Pension rules extended to October for returning NHS staff

Pension rules extended to October for returning NHS staff

The government has extended its relaxation of pension rules by seven months for NHS staff returning to work so they are not hit by reduced pension payments. 

In a consultation today (February 15), the Department of Health and Social Care proposed amendments to the NHS Pension Scheme regulations to continue the suspension of restrictions on return to work introduced by the Coronavirus Act. 

The coronavirus bill, which includes temporary emergency legislation to tackle the Covid-19 crisis, includes measures to help returning NHS staff receive full pension payments.

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The proposed amendments to the NHS Pension Scheme regulations published today, would replicate the temporary suspension of the 16-hour rule, abatement of members who retire and return to work between age 55 to 60 and abatement of drawdown members who claim a portion of their benefits and continue working.

Under normal circumstances, retired doctors or nurses returning to work could see their NHS pension reduced under a process known as “abatement”. 

But in March 2020, the government proposed to temporarily suspend the abatement rules as it urged retired medical professionals to consider re-entering the workforce to help tackle the coronavirus outbreak. 

Under the so-called “16-hour rule” members of the scheme saw their pension suspended if they returned to work and committed to more than 16 hours per week within the first four weeks.  

The suspension of this rule allowed for staff to return to work immediately after retirement and continue their existing working commitments, or increase them, while still receiving their full pension benefits. 

The bill was set to end on March 24, 2022 however in the proposals outlined today, it will take effect from March 25. 

The Department of Health and Social Care said a suspension until October 31 will ensure that the NHS workforce benefits from increased capacity from retired and partially retired staff during the ongoing Covid-19 response. 

It stated: “However, a temporary suspension also ensures the easements remain linked to the pandemic response period only and expire at the correct time once the need for emergency provisions has ended.

“The further continuation of the easements allows the NHS sufficient time to deal with the Omicron variant. In fairness to all scheme members and the public purse, it is right that abatement applies under normal circumstances to restrict the benefits provided to a closed cohort of staff.”

The Department of Health and Social Care said it recognises that work-life balance and flexibility around retirement options are key concerns for older staff. 

NHS England and Improvement has also launched an initiative focused on employers making flexible employment offers to late career staff. 

It explained that while the department keeps the ways in which pension scheme design can support this under review, a major element of the campaign is leveraging the scheme to support retention by promoting to staff the value of continuing to build up their pension and to employers the value of using existing flexibility around working patterns and retirement.