Retirement Policy
Worcestershire Health and Care NHS Trust Retirement Policy Document Type Unique Identifier Document Purpose Document Author Target Audience Responsible Group Human Resources Policy HR-HACW-06 To outline the process to be followed for all employees retiring or requesting early or flexible retirement. Chris Nash, Associate Director of Human Resources and Workforce Transformation All Worcestershire Health and Care NHS Trust staff Quality and Safety Committee Date Ratified 1 st March 2012 This policy was agreed by the JNCC prior to the ratification process being the responsibility of the Quality and Safety Committee. In future any amendments to the policy will be ratified by the Quality and Safety Committee Expiry Date 1 st March 2015 The validity of this policy is only assured when viewed via the Worcestershire Health and Care NHS Trust website (hacw.nhs.uk). If this document is printed into hard copy or saved to another location, its validity must be checked against the unique identifier number on the internet version. The internet version is the definitive version. If you would like this document in other languages or formats (i.e. large print), please contact the Communications Team on 01905 760020 or email communications@hacw.nhs.uk. 2
CONTRIBUTION LIST Key individuals involved in developing the document Name Human Resources JNCC Designation Human Resources Director Staff Side Chair Circulated to the following for consultation Name Human Resources JNCC Designation Senior HR Managers and HR Managers JNCC Staff Side Committee and Policy Sub-Group Accessibility Worcestershire Health and Care NHS Trust has a contract with Applied Language Solutions to handle all interpreting and translation needs. This service is available to all staff in the trust via a free-phone number (0800 084 2003). Interpreters and translators are available for over 150 languages. From this number staff can arrange: Face to face interpreting Instant telephone interpreting Document translation British Sign Language interpreting Training and Development Worcestershire Health and Care NHS Trust recognises the importance of ensuring that its workforce has every opportunity to access relevant training. The Trust is committed to the provision of training and development opportunities that are in support of service needs and meet responsibilities for the provision of mandatory and statutory training. All staff employed by the Trust are required to attend the mandatory and statutory training that is relevant to their role and to ensure they meet their own continuous professional development. 3
Worcestershire Health and Care NHS Trust Retirement Policy CONTENTS Page No. 1 Introduction 5 2 Purpose 5 3 Scope 5 4 Equality Statement 5 5 Definitions 5 6 Responsibilities 8 7 Normal Pensionable Age Retirement Process 10 8 Flexible Retirement Request 10 9 Pre-Retirement Course 11 10 Further Information and Advice 11 11 Policy Review 11 12 Associated Documents 12 Appendix 1 Sample Retirement Letter 13 Appendix 2 Retirement Process Flow Chart 14 4
Worcestershire Health and Care NHS Trust Retirement Policy 1. Introduction 1.1. The Worcestershire Health and Care NHS Trust (WHCT) are committed to ensuring that an effective, consistent and fair procedure exists when dealing with retirement. 1.2. WHCT s Retirement Policy is based on the principles within the Employment Equality (Age) Regulations 2006 and the current ACAS guidance Age and the Workplace. 1.3. As the Trust does not operate a mandatory retirement age, the decision about whether to retire is a matter for each individual employee. As long as an individual wants to, and is able to, carry on working beyond 65, it is their legal right to do so. No dismissal will take place on the grounds of age. If an individual is not able to work, this will be dealt with via the sickness or managing concerns about performance policy and is unrelated to age. 1.4 Employees will no longer receive notification of retirement. However, staff considering it are to advised to check their financial position by using NHS Pensions website before making a final decision (contact details are located in section 10 of this policy). 2. Purpose 2.1. To outline the process to be followed for all employees retiring or requesting early or flexible retirement. 2.2. To ensure a proactive approach is taken towards managing retirement to help maintain operational efficiency. 2.3. To ensure all employees retiring from WHCT are aware of the options available to enable them to make an informed choice and are given the facilities to make proper preparations for their retirement. 3. Scope 3.1. This policy covers all WHCT employees, irrespective of whether or not they are members of the NHS Pension Scheme (the Scheme). 4. Equality Statement 4.1. The WHCT recognises the diversity of its staff and undertakes to apply this policy equitably and fairly irrespective of gender, gender identity, disability, race, age, sexual orientation, religion or belief. In the application of this policy the WHCT will recognise its duty to each and every individual employee and will respect their human rights. 5. Definitions 5.1 NHS Pension Retirement Age and Benefits There are two sections of the NHS Pension Scheme the 1995 section and the 2008 section. There are differences between the two sections which determine the age at which an employee can retire with their pension benefits and determine their options for flexible retirement. It is therefore essential that an 5
