Retirement Policy & Procedure

VELINDRE NHS TRUST REF: BLACK 36 Trust Procedure/Policy Retirement Policy & Procedure Policy Lead: Executive Director of Workforce & OD Approved By: Trust board Page 1 of 13

EXECUTIVE SUMMARY RETIREMENT POLICY Overview: The policy outlines the retirement options available to employees. It also details the associated procedures and responsibilities to be followed when an employee wishes to pursue the option of retirement and/or decides to retire from their post within the Trust. Who is the policy intended for: Key Messages included within the policy: All Trust Staff/Trust Policy leads The Trust is no longer able to impose a default retirement date on employees. The Trust is responsible for informing employees of their right to retire from employment. Employees have a right to choose a retirement date Employees are able to purse flexible retirement options Eligible employees have a right to assess a retirement gratuity payment when they retire from the Trust. PLEASE NOTE THIS IS ONLY A SUMMARY OF THE POLICY AND SHOULD BE READ IN CONJUNCTION WITH THE FULL POLICY DOCUMENT Approved By: Trust board Page 2 of 13

Contents in a table format including all main headings and appendices in font black Arial 12. Section Item Page Number Executive Summary 2 1 Policy Statement 4 2 Scope of the Policy 4 3 Principles 4 4 Definitions of Retirement 4 4.1 Normal Retirement 5 4.2 Early Retirement 5 4.2.1 Voluntary Early Retirement with Reduced Benefits 5 4.2.2 Member of the Special Classes 6 4.2.3 Ill Health Retirement 6 4.2.4 Premature Retirement (Early Release of Benefits) 6 5. Flexible Retirement 6 5.1 Wind Down 6 5.2 Step Down 7 5.3 Access Pensions and Return to Work 7 6. Impact on Salary and Pension 7 7. Retirement Procedure 8 8. Recognition at Retirement 8 9. Preparing for Retirement 8 Appendix 1 Appendix 2 Appendix 3 NHS Pension Scheme Glossary of Terms Retirement Gratuity Form. Approved By: Trust board Page 3 of 13

RETIREMENT POLICY/PROCEDURE 1. POLICY STATEMENT Velindre NHS Trust places a high value on the part played by all employees in the provision of services to patients and donors and seeks to ensure that the management of its employees is carried out in accordance with the principles of equality and fairness. The Trust also takes seriously its obligation to ensure that when an employee is approaching their chosen retirement date, they are treated with dignity and respect and that all necessary arrangements are made to ensure that the transition to retirement is managed smoothly. The policy and procedures outlined in this document are provided to enable managers to take the appropriate action when an employee decides to retire from their post within the Trust. 2. SCOPE OF THE POLICY The Retirement Policy applies equally to all employees employed by Velindre NHS Trust, regardless of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. The principles of the Human Rights Act 1998 also apply to this policy. Special provisions are included within the policy which may apply to particular staff groups e.g. medical and nursing staff. 3. PRINCIPLES The Trust recognises that its employees skills and experience are vital to the success of the organisation and in support of its retention strategy. It is also appreciated that employees are choosing to work longer for a variety reasons. In accordance with the Employment Equality (Repeal of Retirement Age Provisions) Regulations, 2011, the Trust will not impose a default retirement date on employees, rather it will support them in their chosen retirement date and the access to their NHS Pension fund. Under the terms of this policy, the definitions of retirement are in accordance with those prescribed within the NHS pension scheme. 4. DEFINITIONS OF RETIREMENT The NHS pension scheme guide 2011 (http://www.nhsbsa.nhs.uk/documents/pensions/sd_guide_- _(V6)_03.2011.pdf), provides full detail regarding retirement definitions within the NHS. In support of this guide, this policy provides an overview of the key differences between the 1995 NHS pension scheme and 2008 NHS pension scheme in Appendix 1. Approved By: Trust board Page 4 of 13

