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Welcome - NHS Pension Scheme Ready Reckoner

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Guidance for employers on supporting NHS staff through partial retirement, including process, benefits, and policy updates.

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NHS Pensions | Understanding partial retirement

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Re-employment | NHSBSA

Click you tube link to watch

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*The break in service required at retirement is down to local determination, subject to a minimum of 24 hours stipulated by NHS Pensions. The Trust has previously required a 2 week break to remove continuity of service for redundancy liabilities whilst ensuring staff have appropriate rest before returning. There is a risk with the new 24-hour break in service that redundancy liabilities will remain, however we believe this risk is minimal and it will bring increased benefits to the service and individuals. Individuals who would like to take a break of more than 24 hours still have the option of doing so.

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Member hub | NHSBSA

Employer hub | NHSBSA

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Guidance for NHS employees and employers

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This guidance aims to:

Support employers to understand, promote and discuss flexible retirement options with staff to encourage retention.

Ensure employees approaching the end of their careers feel rewarded and recognised by their employer for their experience, service and commitment.

Help employers to develop effective flexible retirement policies.

The NHS Pension Scheme offers a number of flexible retirement options with new flexible retirement options being introduced to help employers attract and retain experienced staff.

The contents of our guidance is updated regularly and has been worked on by the Department of Health and Social Care.

How flexible retirement options can benefit employers

Supporting employees to work flexibly towards the end of their careers can help employees achieve a healthy work-life balance and enable experienced staff to stay in the NHS for longer, and pass their valuable skills and knowledge to colleagues.

Retaining experienced staff is critical to ensure the delivery of high-quality patient care.

By enabling employees to retire flexibly, employers can support the health and wellbeing of employees who are approaching the end of their careers. This can help to improve sickness absence rates and productivity, while reducing rates of stress, fatigue and burnout.

Offering retired staff the option to re-join the NHS Pension Scheme after full or partial retirement is a way of supporting the financial wellbeing of employees, as it allows staff to build up further pension for a comfortable retirement and may help to bridge any gap between taking their NHS Pension and State Pension benefits.

Partial retirement can be used by employers as a tool to support staff affected by annual allowance, as the ability to take all or part of their pension and continue working may help some staff to control their pension growth.

Partial retirement (sometimes referred to as draw down)

Since 1 October 2023, staff who have pension benefits in the 1995 Section, the 2008 Section or the 2015 Scheme can access partial retirement.

Partial retirement enables members who have reached minimum pension age to take all or part of their pension while continuing to work.

Members may take from 20 per cent up to 100 per cent of their pension using partial retirement on one or two occasions without having to leave employment.

Members must reduce their pensionable pay by at least 10 per cent for 12 months starting from their partial retirement date.

Partial retirement eligibility

have reached their minimum pension age

be an active member of the scheme

reduce their actual pensionable pay by at least 10 per cent for 12 months starting from their chosen partial retirement date

have a contractual change in their terms and conditions of employment to reflect their reduction in pensionable pay, the rest of their terms and conditions remain the same

not have already claimed partial retirement on two occasions.

Yes. The NHS Scheme regulations apply to all scheme members, including employees of direction employers. A direction employer is an organisation that is not an NHS employing authority but has legal access to the NHS pension scheme for some of its employees.

Achieving a contractual change and the 10 per cent reduction in pensionable pay

A contractual change to the employee's employment contract to reduce their pensionable pay be 10 per cent is required before their partial retirement application is submitted. This contractual change should continue to be in place for 12 months following their chosen retirement date.

Employers should not actively encourage staff to opt out of the NHS Pension Scheme. The scheme is a valuable part of the NHS total reward package and offers benefits to members, such as life assurance and ill-health retirement, that will be lost if they opt out. More information on the benefits is included in our value of the NHS Pension Scheme poster .

There are a number of more appropriate ways an employee can reduce their pensionable pay while maintaining the same level of working commitments, listed throughout this guidance.

Employers should not encourage staff to opt out of the NHS Pension Scheme as a way of achieving the 10 per cent reduction in any local partial retirement policies or communications.

No. An employee's HCAS payments will only stop if they no longer work (or live in the case of home workers), in a HCAS zone.

Reducing pensionable pay by reducing the level of working commitment

stepping down to a lower paid role and reducing the employee's level of responsibility

reducing the employee's contractual working hours or commitments

agreeing temporary agreements to change the employee's terms and conditions of employment, so that pensionable pay is reduced only for a 12-month period. A temporary change may give both parties reassurance that at the end of that period, the original working arrangements will return.

offering retire and return as an alternative way to access pension benefits. More information is available in the chapter on retire and return.

