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Pensions - 24-hour retirement explained

There are perils to avoid for GPs returning to work after taking their NHS pension. By Dr Tony Grewal

There is little point for most of us in waiting to collect our NHS pensions beyond the age of 60. The threat of being compelled to work until 65 or longer in order to earn the full pension under the government's planned overhaul of the NHS Pension Scheme (NHSPS) is concentrating our minds.

Many GPs, however, still feel able to work. So what are the steps we can take to avoid the perils in the transition from being a partner to a pensioner with the freedom to work fewer hours with a better work/life balance? There are three 'Ps' on this pathway to 24-hour retirement:

  • Pension.
  • Practice.
  • Primary care organisation (PCO).

Pension
Your first step is to confirm with NHS Pensions (or its equivalents in Scotland and Northern Ireland) its assessment of the size of your pension pot. It does sometimes make errors, so get independent advice too.

Look at examples of the balance between lump sum and pension income, and remember that a high practice income plus your pension may put you into a 'super tax' bracket - currently an income of £150,000 or more a year will mean paying 50% tax.

Practice
Assuming you are in a partnership, let your partner(s) know your plans in plenty of time, and make sure they want you back. Negotiate what your standing with the practice will be on your return and remember that to obtain your pension, you must retire from the NHS for 24 hours and may not do more than 16 hours' NHS work a week for one month afterwards.

Get all agreements in writing, and have a signed and dated contract for returning to the partnership or add an appendix to your partnership deed to cover this. Decide with your partners how you wish to handle partnership dissolution accounts, premises reimbursements and equity in the practice.

Primary care organisation
Agree your intentions with the PCO, obtain its agreement in writing and check the notice period in your NHS contract. Most PCOs will not raise difficulties. It is your right to retire and return, and PCOs cannot refuse a reasonable variation to a GMS contract should you choose to return as a contractor.

The PMS contractual position is different: PCOs have discretion over agreeing to 24-hour retirement and you may need LMC advice and support in negotiating this.

RETIRE AND RETURN
  • GPs in the NHSPS 1995 Section can take 24-hour retirement once they reach 60, the section's normal retirement age, to obtain their pension benefits. Those in the 2008 Section have to wait until age 65 to do this.
  • You must retire from the NHS for 24 hours and must not do more than 16 hours' NHS work a week for one month afterwards.
  • In the 1995 Section, if as well as being a GP you have another pensionable NHS post, you must retire from this as well if it is for more than 16 hours a week. In the 2008 Section you must retire from all pensionable NHS posts for 24 hours.
  • If in a GP partnership, be sure to agree in writing with your partners that you can return to the practice.
  • Your PCO cannot refuse a reasonable variation to a GMS contract if you want to return as a contractor GP. With a PMS contract, the PCO has discretion to agree or refuse to approve 24-hour retirement.
  • For singlehanded GPs, taking 24-hour retirement is more difficult - see main text.

Single-handed GPs
GP contractors without partners intending to retire and return face a more difficult path. When you resign your NHS contract (which you must do to collect your pension), the responsibility for the practice and patient services falls to the PCO. You would have to sign a new contract when you return, and granting you a contract is at the discretion of the PCO.

Technically the PCO would in fact be creating a new single-handed practice, which under government policy is nowadays frowned upon.

It would also have to run your practice for a month, and many PCOs would use this opportunity to investigate and criticise your practice. If you manage to get your PCO to agree to this, make sure it will not uncover flaws in the way you have been practising.

Realistically, in the current climate, a singlehanded contractor's only safe way forward is to appoint a partner who is also a signatory to the practice's NHS contract, well in advance of retirement (and make sure you have safeguards in writing with the partner enabling you to return).

Give 28 days' notice to your PCO that you are taking on a partner. On the date the partner joins, give 28 days' notice of your retirement from the practice and that the practice will be returning to singlehanded status for 24 hours.

As an alternative, you may wish to merge with a neighbouring practice. This may have other advantages, particularly if you would like to see your patients and staff well looked after a few years down the line when you retire fully.

Again, be prepared to ask for advice and support from your LMC. Also note that the rules vary according to which section of the NHSPS you belong to: the 1995 or the 2008 section.

  • Dr Grewal is medical director of Londonwide LMCs

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