4.1 NORMAL MINIMUM RETIREMENT The Trust will not place a default retirement age on any of its employees; rather, it will support them when they choose to retire from their employment in accordance with the NHS pension scheme of; Staff aged 60 or over (i.e. NHS Pension retirement age) Staff aged 55 to 59 with Special Class status Staff aged 50-59 who joined the 1995 section of the NHS Superannuation Scheme before 6th April 2006 and have chosen to access their pension early with reduced benefits Staff aged 55 or over who joined the NHS Superannuation Scheme on or after 6th April 2006 and have chosen to access their pension early with reduced benefits Staff who have purchased additional years under the pension scheme should contact the Pensions Department for advice on the impact of this on their retirement date and benefits payable. If an employee chooses not to retire at their normal minimum retirement age, they can remain members of the NHS Pension scheme and can continue to contribute to the scheme up to age 75, except for members of the special classes whose contributions must stop at age 65, or until they reach a maximum of 45 years scheme membership if this is before such an age. Where an employee chooses to retire from their post (in accordance with above criteria) within the Trust and access their NHS pension fund, they should notify their manager in writing at least 6 months prior to their intended termination date. This will allow adequate time for the NHS pension department to ensure that the pension fund is payable from the employees chosen retirement date. 4.2 EARLY RETIREMENT Under the NHS Pension Scheme, early retirement is allowable under the circumstances outlined below. However it should be noted that release of pension benefits is subject to Guaranteed Minimum Pension (GMP) testing. 4.2.1 VOLUNTARY EARLY RETIREMENT WITH REDUCED BENEFITS Employees may voluntarily retire at any time from the age of 50 years onwards provided they have at least two years pensionable service and they joined the NHS pension scheme before April 2008. Employees who have joined the scheme after April 2008 may opt to take voluntary early retirement from age 55 years onwards. An application for early retirement should be made by the member of staff at least 6 months prior to their chosen early retirement date to their line manager. If early retirement is chosen before the age of 60 years, (or age 65 for those Approved By: Trust board Page 5 of 13

joining the scheme after April 2008) benefits will be reduced in order to take account of the early payment of benefits. Employees considering taking voluntary early retirement should request an estimate of the benefits and the GMP from the Trusts Pensions department to ensure they would be entitled to retire under this scheme. 4.2.2 MEMBERS OF THE SPECIAL CLASSES This applies to any member of the scheme who is employed as a nurse or physiotherapist who joined the NHS Pension Scheme before 6 March 1995. Such employees may retire at any time from the age of 55 years onwards provided they have at least five years pensionable employment immediately before their chosen retirement date. Benefits are not reduced in these circumstances. Members of the special classes cannot continue to pay in to their pension after age 65. 4.2.3 ILL HEALTH RETIREMENT Benefits may be paid when early retirement occurs due to ill health. This is managed in accordance with the Trusts Sickness Absence Policy (Black 36). 4.2.4 PREMATURE RETIREMENT (EARLY RELEASE OF BENEFITS) An employee of minimum retirement age, with at least 2 years membership within the NHS pension scheme, may access their pension benefits early if they retire early through one of the following circumstances: Redundancy Reorganisation Interests of the efficiency of the Service 5 FLEXIBLE RETIREMENT The Trust recognizes that employees may wish to phase down rather than fully retire, therefore, to support this, the following schemes are available: 5.1 WIND DOWN This results in the employee working fewer hours within their current post. Winding down involves a corresponding reduction in earnings, the pension entitlement would continue to grow however, this would be at a slower rate. The eventual pension would be calculated on the total membership accrued which would be higher than if the member had retired before winding down. 5.2 STEP DOWN Approved By: Trust board Page 6 of 13

