RETIREMENT POLICY. Version Version 2. Ratified By. NHS West Cheshire Clinical Commissioning Group Governing Body. Date Ratified

Transcription

1 RETIREMENT POLICY Version Version 2 Ratified By Date Ratified Author(s) Responsible Committee / Officers NHS West Cheshire Clinical Commissioning Group Governing Body January 2014 Governing Body Cheshire and Merseyside Commissioning Support Unit Senior Management Team Date Issue December 2013 Review date March 2016 Intended Audience All Clinical Commissioning Group staff March 2015 Page 1 of 13

2 Further information about this document: Document name Category of Document in The Policy Schedule Author(s) Contact(s) for further information about this document Corporate Clare Dooley Corporate Governance Manager This document will be read in conjunction with Published by Copies of this document are available from NHS West Cheshire Clinical Commissioning Group 1829 Building Countess of Chester Health Park Liverpool Road Chester, CH2 1HJ Website: Copyright, All Rights Reserved Version Control: Version History: Version Number Reviewing Committee / Officer 1.0 NHS West Cheshire Clinical Commissioning Group 2.0 NHS West Cheshire Clinical Commissioning Group Date 16 January 2014 March 2016 March 2015 Page 2 of 13

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5 Contents Page no 1 Introduction 6 2 Scope 6 3 Policy Statement 6 4 Responsibilities 4.1 Responsibility of the Clinical Commissioning Group Responsibility of Managers Responsibility of Employees Responsibility of Human Resources 7 5 Retirement Clinical Commissioning Group Retirement Age NHS Pension Retirement Age and Benefits Special Class Status 8 6 Notice Requirements 5 7 Flexible Retirement Options Option 1: Conventional Retirement Option 3: Stepping Down Option 4: Retire and Come Back Option 5: Draw Down 10 8 Ill Health Retirement 11 9 Exceptions to the Policy The NHS Pensions Scheme Monitoring 12 Appendix 1 Special Class Status 13 March 2015 Page 5 of 13

6 1. INTRODUCTION 1.1 The Clinical Commissioning Group seeks to ensure equality of employment for all staff. Our aim is to promote the benefits of employing a mixed-age workforce that includes older and younger people. As part of this, we seek to make decisions about recruitment, training and retention that do not discriminate against any individual because of their age. 2. SCOPE 2.1 This policy covers retirement options available to all employees of the Clinical Commissioning Group. 3. POLICY STATEMENT 3.1 The purpose of this policy is to outline the arrangements for staff planning to retire. Choosing the right time to retire can be a difficult decision; therefore it is the Clinical Commissioning Group s intention to make available a number of options to facilitate the transition from work to retirement that will benefit both the organisation and individual employees. Retaining the skills and expertise that many employees have to offer will enable the Clinical Commissioning Group to maintain an effective and quality service, whilst individuals will be able to prepare for a new way of life with a range of choices available to them without affecting their pension rights. 4. RESPONSIBILITIES 4.1 Responsibilities of the Clinical Commissioning Group Establishing a retirement framework that is fairly and consistently applied that meets the needs of the individual and the Clinical Commissioning Group. 4.2 Responsibilities of Managers Ensuring employees are aware of the Clinical Commissioning Group policy in relation to flexible retirement and to take appropriate action under the policy guidance and procedure to support employees Ensuring a regular detailed conversation occurs, taking into consideration the needs of the service and the wishes of the employee. 4.3 Responsibilities of Employees Being aware of flexible retirement options, available in planning retirement from the Clinical Commissioning Group Notifying their manager at least four months in advance of their intended retirement date. March 2015 Page 6 of 13

7 4.4 Responsibilities of Human Resources Providing advice and guidance to managers and employee to ensure fair and consistent approach across the Clinical Commissioning Group in dealing with any request. 5. RETIREMENT 5.1 Clinical Commissioning Group Retirement Age From 1 st October 2011 an employer is not be able to compulsorily retire an employee who is aged 65 or over unless it can be objectively justified e.g. medical reasons As an alternative to formal retirement, staff may consider flexible retirement and discuss with their manager various options to extend working. Whilst all such requests will be considered seriously there can be no guarantee that the Clinical Commissioning Group would be able to accommodate flexible working and each case will be considered on an individual basis. 5.2 NHS Pension Retirement Age and Benefits The normal pension age is the age that you can retire from NHS employment and have your pension paid without reduction or enhancement. There are two sections to the NHS Pension Scheme, the 1995 Section and the 2008 Section. The actual age that applies to you will depend on which section of the Scheme you are in and your status Section The 1995 section of the NHS Pension Scheme allows normal age retirement at age 60. Members who joined the Scheme prior to 6 th April 2006 will have their minimum retirement age as age 50. Members who joined from 6 th April 2006 onward will have their minimum retirement age as 55. Members can opt for voluntary early retirement from their minimum retirement age, however, benefits will be reduced to cover the extra cost of receiving a pension for a longer period Section The 2008 section of the NHS Pension Scheme allows normal age retirement at age 65. Members can opt for voluntary early retirement from age 55, however, benefits will be reduced to cover the extra cost of receiving a pension for a longer period Benefits Staffs who are members of the NHS Pension Scheme will receive retirement benefits, which consist of an annual pension paid for life and a tax-free lump sum. The amount received depends on the individual s pensionable pay, how long they have been a member of the scheme and whether they have worked part time. March 2015 Page 7 of 13