employee understands which section of the scheme they are in when considering their retirement options. In order to receive benefits from the NHS Pension Scheme, you must terminate your employment and if returning to the NHS have at least a 24 hour break between contracts. Staff who return to work are advised to check what hours restrictions might apply on the NHS pensions web site 5.2 1995 Section of the Pension Scheme Under the 1995 section of the NHS Pension Scheme, normal retirement age is at age 60. The minimum retirement age is 50 (voluntary early retirement) however pension benefits are reduced to cover the extra cost of receiving a pension for a longer period. For any member who joined the NHS Pension Scheme for the first time on or after the 6 th April 2006, or who rejoined on or after 6 th April 2006 and had previously left before 1 st April 2000, minimum retirement age is now 55. 5.3 Special Class Status (within 1995 section) Nurses, health visitors, physiotherapists and mental health officers who were members of the NHS Pension scheme before 6 th March 1995 (collectively described as Special Classes ) can retire with unreduced pension benefits from age 55, subject to qualifying service as long as they completed their last 5 years employment as a member of the Special classes. Special class status is no longer granted to new entrants to the Scheme on or after 6 th March 1995. Reentrants to special class type employment retain the status in the Scheme if they do not have a break in pensionable employment of any one period of 5 years or more. If a member of the special classes retires before the age of 55 their benefits will be reduced based on normal retirement age 60. 5.4 2008 Section of the Pension Scheme The 2008 section of the NHS Pension Scheme allows normal 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. 5.6 Ill-Health Retirement If an employee has at least 2 years Scheme membership and is too ill to work in their present job they may be able to retire early and take their pension benefits. There are two tiers of ill health retirement and the benefits paid depend on whether an employee is capable of undertaking employment elsewhere. Tier 1 unable to do current job due to permanent ill health Tier 2 Unable to carry out regular employment due to permanent ill health Ill health retirement can apply before age 60 in 1995 section and before age 65 in the 2008 section and is subject to the approval of the medical advisors to NHS Pensions. Ill Health retirement is managed in accordance with the Trust Sickness Policy. 6
5.7 Flexible Retirement Options Employees can phase-in the transition from work to retirement; within the Trust there are 5 possible options: 5.7.1 Option 1 - Wind down Defer retirement and move into part-time work, working fewer days or hours than in the current post but on the same Band. Pensions for part time staff are calculated on the whole time equivalent salary, so moving from full time to part time work, rather than retiring should not reduce the level of pensionable pay for the calculation of pension benefits. However, it will reduce the rate at which members build up future membership which in turn will reduce pension benefits. It should also be noted that a difference may occur where allowances (e.g. unsocial hours) are not attached to the part-time role. If this option is taken, the application must be made using the Flexible Working Policy. 5.7.2 Option 2 - Step down With agreement of the Trust the employee may defer retirement and step down into a lower graded and therefore lower paid and less demanding post, which will still make use of their skills and experience. 1995 section If a member is over the minimum retirement age of 50 (55 for some members) and their full time 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 to SBS Pensions for protection within 15 months of reduction. Members cannot apply until they have been in the post for one year. They then have a 3 month window in which to apply. Members are advised to check with the HR Department or on the Pensions web site, www.nhsbsa.nhs.uk/pensions 2008 section If a member is over the minimum retirement age of 55 they can consider moving towards retirement by switching to a less demanding role. The member s reckonable pay will still take account of any higher earnings they may have had in the 10 years prior to their retirement date. 5.7.3 Option 3 - Retire and come back Retire, receive a pension and seek to return to NHS employment. There may be restrictions on the amount that can be earned on returning, as your pension can be affected. Further details are available via the NHS pensions website www.nhsbsa.nhs.uk/pensions Employees wishing to return to work after retirement will have to apply for the vacancy when advertised. Employees may apply for any approved and funded vacancy to return to. All vacancies will be subject to WHCT 7
