Nuclear decommissioning workers' pensions are affordable

Nuclear decommissioning workers' pensions are affordable

Dungeness nuclear power station

Prospect deputy general secretary, Dai Hudd, recently blogged about challenges facing our members working in nuclear decommissioning.

One of those challenges relates to members of final salary pension schemes in the nuclear estate who are covered by a government-led consultation on proposals for reform.

The proposals would significantly reduce the pension that members would build up in the future.

As these members had previously been promised that their future pensions would be protected (Parliament even enshrined those promises in law) there must be a very good reason for government to seek to renege on those promises. Right?

This blog post examines the stated reasons for proposing the changes being consulted on.

The impression given in the consultation document is that the changes are being proposed as part of the public sector pension reform process.

So these are public sector pension schemes. Right?

Well, no, they are not. They are private sector pension schemes operated by trustees in line with the trust deed and rules and not public sector pension schemes established by statute.

Neither were the schemes included in the terms of reference for the review of public sector pension schemes undertaken by Lord Hutton or covered by the Public Service Pensions Act 2013.  

Whatever the technicalities involved, the government is right that it is important for pension provision across the NDA estate to be reformed in line with the changes to the public sector though. Right?

Then why have they not proposed reforms that are in line with those that applied to members of public sector pension schemes?

A major conclusion of the Hutton report was that “government should continue to provide a form of defined benefit pension as the core design”. But far from continuing to provide defined benefit pensions for employees of these companies these schemes are being phased out there.

Government refuses to even entertain the idea of adhering to this key recommendation of the Hutton review for these companies.

Even for those who do retain a defined benefit pension scheme the proposals depart from the public sector pension reforms in significant ways:

  • Members within 10 years of pension age in the public sector pension schemes were granted protection whereas the NDA proposes limiting this to members within 5 years of pension age.
  • There was tapered protection for members of public sector pension schemes that just missed out on full protection but none is proposed by the NDA.
  • Contribution increases for members of public sector pension schemes were phased in over three years.

Important and all as these points may be isn’t the big picture here about ensuring that these pension schemes are affordable and sustainable? This is what the NDA says is driving the proposals.

Affordability and sustainability are absolutely key! But these schemes were all closed to new entrants many years ago. The cost of these schemes will fall over time. Indeed the cost of overall pension provision for these companies will also fall significantly.

So they are becoming more and more affordable and that increasing affordability over time means sustainability is not an issue.

Finally, fairness was another reason for proposing the reforms given by the NDA.

Is pretending that proposals are about affordability and sustainability when they are really about meeting arbitrary targets for savings agreed behind the backs of the members concerned really fair?

Is reneging on agreements and breaking promises that were enshrined in statute, fair?

Neil Walsh

Neil Walsh


  • The Judges have won a pensions discrimination claim, how will this affect the nuclear workers whom are being offered a similar CARE scheme and implementation plan? 

    James Robert Vincent

    18 January 2017 09:42

  • Hi James - that's a very good question but one there isn't a simple answer to. We are going through the decision to see what the implications could be. If there is anything helpful to other groups of members that is great and it will be used. However it's important to keep up everything else that is being done as well. When we have had more time to assess any implications we will update the Q+A on the website.


    Neil Walsh

    18 January 2017 16:05

You cannot currently add comments, please log in to add a comment.