8 5.2.5 With effect from 1 April 2008, the maximum membership age is 75 with a membership limit of 45 years. 5.3 Special Class Status There are people in certain staff groups with Special Class Status (see Appendix 1), who were members of the NHS Pension Scheme before 6 March 1995 and who have qualifying service. They can retire with full pension benefits from age 55 although the same conditions with regard to retirement before age 55 still apply. Special Class Status is no longer granted to new entrants to the Scheme on or after 6 March Re-entrants to Special Class type employment retain the status in the Scheme if they do not have a break in pensionable scheme membership of 5 years or more. 6. NOTICE REQUIREMENTS 6.1 In order for an NHS pension to be paid at the individuals retirement date, it is necessary for the Pensions Advisor at Payroll to be given four months notice of the intended date of retirement. It is the employee s responsibility to ensure they contact the Pensions Advisor at Payroll and the NHS Pensions service in a timely manner. 6.2 The Clinical Commissioning Group will require four months notice (or employees contractual notice if this is greater), in writing, of their intention to retire, in order to ensure that the relevant documentation is processed. 6.3 Employees who are not members of the NHS Pension Scheme should give their contractual notice. 7. FLEXIBLE RETIREMENT OPTIONS 7.1 There are various options available to all staff that are planning for flexible retirement. Flexing retirement carries benefits for the service creating a richer staff resource with better utilisation and transfer of skills and knowledge from experienced staff, whilst staff are able to take advantage of a range of retirement options. These include easing down into retirement, part-time, fulltime or limited period working after retirement. In doing so, they may also enjoy an increased income compared to conventional retirement. 7.2 Option 1: Conventional Retirement This option allows staff to retire on their chosen date. This option has no impact on benefits If an employee wishes to request to conventionally retire they must put the request in writing to their manager four months before the date they wish to retire. The manager must complete an ESR4 (leavers form) which should be sent to Human Resources, fourteen weeks in advance of the retirement date. Employee should contact the Pensions Advisor to request the retirement application form AW8 to receive benefits from the NHS Pension Scheme at March 2015 Page 8 of 13

9 least four months in advance of retirement date. It is essential that all information given to the Payroll and Pensions Team is complete and accurate as the final pay and the initial lump sum pension payment is estimated and paid on the basis of details given on the pension application form The retirement date is the last day of service after all outstanding leave has been taken. 7.3 Option 3: Stepping Down In some cases, it might be the pressure and responsibilities of the current role that an employee wants to reduce without leaving work altogether. If so, they can look to step down into a less demanding job on lower pay, with the opportunity of working less hours and/or days, but in areas which still make good use of their skills and experience Within the Clinical Commissioning Group, there may be other posts that can be pursued on a voluntary basis and such a move can be particularly valuable where the member of staff has critical skills and experience to contribute to patient care and where the new role facilitates transfer of this experience to other staff Impact on benefits The level of pensionable pay is protected for the calculation of pension benefits for staff that are over the minimum retirement age Relevant to the members of 1995 section: If a member is over the minimum retirement age and their pay is reduced by a minimum of 10% they can apply for the higher rate of pay to be protected for pension purposes. Members must apply for protection within 15 months of reduction. Benefits are calculated on the basis of 1/80th of the best of the last three year s pensionable pay for each year of pensionable membership Relevant to the members of 2008 section: If a member is over the minimum retirement age 55 they can consider moving towards retirement by switching to a less demanding role. The member s reckonable pay will still consider any higher earnings they may have had in the 10 years prior to their retirement date. Benefits are calculated on the basis of 1/60th of annual average of best three consecutive year s pensionable pay, in last ten years The member of staff will need to apply for vacancies that they feel would facilitate this option via the normal recruitment route. There is no obligation for the Clinical Commissioning Group to create a role to facilitate this. 7.4 Option 4: Retire and come back Members who have reached the minimum retirement age can opt to retire, take all their pension benefit and return to NHS employment. This includes return to full-time, part-time or for short periods in line with service need. March 2015 Page 9 of 13

