UK Government policy, led by HM Treasury, is to reform public sector pension schemes by implementing the recommendations from Lord Hutton’s review conducted in 2011. This resulted in the Public Service Pensions Act 2013, which has since reformed the majority of public service pension schemes. Over four million public sector workers have moved to new pension arrangements. The existing NDA final salary pension schemes are to be reformed to a Career Average Revalued Earnings (CARE) based scheme bringing NDA pensions in line with wider public sector schemes.
Recognising the vital work that the NDA and its workforce delivers, the Department for Business, Energy and Industrial Strategy (now Department for Energy Security and Net Zero) and the NDA worked with its trade unions in 2017 to develop an agreed pension scheme that was tailored to the characteristics of the affected NDA employees. This resulted in a proposed bespoke CARE scheme in line with the key principles of reforms already implemented elsewhere in public sector.
The bespoke CARE scheme design was formally accepted by the trade unions following statutory consultation in 2017 with affected NDA employees and a ballot of union members. A Heads of Terms, setting out the principles and agreeing to the changes needed, was accepted. Originally scheduled for legislation in 2018 the process was delayed because lack of parliamentary time due to a variety of factors including Covid and changes of Government. The reform, contained within the Energy Bill, is currently passing through the UK Parliament’s legislative process.
To help you understand more about CARE you can watch a presentation below.