Department of Health issues guidance on “retire and return”
The Department of Health has issued new guidance for NHS employers on the re-employment of staff in receipt of benefits under the NHS Pension Scheme, a practice commonly known as “retire and return”. The guidance has been introduced following recent publicity surrounding the use of retire and return, and in the context of the drive for tighter control on public spending.
The new guidance is a significant development for any NHS employer planning to allow staff to return to employment having taken NHSPS retirement. Although it is not clear from the guidance how the new provisions will be enforced, it is clear that NHS employers will face greater scrutiny over their use of retire and return in future.
When considering retire and return applications, all NHS employers should now ensure that they have procedures in place which comply with the new guidance. Those responsible for considering applications should be appropriately briefed on the new requirements and be aware that no applications should be approved unless they can be justified on the grounds of service need and value for money. Staff who may be considering making retire and return applications should also be made aware of the new requirements.
In June 2015 the Secretary of State for Health wrote to all NHS Trusts and Foundation Trusts with a commitment to “clamping down on “retire and return” to ensure that very senior staff cannot gain financially from this at a cost to the taxpayer. I have concerns that very senior staff use the retire and return provisions of the NHS pension scheme to access their full pension and lump sum and then continue in full-time work. The provisions were not designed for senior staff to gain financially. I will look to extend existing rules so employees’ new salaries plus their pension on returning to employment cannot be more than the original salary prior to retirement.”
The new guidance is not however a change to the current pension rules themselves, which still permit retire and return. The new guidance applies to all NHSPS members who are employed directly by NHS organisations as well as by medical contractors, GP providers, direction bodies and independent providers.
The guidance recognises that the practice of retire and return can benefit both employers and employees, enabling organisations to retain necessary skills, experience and knowledge, support the health and wellbeing of older staff, and potentially realise financial savings through reduced recruitment costs, agency spend and employer pension contributions. However, it also stresses that applications should not be automatically approved, and employers should consider each application on its own merits, taking into account current and future workforce requirements.
The guidance includes a checklist to use when considering an application for retire and return. In each case, the employer should be able to demonstrate that they have considered:
- The requirement for the post to be filled through “retire and return” in light of cost improvement pressures
- Equality requirements
- Value for money
- The standard of the employee’s work and attendance
- The employee’s competence against the requirements of the post
- Whether the hours proposed can be accommodated/meet service needs
- Succession planning and the potential impact of the employee’s return upon the team
- Whether it is in the best interests of the service
- Longer term workforce/service plans for the post and team.
Next steps and how Capsticks can help
The employment team at Capsticks will continue to monitor how the new guidance will apply in practice. We have a wealth of experience in advising NHS clients on retire and return, and can provide support in updating policies to ensure they are compliant with the new guidance, as well as legal oversight on individual applications.
For further information or advice on how this issue might affect your organisation, please contact Andrew Rowland, Jacqui Atkinson or Ron Simms.