Govt prolongs relaxation of NHS pension rules

Govt prolongs relaxation of NHS pension rules

The government will extend amendments to the NHS Pension Scheme designed at boosting health worker numbers, prolonging measures that were introduced in response to the coronavirus pandemic.

The measures were brought in in recognition of three scheme rules that limit the ability of some retired NHS staff to work.

The amendments suspend a 16-hour weekly limit on working hours for members of the scheme’s 1995 section, along with barriers for some staff aged 55 to 60, who have claimed their pension benefits, from returning to work without having their pension benefits suspended.

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The Department of Health and Social Care ran a brief consultation between August 28 and September 12 to consider extending these amendments beyond their scheduled expiry on October 31 2022.

With 98 per cent of respondents agreeing that the easements should continue beyond the end of October, the lifting of the 16-hour limit will now be prolonged until March 31 2023. Additional proposals for its permanent removal will be made from April 1 2023.

The suspension of ‘abatement’ for drawdown members of the 2008 section and 2015 scheme will be suspended to March 31 2023. Abatement exemptions for ‘Special Class Status’ members will, meanwhile, be extended until March 31 2025.

These are chiefly nurses, physiotherapists, midwives and health visitors who were members of the scheme before March 1995, and who were eligible to retire at age 55 rather than 60 with no actuarial reduction in their pension. 

SCS abatement will return

The government received 1,299 responses to its consultation, including from organisations such as the British Medical Association and NHS Employers. The easements were originally extended in February until the end of October.

Some respondents argued that the relaxation in rules should temporarily carry on beyond the end of March 2023, or the relevant scheme rules should be removed entirely. Thirty-two per cent of respondents agreed with the suggested duration of the extension, with 68 per cent against.

The NHS Pension Scheme Advisory Board said that the 16-hour rule limiting 1995 members’ ability to work should be scrapped entirely, on the basis that “it serves little practical purpose for staff, employers, or the pension scheme”.

The remaining easements should be extended beyond the end of March, it added. The Royal College of Nursing was in favour of extending the easements, supporting a lengthier extension than those proposed.

NHS Employers backed permanently removing the 16-hour limit. It also argued for the removal of ‘abatement’ for ‘Special Class Status’ members beyond the end of March in order to give employers time to address backlogs and find other ways to retain staff. 

The government countered that “in the longer term there are good policy reasons for abatement applying to SCS members who return to work before age 60”.

“There have been concerns from stakeholders that the eventual reintroduction of abatement would force returning SCS members to retire,” it said.