Unions say health service workers are up in arms

In addition, workers' pensions may be based on their career's average pay level and not on their final salary.

The NHS employers group said this could benefit workers and it would now start consulting with staff and unions.

Earlier, health service union Unison said its members had reacted with "anger and dismay" to the plans.

Retirement age

The NHS employers group has tabled a number of proposals aimed at increasing workers' retirement ages and reforming the pension system.

Our aim had always been to ensure the NHS Pension Scheme meets the needs of a modern NHS and its staff David Jordison, chair NHS pension review

New employees joining from 2006 would be asked to work up to the age of 65, while existing employees who have not hit 60 by 2013 will be required to work until they 65 before retiring.

In addition, the current final salary pension, payable to workers at 60 years of age, would be replaced.

The two alternative options the group put forward were:

• A pension based on the average career earnings of the employee
• An enhanced final salary scheme that would see members earning 1/60th of their final salary for each year of service, as opposed to 1/80th at present.

Under the proposals both types of pension would be payable at 65.

Flexibility

The NHS employers group said its proposals would lead to greater flexibility for workers.

Staff choosing to transfer into the new pension fund would be allowed to carry on working beyond the age of 65 in return for a better pension.

Retiring workers would also be able to take 25% of their pension in the form of a one-off lump sum, the group said.

A cost cutting measure rooted in the belief that people are living longer and there is a pensions crisis Malcolm Wing, Unison spokesman

"Our aim had always been to ensure the NHS Pension Scheme meets the needs of a modern NHS and its staff, by making benefits more appropriate for today's workforce," David Jordison, chair of NHS employers pension review, said.

Earlier Malcolm Wing, Unison spokesman, told the BBC that the proposals "are a cost-cutting measure rooted in the belief that people are living longer and there is a pension crisis, which is largely of the government's own making".

Mr Wing added that nurses, ambulance staff and other NHS workers had reacted with "anger and dismay" to the government's plan, which he believed would make it more difficult to recruit and retain staff.

Instead of simply raising the retirement age from 60 to 65, the union called for workers to be allowed to retire at any time of their choosing between the ages of 60 and 70.

"We want more flexibility in the current arrangements. A flexible decade of retirement makes sense," Mr Wing said.

Health service unions will meet on Tuesday to discuss their response to the proposals.

One union, Amicus, which represents 80,000 NHS workers, said it would support a day of action in February to protest the plans.

Government plans

The NHS employers group had been asked by the Department of Health to review the NHS pension scheme.

The proposals are yet to get the green light from the government and a three month period of consultation with staff and unions will start from Monday.

Last month, the government published similar plans for the civil service. At the time, the government said the measures were about making the pensions system fairer, particularly for the lower paid, and not about saving cash.

The replacement of a final salary pension with one based on the average earnings over a person's entire career would reduce the gap between the pensions earned by lower paid staff and senior management, the government said.

The British Medical Association will be collecting the views of doctors to feed into its formal response.

Dr Andrew Dearden, chairman of the BMA Pensions Committee said : "This is a fundamental change to doctors' terms and conditions of employment.