Stepping down involves moving to a lower banded, less responsible job (subject to such a post being vacant), while still enabling the employee to make good use of acquired skills and the Trust to retain the experience of its employees. With the agreement of the Trust, the member may wish to take this option and voluntarily protect their pay up to the date of the step down. To qualify for voluntary protected pay the member; Must be over the minimum retirement age Their pay must have reduced by at least 10% Be in their new job for at least 12 months Can only apply for this once Apply to NHS Pensions for the protection with 15 months of their pay reducing With the formal agreement of the Trust the pension entitlement at the point of stepping down would be secured and increased in line with the cost of living. A second pension would then be started on the lower level of pay. When the employee chooses to fully retire from employment, two separate pensions will be calculated and combined for payment or, if it is more beneficial, and a single pension based on the full membership and the final pay. 5.3 ACCESS PENSION & RETURN TO WORK In order for pension benefits to be payable there must be a minimum break in service of 24 hours before resuming work in the NHS. Previous service will not then count towards redundancy. By arrangement with the Trust, an employee can retire, access their NHS pension and then return to work in a lower banded post (subject to vacant posts) or on reduced hours within the same post (subject to the Trust being able to reduce the hours of the post or fill the remaining vacant hours). Under the rules that govern the pension scheme the employee cannot work more than 16 hours per week in the first month of their, re-employment otherwise the pension will be suspended. 6 IMPACT ON SALARY & PENSION Where a member with Special Class Status has retired and returns to work aged less than 60 they cannot earn more through their pension and postretirement employment than their pensionable pay figures at retirement. If this happens their pension will be abated to bring the total income down to the required level. Employees who were in the scheme before April 2008 and have not opted to join the new scheme cannot re-join the scheme after retiring and returning to Approved By: Trust board Page 7 of 13

work. Members of the new scheme may re-join the pension scheme if opting to retire and return. 7 RETIREMENT PROCEDURE The employee should notify their manager, in writing, of their intention to retire 6 months prior to their chosen retirement date. This will ensure that their pension is processed in readiness to be payable from their retirement date. The notice of termination must be immediately completed by the line manager six months prior to the date of termination and submitted to the payroll department as a matter of urgency. It is essential that the termination form is clearly marked, retirement- accessing pension benefits. 8. RECOGNITION AT RETIREMENT Divisional Directors should inform the Director of Workforce & OD of impending retirements and the Chairman will then write to each member of staff upon their retirement. A retirement gratuity will be paid to each eligible retiree as set out in the schedule at Appendix 3. 9. PREPARING FOR RETIREMENT A pension quote will be provided by the Pensions Department as part of the retirement process. If a quote is required beforehand one can be requested from the Pensions Department or from the NHS Pension Agency. Estimates can be obtained via estimates@nhspa.gov.uk or by calling the Pensions Agency on 0845 421 4000. All employees will be given the opportunity to attend a pre-retirement course dependant on the length of notice received. This will provide an opportunity to discuss key issues of retirement, including the lifestyle change it brings. It will also enable employees to meet other employees who have also chosen to retire from their employment within the NHS. It is the responsibility of managers to ensure that their employees are made aware of the pre-retirement courses and to make appropriate arrangements. The cost of the pre-retirement courses will be met by the relevant department within the Trust. Arrangements will be made by the Workforce and Organisational Development Department to provide and publicise pre-retirement courses. APPENDIX 1 NHS Pension Scheme New NHS Pension Scheme Approved By: Trust board Page 8 of 13

(for staff in NHS Pension (for staff joining NHS scheme prior to 1 st April 2008 Pension scheme after 1 st and remaining in this April 2008) scheme) Normal Retirement Age 60 (55 for special classes) Membership Limits From age 16 to 75 Overall membership limit, for future service, of 45 years Earnings Limits No earnings limit for future service Accrual Rate 1/80 th final salary scheme CARE for practitioners accrual rate of 1.4% Retirement Lump Sum Final Salary Based On Practitioner Pension Based On Saving for Increased Pensions Automatic fixed tax free lump sum plus ability to commute part of pension for increased lump sum up to 25% of pension value Best of last 3 years pensionable pay All pensionable earnings re-valued by dynamising factors determined by changed in RPI plus 1.5% Additional pension purchase. Existing added years' contracts honoured but no new contracts. Money Purchase Additional Voluntary Contributions and Stakeholder Pensions 65 From age 16 to 75 Overall membership limit of 45 years No earnings limit 1/60 th final salary scheme CARE for practitioners, accrual rate of 1.87% Total flexibility to give up part of pension for a tax free lump sum of up to 25% of pension value Annual average of best 3 consecutive pensionable pay, in last 10 years; all years before last year revalued by RPI All pensionable earnings re-valued by dynamising factors determined by changed in the retail price index plus 1.5% Additional pension purchase. Money Purchase Additional Voluntary Contributions and Stakeholder Pensions NHS Pension Scheme (for staff in NHS Pension scheme prior to 1 st April 2008 New NHS Pension Scheme (for staff joining NHS Pension scheme after 1 st Approved By: Trust board Page 9 of 13