10 7.4.2 The conditions attached to this option are: Anyone aged under 60, with the exception of those who have taken an actuarially reduced pension, cannot earn more through pension and postretirement employment than their salary at retirement. Where this occurs, the pension is reduced to bring the total income down to the required level Impact on benefit Once retired, staff will no longer be members of the pension scheme and will therefore not build up any further pension entitlement. The employee must have a break in service of at least 24 hours before being re-employed, in order to comply with NHS pension scheme requirements Certain Terms and Conditions under Agenda for Change will be affected including occupational and statutory redundancy payment. For further information please refer to the Terms and Conditions Handbook Relevant to the members of 1995 section: If a member joined the 1995 section before 6 April 2006 the minimum retirement age is 50. If the member joined the 1995 section on or after 6 April 2006 their minimum retirement age will change to 55 on 6 April If a member returned to the Scheme after 6 April 2006 this may also apply to them. Pensionable re-employment only if the member retires on ill-health grounds, draws a pension and returns to NHS employment under age 50. If the member retires after 1 April 2008 they have to take a break in service before returning back to employment and work less than 16 hours per week in the first calendar month to avoid their pension being suspended. Abatement applies if the member is re-employed under age 60 and pension was not reduced due to voluntary early retirement Relevant to the members of 2008 section: The minimum retirement age in the 2008 section is 55. If the member retires after 1 April 2008 they have to take a break in service (see above) before returning back to employment but their pension will not be suspended if they work more than 16 hours per week in the first calendar month. Abatement applies if the member was re-employed under age 65 and pension was not reduced due to voluntary early retirement Staff choosing this option will need to submit in writing their request to retire to their manager stating the desired retirement date. The manager will then meet with the member of staff within three weeks of the date of their request to discuss the proposed arrangements (i.e. type of contract, hours of work etc.). The manager will then consider the request in terms of meeting the individuals and organisational needs. If agreed, staff will need to submit 4 months notice to the Pension s Agency. If agreed the manager will need to complete an ESR4 (leavers form) and recommence the member of staff via an ESR1 (starter form). 7.5 Option 5: Drawn Down This is only open to members of the 2008 section of the NHS Pension Scheme. This option allows members to take part of their pension benefits whilst continuing in NHS employment. March 2015 Page 10 of 13

11 7.5.2 Impact on benefits If members are over the minimum retirement age 55 and their pay is reduced by a minimum of 10% they can partially retire and take some pension benefits. Members can take 20% - 80% of their pension entitlement and continue to build up future membership. The member s benefits would be reduced if they are paid before their 65th birthday. Pensionable pay must remain reduced for at least a year otherwise they will cease to be eligible for the pension they have taken. Members can draw dawn benefits twice before retiring completely This is a relatively new process and employees are advised to contact the Pension s Advisor prior to making a decision to obtain projections relating to impact on benefits. When taking this option forward the standard notification to the NHS Pensions Agency of four months applies. 8. ILL-HEALTH RETIREMENT 8.1 Employees in the NHS Pension Scheme may be eligible to apply for Ill Health Retirement if they have been in the pension scheme for at least 2 years, employees with 5 years in the scheme may receive an enhanced pension. Approval is decided by the pensions agency based on medical opinion. It is given in cases where, due to ill health, the employee will be permanently unable to return to their current role. 8.2 The employee must initiate the process of applying for ill health retirement by putting the request in writing to their manager. For further details, please see Attendance Management Policy. 9. EXCEPTIONS TO THE POLICY 9.1 This Policy does not override the National Health Services superannuation regulations and any benefits that may be payable, including ill-health retirement benefits. 10. THE NHS PENSION SCHEME 10.1 The Pension Team can be contacted for information on the NHS Pension Scheme and to discuss queries related to an employee s retirement, including estimates for individuals who are considering retirement in the near future However, the retirement package selected may affect an individual s pension and anyone coming up to retirement is advised to check their terms and conditions before finalising their arrangement by contacting the NHS Pension Scheme Helpline The helpline is open Monday to Thursday, 8.30am pm and Friday, 8.30am- 4.30pm. Alternatively the Agency can be contacted at March 2015 Page 11 of 13

12 Address: NHS Pensions Division Hesketh House Broadway Fleetwood Lancashire FY7 8LG 10.3 Employees who do not have a NHS pension can contact The Pension Service, for details on state pensions by visiting MONITORING 11.1 The fair application of this policy will be monitored by Human Resources. The policy will be reviewed every three years unless changes to employment legislation require a review to take place sooner. March 2015 Page 12 of 13

13 APPENDIX 1 SPECIAL CLASS STATUS Certain groups of staff who were members of the NHS Pension Scheme before 6 March 1995 are known as the special classes. They are: Nurses, physiotherapists, midwives, and health visitors. Student nurses and occupational health nurses are included in the above but nursery nurses and physiotherapy helpers are not included. Female members of the special classes are entitled to retire with benefits from age 55, provided that their last 5 years membership prior to retirement is in one of these jobs. Men in any of these jobs can retire from age 55 provided that their last 5 years membership prior to retirement is in one of these jobs, but their benefits will only be based on their membership from 17 May Benefits for membership before that date will not be paid until age 60 unless the member applies to take a reduction in these benefits. Special class status will not apply to anyone who starts working in one of these jobs for the first time on or after 6 March Further information is given in the booklet A Guide to the NHS Pension Scheme'. Confirmation of whether an employee has Special Class Status can be obtained from the Pensions Team. March 2015 Page 13 of 13