Alan Milburn, the Chief Secretary to the Treasury, has ordered a wide- ranging review of the "scandal" of 25,000 public-sector staff retiring early every year. Ministers were determined to act after a series of high- profile cases where public employees were found to have taken large pension payouts even though they appeared to be perfectly healthy. One policeman, Tony Lundy, was photographed running in a marathon despite having been declared unfit to face a disciplinary inquiry into allegations of corruption.
The Treasury is particularly concerned at the wide variations in sickness levels between different professions and want to cut the soaring costs. Each early retirement costs an average of pounds 35,000 in pension payments.
In the five years to 1997, 73 per cent of all fire officer retirements were on ill-health grounds, 49 per cent of police, 33 per cent of National Health Service staff, 23 per cent of teachers and 22 per cent of civil servants. In some councils, more than half of all staff retire early, while in others the rate is just 10 per cent. Similarly, rates between police forces vary from 60 per cent to 20 per cent.
Treasury officials believe the higher rates cannot simply be attributed to the dangers or physical nature of certain jobs. Just 6 per cent of armed forces personnel retire on ill-health grounds, they point out.
Nearly one-quarter of all medical retirements are for "psychiatric" problems, their highest level yet, and ministers want to find out how stress can be better addressed. The review, looking at different styles of pension schemes and staff management, will be conducted by a working group including representatives of the Confederation of British Industry, Trades Union Congress, pension fund managers and personnel experts. They have been told to report to Mr Milburn with their conclusions and recommendations for best practice by early next year.
Mr Milburn said staff had a right to retire early as long as there were valid health reasons. However, the sheer scale of the problem needed investigation. Ill-health retirements have hit record levels during the Nineties. Such retirements among NHS male administrators in their thirties and forties rose fourfold between 1969 and 1994.
Sir Paul Condon, the Metropolitan Police Commissioner, has publicly noted that in 1995-96, more than 70 per cent of officers facing investigation or disciplinary charges retired on medical grounds. Detective Superintendent Lundy retired on medical grounds as he was being investigated for a number of very serious allegations, including corruption. He is now living in Spain, receiving an enhanced pension.Reuse content