Nuclear workers score win with pension age 60

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Around 8,000 nuclear workers can continue to receive a full pension at age 60 as the Combined Nuclear Pension Plan and the Magnox Electricity Supply Pension Scheme are switching from final salary to career average. 

The pension change is in line with employees in the public sector moving from final salary schemes to career average schemes. For most this happened about a decade ago, but the Public Service Pensions Act 2013 did not cover all public bodies.  

The change to CARE for nuclear workers now being implemented requires secondary legislation. When the Nuclear Decommissioning Authority (Pension Scheme Amendment) Regulations 2024 were debated in parliament in February, Conservative Nigel Mills was critical of keeping the pension age at 60. 

“Was that a negotiation position that had to be taken? I understand that those in the fire service or police force may not be able to work until 67, but it seems very generous for the taxpayer to fund a retirement seven years early in this situation,” he said. 

The MP for Amber Valley also queried a cost savings estimate of £200m from the CARE switch, noting that the estimate was seven years old and should now be much higher given the changed funding status of many schemes. 

Andrew Bowie, parliamentary under secretary of state at the Department for Energy Security and Net Zero, agreed the pension for nuclear workers was “very good”. 

“Allowing a full pension award at 60 for the majority of members when most public pensions are linked to a state retirement age of 67... was a considerable win for workers at the NDA and something we are proud to have achieved,” he said.  

Bowie argued that pension age 60 means the the Nuclear Decommissioning Authority would “continue to be attractive to the best and brightest". The two schemes are closed to new entrants.

The switch to CARE was due to take effect from this April. Labour MP Kerry McCarthy wondered why it has taken the government until 2024 to implement reforms kickstarted in 2011, and for which scheme members were first balloted in 2017, with the government deciding to bring forward legislation in December 2018. Bowie admitted the time taken to bring in legislation was “sub-optimal”. 

He added: “Having met the unions in the latter part of last year, I am aware of the concern and the not inconsiderable worry caused by how long it has taken us to bring this forward. However, we did need to wait for parliamentary time and the actions that we brought forward through the Energy Act to allow us to make the changes required to bring the NDA’s pension schemes into a much better place than where they were."  

He did not say whether the cost savings were now expected to be higher than in 2017.  

“The NDA will, of course, continue to engage extensively in communicating the reform to employees affected by the changes and the trade unions that provide representations across the NDA group,” he added. “Of course we are always happy to look at the impact of the changes once they have been implemented. There is the ability after the implementation of this secondary legislation to make changes to how the schemes operate.”  

McCarthy also questioned why the government is not implementing the Hutton reforms in full in relation to the scheme, which would rule out any defined contribution benefits. She noted that some nuclear workers still have DC pensions.  

Pension changes are a sensitive issue in the nuclear sector since consultancy AEA Technology was privatised. In 1996, in the space of a month, scheme members had to decide whether to stay in the government scheme or move to a new private sector fund, which the Government Actuary’s Department portrayed as equally secure. The company then went bankrupt and the scheme fell into the Pension Protection Fund. It emerged later that the wording of the GAD report was changed following pressure from the employer to make the private sector scheme sound more attractive.   

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