recruitment procedures and must be adhered to. If a vacancy occurs after the retirement date, you will be treated as an external applicant. 5.7.4. Option 4 Draw down (available to members of the 2008 section only) This option allows members to take part of their pension benefits whilst continuing in NHS employment. If members are over the minimum retirement age of 55 and their pay is reduced by a minimum of 10% they can partially retire and take some pension benefits. Members can take between 20% - 80% of their pension entitlement and continue to build future membership. The member s benefits will be reduced if they are paid before their 65 th 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 down benefits twice before retiring completely. 5.7.5. Option 5 Late Retirement 1995 section If a member chooses to retire after their 60 th birthday, they can continue to earn pension benefits up to age 65 for special classes, age 75 for other members, or until the member reaches 45 calendar years membership but there are no provisions to increase any of the benefits because they are paid late. 2008 section 6 Responsibilities If a member chooses to retire after their 65 th birthday, they can continue to earn pension benefits up to age 75, the pension benefits earned before age 65 will be increased by the application of late retirement factors, the later they retire the greater the increase. 6.1 Employees: 6.1.1 Be familiar with, and adhere to, this procedure; 6.1.2 Inform their manager of their wish to retire in writing, between six and no less than three months before their planned retirement date, ideally giving as much notice as possible to allow future planning by their Line Manager. This should ensure there is sufficient time to process and pay their pension on time but staff are encouraged to give as much notice as possible to ensure there is no delay in the payment of a pension. 6.1.3 Inform their manager of their chosen retirement options as soon as possible; 6.1.4 Maintain regular contact with their manager during the retirement process. 8
6.1.5 Request an estimate of pension benefits (for age retirements) from NHS SBS at least three months prior to retirement date. 6.2 Managers: 6.2.1 Ensure they understand and correctly deploy this procedure equally, fairly and consistently to all employees; 6.2.2 Meet with employees requesting to retire and advise on options available in conjunction with the Trust s Payroll Provider and HR Departments; 6.2.3 Notify Payroll, SBS Pensions and HR Department of any retirements in order to ensure the necessary paperwork is completed in time (notification should be at least three months before the employee wishes to retire) or pension could be late; 6.2.4 Maintain regular contact with the employee during the retirement process; 6.2.5 Ensure confidentiality is maintained at all times when operating this policy; 6.2.6 Consider the impact of retirement in light of their workforce plan and succession planning 6.2.7 Managers must also ensure they apply to Human Resources for a Retirement Certificate. However, any retirement events organised cannot be funded by the Trust 6.2.8 Ensure that employees considering or requesting retirement are made aware of the dates of SBS Pensions Information sessions that are run in the Trust, as well as the inhouse general Pre Retirement sessions which will be available and granted study leave to attend them 6.3 Human Resources: 6.3.1 Advise and facilitate in matters pertaining to the retirement process; 6.3.2 Provide advice on the application of this policy; 6.3.3 Provide guidance to managers and staff on retirement issues; 6.3.4 Monitor age profiles across the Trust and identify pending/potential retirements; 6.3.5 Ensure that estimates for ill health retirement benefits are sought on behalf of the employee. 6.4 Occupational Health: (where ill-health retirement is sought): 6.4.1 Understand the nature of the affected employee s job; 9
6.4.2 Review requests for ill health retirement and make recommendations based upon the employee s contractual duties; 6.4.3 Where ill-health retirement is not appropriate, recommend any necessary reasonable adjustments and/or redeployment as appropriate. 6.5 Payroll and Pensions Providers: 6.5.1 Provide information and guidance to line managers and employees on the pension options available; 6.5.2 Provide information to employees on the financial aspects of any proposed retirement; 6.5.3 Process all necessary paperwork and liaise with NHS Business Services Authority NHS Pensions to ensure timely payment of pension benefits to employees retiring. 7 Normal Pensionable Age Retirement Process 7.1 In order to ensure that pension benefits are paid from the date required, NHS Pensions requires that an employee wishing to retire must inform their line manager of their intention to retire in writing at least three months before the date they wish to retire. It is advisable to give the maximum notice possible to ensure any issues are sorted out and the pension paid on termination. 7.2 As soon as an employee has made the decision to retire, the line manager must meet with them to discuss their decision. 7.3 The line manager must notify Payroll and SBS Pensions of the employee s decision and complete the termination form accurately and on time so as not to delay the payment of the employee s pension benefits (please refer to flowchart in appendix 2). 7.4 Voluntary Early Age Retirement Process 7.5 Depending on the Section of the Scheme to which they belong, an employee may retire at any age after their 50th (or 55th) birthday and prior to their 60th (or 65th) birthday. However the pension benefits paid may be reduced. These reductions also apply to the Scheme members with special class status; if they retire before age 55. An employee wishing to take early retirement from the Trust must make their request in writing to their line manager providing a minimum of three months notice. 7.6 As soon as an employee has made the decision to retire, the line manager must meet with them to discuss the decision 7.7 The line manager must notify Payroll, SBS Pensions and their HR Representative of the employee s decision and complete the paperwork accurately and on time so as not to delay the employee s pension benefits 8 Flexible Retirement Request 8.1 An employee wishing to take advantage of one of the flexible retirement options available in the Trust should read the Flexible Working Policy and notify their manager, of their wishes at the earliest opportunity. The line 10
