Goodbye tension… hello pension!

Paul Harris of Goodman Grant Solicitors looks at the 24-hour retirement principle and answers some common questions.

In light of all the recent changes and uncertainty surrounding public sector pensions and policies you would be forgiven at least a modicum of confusion surrounding what your options are and how you might proceed when the time comes to think about retirement and drawing your NHS pension.

One element in particular that both appeals to and confuses many is the 24-hour retirement principle.

What is the 24-hour retirement principal?

It is the process by which members of the NHS Pension Scheme can receive their pension benefits and then subsequently return to work. There are many reasons an individual may choose this option, however, doing so requires a significant element of planning and adherence to the pension scheme rules.

There are, of course, certain conditions that must be satisfied by the NHS practitioner in order to receive their lump sum pension payment. These are:

(1) The NHS practitioner must retire from their NHS contract for at least 24-hours

(2) The NHS practitioner can not work more than 16 hours per week in the first month after the pension becomes payable. If the NHS practitioner holds more than one NHS position, they must not work in total more than a 16-hour week across all the NHS positions they hold.

What are the risks associated with taking 24-hour retirement?

There is one very big risk involved, which is for an NHS practitioner holding a contract as an individual, NHS England is under no obligation to issue a new NHS agreement when the 24-hour retirement is effected and the practitioner is removed from the contract. This seems particularly unfair, bearing in mind that the intention of the NHS practitioner would clearly not have been to sacrifice their NHS contract and effectively the goodwill in their practice.

However, the NHS England guidance, Policy for variations of primary dental care contracts and agreements is clear on its position:

Single-handed practitioners in particular should take advice as 24-hour retirement would necessitate the termination of the contract. In those circumstances, there is no guarantee that NHS England would commission services from that individual following termination.”

NHS practitioners should also be aware that even if NHS England agrees to re-issue the General Dental Service (GDS) contract following 24-hour retirement, there is no obligation to award the NHS practitioner a contract that has the same value as has previously been agreed.

How do you protect the NHS Contract?

In lieu of the risks, it can be pertinent to try and protect the GDS contract to make sure it is not in danger of termination or a reduction in value. To do so, it is imperative that a second NHS practitioner is added to the NHS contract.

This is not always straightforward and there is a lot involved in adding a partner on to the agreement:

  • Finding a partner, (ideally someone who the NHS practitioner trusts)
  • Completing a retirement benefits claim (AW8) form
  • Producing a partnership agreement to reflect that the GDS contract will be a partnership contract, with appropriate safeguards for both parties
  • Submitting a partnership notice (in the prescribed form) to be sent to NHS England
  • Dealing with NHS England in order to finalise the new partnership
  • Reviewing the contract variation once received from NHS England, ensuring no unexpected changes have been made (i.e. contract reduction)
  • Completing the numerous CQC partnership application forms
  • Liaising with the CQC during the application process
  • Producing a retirement agreement and providing notice to NHS England if the partner is to be removed from the GDS contract following 24-hour retirement.

How long does it take to complete the 24-hour retirement process?

The whole process, from submission of the appropriate forms to drawdown of the NHS practitioner’s pension, can take between three to five months. Indeed the NHS pensions department states at the beginning of the retirement form, that in order to assist the process the relevant forms should be submitted at least three months prior to your retirement date.

A potentially lengthy process, it is essential that all stipulations be strictly adhered to throughout. Complying with all applicable timescales, notice periods and procedures will ensure that there are no unexpected consequences.   

From the initial decision to proceed with 24-hour retirement, to understanding and protecting against the risks, there is a lot to consider. There are also important financial implications that must be understood. It is therefore vital to seek the advice and guidance of trained industry professionals who understand the dentistry and have experience providing first class legal assistance.       

Paul Harris of Goodman Grant Solicitors

NASDAL and ASPD MEMBERS

For more information call Paul Harris on 0151 707 0090

Email [email protected]

 

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