Defined BenefitDec 5 2022

NHS staff offered ‘partial retirement’ with scheme eligibility expanded

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NHS staff offered ‘partial retirement’ with scheme eligibility expanded
Pexels/George Morina

It is proposing an amendment to the 1995 section regulations, to allow members to partially retire and claim up to 100 per cent of their 1995 section benefits while continuing to work and accrue more pension in the 2015 scheme.

Under this plan, on reaching the minimum pension age – which is currently 55 – members will become eligible to partially retire if they lower their pensionable pay by at least 10 per cent.

For GPs, a 10 per cent decrease in commitment would be required. Members with a protected minimum pension age of 50 would be able to partially retire from the age of 50.

Under the 2008 and 2015 scheme regulations, members may only claim a maximum of 80 per cent of their benefits. Under the new proposals, members who partially retire would be able to draw down up to 100 per cent of their 1995 section benefits as part of partial retirement.

The rules would be amended to allow for maximum drawdown of 100 per cent – up from 80 per cent – for the 2008 and 2015 sections.

‘Doctors will still have to consider reducing the work they do’

The government will also lift limits on the hours that recently retired staff can work, which currently act as a barrier for those who want to return to the NHS. 

Retired staff will also be allowed to rejoin the scheme, while staff working in primary care networks, such as GPs and general practice staff, will be able to access the scheme. Previously, these workers have had to apply for time-limited access on an ad-hoc basis. 

The government committed to “fixing the interaction between the pensions tax system and inflation to ensure senior clinicians have more headroom against the £40,000 pension tax annual allowance”. 

“This means senior doctors are either less likely to receive a tax charge, or will receive a smaller tax charge, reducing the likelihood of early retirement,” it continued.

The government intends for the pension input amount – which is the growth in pension savings during a tax year – to only consider growth in pension savings above inflation. The opening value would be uplifted by the consumer price index from the previous September when calculating this amount.

The date that the annual in-service revaluation is applied to 2015 scheme-earned pension would be moved from April 1 to April 6 from next year, which would align the CPI used for determining the pension input amount – meaning that the calculation will only consider above-inflation pension savings growth.

Sharma added: “The partial retirement option and greater flexibility for recently retired doctors returning to the workforce have potential benefits, and in particular will standardise retire and return arrangements.