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.
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.
These include options for partial retirement and pensionable re-employment in the 2008 section and 2015 scheme.
Industry welcomes extension
Graham Crossley, NHS pensions expert at Quilter: “It is very pleasing to see that following pressure from the industry the DHSC has opened a consultation into extending the suspension of the abatement rules, which if not changed will mean doctors and nurses who have returned to the NHS to help with the pandemic will suffer a penalty on their pension.
“The temporary suspension comes to an end on 24th March 2022, at which point NHS workers’ pension will be reduced pound for pound if their earnings plus the ‘unearned’ element of their NHS pension, exceed their pre-retirement NHS pensionable earnings, which is called ‘abatement’.”
In January, a Freedom of Information request by Quilter found that over 7,000 doctors and nurses could be forced out of the NHS at a critical time if these rules were not extended.
Crossley said it “laudable” that the department has read and acted on these warnings including Quilter’s letter to the health secretary which cautioned the government that there could be an NHS exodus if the return of abatement is not extended beyond March 2022.
“Sadly, there will be some staff who have already left the NHS in anticipation of there being no change to these rules and it’s a shame it has taken so long to get here,” he said. “Many medical staff will be buoyed by the opportunity to keep helping the NHS at this critical time.
“However, there are concerns around the 31 October 2022 extension. The existing March deadline caused headaches with workforce planning in January and February. By moving the deadline to October, it gives doctors and nurses very little sense of security and it risks similar job planning issues in August. But this is no doubt good news for the NHS.”
Meanwhile, last week NHS staff were given the option to make a late application to have their scheme cover annual allowance tax bills after the industry warned many GPs would not have completed paperwork in time.
Following industry pressure in recent months, NHS England and NHS Improvement said it would accept late applications for its annual allowance compensation policy claim form, with the previous deadline set for the end of last week.
It said late forms will be accepted where, through no fault of their own, clinicians have not yet received a pension savings statement for 2019/20.
“They will be able to submit their application for six months after receiving their pension savings statement,” it said. “If a clinician is submitting their form late, they should follow the current instructions regarding authorisation of their application, which are outlined on the application form.”
sonia.rach@ft.com
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