manager must meet with the employee to discuss their request, and inform the employee in writing of their decision within 7 calendar days of this meeting. 8.2 All flexible retirement options are subject to agreement with the employee s line manager and/or Head of Department and the extent to which it could be accommodated within the Service Delivery Unit. Managers should consider each case in light of individual circumstances and service needs. 8.3 Members of the NHS Pension Scheme should also seek pension information from the SBS Pensions or NHS Pensions as a change in their working hours may affect their final pension benefits. The Service Desk telephone number is 0303 123 1144. 8.4 Upon request from the employee, the HR Representative and/or SBS can make arrangements for pension information to be provided to the employee before they make a final decision. 8.5 The line manager must inform Payroll of the final decision and complete all of the necessary paperwork. 9 Pre-Retirement Courses 9.1 All staff will be entitled to paid leave and reimbursement of expenses to attend the in-house pre-retirement course which will be reintroduced in 2012 as well as the SBS Pensions Information sessions which will be run locally. 9.2 Some Unions also offer courses and you should follow this up with your representative if you are interested. However, paid time off will not be available to attend these and annual leave will need to be taken. 10 Further Information and Advice 10.1 Further information on the application of this policy can be sought from the line manager, HR Representative and/or your Union Representative. 10.2 Members Booklet SD Guide copies of which are available via www.nhsbsa.nhs.uk/pensions. 10.3 Further information on the NHS Pensions Scheme can be found at www.nhsbsa.nhs.uk/pensions. Or via the Member Helpline on 0845 421 4000 and/or via SBS Service Desk. 10.4 NHS Pensions Guides and Associated Fact Sheets can also be obtained from www.nhsbsa.nhs.uk/pensions. 10.5 The ACAS Age and the Workplace, an Employee s Guide can be found at http://www.acas.org.uk/chttphandler.ashx?id=588&p=0 10.6 All NHS Pension Scheme members considering and/or planning retirement should consult the Pensions Officer with SBS) for details of their benefits and/or how their plans may affect future benefits prior to making any final decisions. 10.7 By law, WHCT representatives and SBS Pensions can provide you with all necessary information to make a considered decision but cannot advise staff on their pension options. 11 Policy Review 11.1 This policy is written in accordance with the provisions of the NHS Pension Scheme and is subject to review should those provisions change. 11
12. Associated Documents Flexible Working Policy Equality and Inclusion Policy Sickness Absence Management Policy and Procedure Managing Concerns with Performance Procedure 12
Appendix 1 Our Ref: Date: Private & Confidential Dear Re: NHS Pension Benefits Age Retirement Thank you for your letter received on (Date), in respect of your wish to retire from the Trust on (Date). NHS SBS Pensions will shortly send you the application form AW8 to enable you to apply for your Pension Benefits. I can confirm that your final salary will be paid on (Date) and will include payment for any outstanding annual leave. Please note that annual leave extends service for pension purposes only where any outstanding leave is paid in lieu on termination. Please do not hesitate to contact me should you require further information or assistance. I should like to take this opportunity to wish you a long and happy retirement. Yours sincerely xxxxxxxxx Manager cc Personal File 13
Appendix 2 Retirement Process Staff member informs their manager in writing of their wish to retire and claim their pension at least three months notice to their Manager and SBS Pensions (Portsmouth) is required to ensure pension arrangements are in place at the date of retirement. Manager immediately informs SBS Pensions (Portsmouth) by email to (Sbs.pensionsports@nhs.net) of the employee s intention to retire and supplies the following information to SBS Pensions; Manager completes Termination immediately via ESR Manager Self-service /// Name of employee Assignment number Name of employing Trust Date of retirement taking account any pay in lieu of annual leave Type of retirement for example age, voluntary early retirement etc Contact name and number for manager and employee. SBS Pensions send the employee the retirement benefits application form (AW8) and Pensions Choice declaration form to complete and return to SBS Pensions (Portsmouth) Retirement application paperwork (AW8) completed by SBS Pensions (Portsmouth) and sent to NHS Pensions Agency (Fleetwood) NHS Pensions Agency process pension benefits and notify employee in writing of award of retirement benefits 14