Can NHS pensions be used to invest in NHS?

[okright]

Thinking about friends in NHS's million pound pensions (age 40 years + professionals- dentists, doctors).

Would it be viable to de invest in worldwide investments and invest in NHS instead and pay back the pensions from NHS money. Would that be cheaper and improve the NHS situation which can only get worse without radical change ?

No that wouldn't work

The NHS doesn’t make any money though, how would it work? Are you essentially talking about some sort of bond where NHS promises to pay back original amount plus x in interest?

I'm not sure NHS pensions are like private pensions ie take out and invested in a scheme. I think the government just has to budget for them.

The level of employer (tax payer) contribution in public sector pensions is mental though.

When you say 'million pound pensions' you make it sound like NHS doctors shouldn't have them. Private doctors have similar pensions, paid for either through their direct fees or insurance premiums.

The money we put into NHS pays the new pension costs with a view to reducing the cost overall?

Do I? The inference is only that the pensions are chunky.

NHS pensions are generally used to pay nhs pensioners, they don’t invest the money as private schemes do, so , no it wouldn’t work

Huh?

Pension funds need to be invested where they will make a profit.

The NHS as a whole does not make profit. Some private enterprises are able to make a profit by negotiating contracts to do some bulk-volume tasks like cataract operations and colonoscopies. They make the profit by charging the NHS budget a set price per patient dealt with and then cherry picking the easiest and cheapest patients to serve, leaving the complex cases to be dealt with at the hospital not covered by the contract. If the NHS was the funder and ultimate profit-beneficiary of such schemes it would definitely be losing money overall, not making a profit.

I thought the NHS pension scheme didn't hold large investment funds and the pensions of current retired pensioners are paid from the contributions of current working members? Or am I getting confused with a different public sector scheme?

There is no money in an NHS pension fund sitting like a massive piggy bank OP.

The NHS pension scheme is unfunded, so there is no investment "pot". NHS pensions are just paid out of general taxation. And even if there were such a pot, what you are suggesting OP is basically stealing pension funds to fund the NHS. Have a Google of Robert Maxwell and see how well that went down...

It’s an unfunded scheme. So current contributions pay existing pensions. There is no stack of cash to invest anywhere. The only public sector scheme that has an investment fund that I’m aware of is the Local Government Pension Scheme. Kinda makes you wonder what happened at the start of all of these schemes.

It's a deliberately provocative term regularly used by opponents of the NHS to drive public support for an insurance-based healthcare model.

As pp have said, the NHS pensions are unfunded. They are just an IOU promissory note on paper from the Gov to NHS workers.

There is no money backing them.

Thanks for the responses. So the NHS budget includes the pension payments?

The current NHS workers are paying into a "pension" every month, a contribution from them and a contribution from employer.
They are basically paying the pension of the current NHS pensioners. The next generation will pay their pension.

The NHS pension scheme is completely different to other schemes

Not exactly. The NHS budget includes any extra funds to top up what the NHS pensioners have set aside from their wages into the NHS pension to cover the payments to them. It is a defined benefit scheme, so instead of the NHS as an employer contributing to their pension pots as they go, they promise a certain annuity based on a small % of average career salary. The workers contribute wages to save for it, and the NHS takes on the risk of these savings not being enough to cover the promised benefit. This means the cost of NHS pensions is deferred to only paying to top up existing pensioners as they pay nothing towards the pension of workers- their contribution is the IOU promised projection that is unfunded.

In a defined contribution scheme, which is what most workers have, you contribute to your pension pot from your wages and your employer contributes a certain amount as you go and then all the risk of that pot gaining money or losing money is on you as the worker. There is no guarenteed annuity as to what those savings will buy you but those pensions are portable and can move with you. So if a company goes bankrupt, you don’t then lose your pension too. These are funded pensions because the company actually puts real money in your pension pot, with the NHS it is a unfunded promise of future payment.

They must invest their funds somewhere, otherwise they wouldn't be able to afford any interest rates rises, but I doubt they they would have spare money which can be creamed off the top.

There are no funds. The NHS pension plan is unfunded and pension payments are paid out of general taxation.

Technically the NHS Pension Schemes are "pay as you go" schemes. This month's contributions from employees and employers are used to pay this month's pension instalments.

There is no "fund" as such to be invested anywhere.

You mean an insurance based healthcare model like that of France or Germany or much of Scandinavia which delivers better outcomes for patients. That kind of opponent..? ☺️

As others have posted, the NHS pension scheme is unfunded, and uses current contributions to fund current pensions. When the then (Labour) government set it up they spent all the contributions in the early years, rather than set aside in a fund for future retirees. They didn’t think that (a) the NHS would get so big, (b) that people would live so long and (c) didn’t consider the effects of inflation.

No, I'm referring to those who favour an American system. The European model is not a pure insurance system. They also don't argue over whether doctors should have pensions.

Ffs no one's saying they shouldn't have pensions.

But surely people can ask questions?

And surely the American system isn't the only alternative.

You can ask questions without meaning let's race to the bottom.

I do think realistically everyone should be investing an equivalent amount in their pensions. Getting old is expensive and the costs are only going up. Wages in the public sector are lower. I think of the pension as deferred salary. I was told you should half your age and that is the percentage of your salary you need to tuck away monthly.

Public sector pay isn’t always lower - that’s a myth. Public sector job security is also better along with pension benefits.