreement is reached. In the meantime, the Government Actuary considers that the proposed increases in employer contribution rates are consistent with the nature of the changes likely to be required under the restructuring.