Voluntary Early Retirement Flexible Retirement Survivor Benefits Survivor Pensions on Death in Service and remaining in this April 2008) scheme) From age 50 From age 55 Pensionable reemployment if member retired on ill-health grounds, draws a pension and return to the NHS under age 50. Pension payable on retirement only. Step Down voluntary pension protection where pay is reduced on taking a less demanding job All qualifying partners eligible for pension backdated to 1988. All qualifying partners keep survivor pension even if they re-marry or co-habit. Initial Partner Pension to be paid for 6 months in all cases. For members retiring on or after 1 April 2008 and before the choice exercise pensionable re-employment available in New Scheme after a break of 2 years. Pensionable reemployment on return to work after retirement and re-join the Scheme. Draw Down taking part of pension whilst continuing in a less demanding NHS employment. All qualifying partners eligible for pension backdated to 1988. All qualifying partners keep survivor pension even if they re-marry or co-habit. Initial Partner Pension to be paid for 6 months in all cases. GLOSSARY OF TERMS Pensionable Earnings: APPENDIX 2 The earnings on which a pension is calculated are usually the whole time equivalent salary in the best of the last three years of employment. Approved By: Trust board Page 10 of 13

Pensionable Service: Pension Entitlement: Lump Sum: Added Years: AVC: Additional Voluntary Contributions GMC: The number of years an employee has been part of the NHS Pension Scheme, with contributions made from salary and from employers. It is calculated as a whole time equivalent, each day worked counts to pensionable service. Pensioners receive 1/80th of pensionable earnings for each full year they have been a member of the scheme and making contributions Normally on retirement pensioners will receive a lump sum of 3 times the annual pension entitlement A facility to pay additional contributions to increase annual pension and lump sum. Additional Voluntary Contributions A method of topping up a pension by extra financial contributions from the member of employees s own chosen provider Guaranteed Minimum Pension Further Information can be found: NHSPA Website: www.nhspa.gov.uk Flexing Retirement Helpline: 01253 774 440 All NHS staff can review their retirement options and how they will affect pension. The following booklet can be obtained from the Pensions Department: Scheme Guide to the NHS Pension Scheme. Injury Benefits The following factsheets are available from the Pensions Department Leaving Early and Transferring Out Early Retirement Age Retirement Family Benefits and Life Assurance Approved By: Trust board Page 11 of 13

Appendix 3 VELINDRE NHS TRUST RETIREMENT GRATUITY AND ASSOCIATED HOSPITALITY This form to be completed by the Departmental Manager. Employee s Name: Department Address: Date of Birth: Date of Retirement: Payroll Number: Details of service with Velindre NHS Trust or preceding employer(s) within NHS Wales where the change of employer was as a result of service reconfiguration Employer From To Number of completed years service [Qualifying service must be unbroken ie no breaks of service exceeding 3 months I confirm that a Retirement Gratuity @ 10/yr should be paid on the basis of years service. I do/do not* wish for funding for hospitality (up to maximum of 50) - please state amount Manager s Name: Date: Signature: EMPLOYEES CHOICE: I wish to receive a *cash payment via salary or a gift voucher (both taxable) / OR a gift (*delete as appropriate) Employee s Signature: Approved By: Trust board Page 12 of 13

Workforce Department I confirm that a Retirement Gratuity is payable based on the following calculation: years @ 10 per annum = Signed: Designation: Date Finance Department Finance signatory approval and notification to Departmental Manager Signed Designation: Date:. Approved By: Trust board Page 13 of 13