Reducing pensionable pay while maintaining the same level of working commitment

In cases where the employer and employee agree that the individual should continue to work in the same role, with no reduction in working hours, commitments or responsibilities, employers may review the structure of the employee's remuneration to reduce their level of pensionable pay, while maintaining their level of overall pay.

To access partial retirement, a contractual change must be made to the employee's substantive contract of employment that achieves the required 10 per cent reduction. Additional work may then be undertaken separately to supplement their newly reduced substantive work commitment.

Pensionable earnings are broadly all salary, wages, fees and other regular payments.

Non-pensionable payments include bonuses, non-regular payments, payments made to cover expenses or overtime and pay awards or increases which are expressed by the Secretary of State to be non-consolidated.

Some local payments can be determined as non-pensionable. Further information is available on the NHS Pensions .

Additional programmed activities (APAs)

Allowances for undertaking management responsibilities

Waiting list initiative (WLI) payments

Weekend and on-call payments

Availability allowance for on-call work is only pensionable if there is a specific rota commitment that an individual is paid for on a regular basis.

Processing the 10 per cent reduction in pensionable pay through the ESR payroll system

Below are some examples of local manual solutions employers are using on ESR to resolve this:

Monitoring the 10 per cent reduction in pensionable pay

Further information about abatement and partial retirement is available below.

Application process for partial retirement

Flexible retirement is a form of flexible working and requests should be handled in line with the national principles set out in section 33 of the  NHS Terms and Conditions of Service Handbook . The NHS Staff Council has also produced flexible retirement guidance , covering the application and appeals process.

Step 1

Employees wishing to take partial retirement should first speak with their line manager and raise a flexible working request, in line their organisation's local request policy.

Step 2

Employees should speak with a member of their HR team to agree how to reduce their pensionable pay by 10 per cent for 12 months, starting from their chosen partial retirement date. Once mutual agreement is reached, contractual changes will be made to their employment terms and conditions to reflect the reduction.

Step 3

The member will need to decide and inform their employer on what percentage of their pension, between 20 per cent and up to 100 per cent, they wish to take. NHS Pensions has developed a partial retirement calculator and a McCloud percentage tool to help members decide how much of their pension they wish to take.

Step 4

Both forms should be sent to NHS Pensions for processing.

Step 5

Employers should not close down the member's record on Pensions Online as the member is continuing in that employment.

The application process for partial retirement is similar to the application process for any other retirement, but an additional form, the partial retirement supplementary form , is required. We recommend employers read the partial retirement employer factsheet on the NHS Pensions website before completing the form. The following additional information is required to complete the supplementary form:

Confirmation that the member's terms and conditions of employment have been changed to achieve a reduction in pensionable pay of at least 10 per cent, and that the reduction in pensionable pay is expected to be in place for 12 months staring from their chosen partial retirement date.

The percentage of benefits the member wishes to take.

Any questions regarding the application forms and process should be directed to NHS Pensions.

Taking a pension income in addition to income from employment may alter the employee's personal tax position.

Members are not able to choose which scheme they take their benefits from. When a member chooses to take partial retirement, their chosen percentage is applied sequentially across all their benefits in the NHS Pension Scheme. This means they effectively take or use up their 1995/2008 scheme benefits first, followed by their 2015 Scheme benefits. Therefore, if the member wishes to take their 1995/2008 Scheme benefits but not their 2015 Scheme benefits (perhaps to avoid an early retirement reduction being applied to their 2015 Scheme benefits) employers will need to indicate this on the partial retirement supplementary form.

Members are not able to take their lump sum separately from their pension. Taking partial retirement involves claiming a proportion of their pension and any lump sum associated with that pension.

Members who are eligible for the McCloud remedy may wish to consider that if they take all of their pension benefits, they may be required to pay back any overpayments following their McCloud choice later on. Further information about partial retirement and the McCloud remedy is available below.

Two modelling tools are available on the NHS Pensions website to support members to decide how much pension they wish to take. Further information about modelling tools is available below.

The partial retirement pension calculator is a comprehensive tool giving members the information they need to make a fully informed choice on the level of pension they wish to take on partial retirement. Members should be encouraged to use the tool before submitting their application for partial retirement.

The McCloud percentage tool was developed as an interim tool for members who had a strong preference for taking partial retirement before the partial retirement pension calculator was launched in December 2023. This tool does not give as much information as the partial retirement pension calculator, but it will help members to see what percentage of pension they could take to avoid having overpayments to repay when they make their McCloud choice later on.

Supporting members who are unable to take partial retirement

An employee may be unable to take partial retirement because a mutual agreement cannot be reached with their employer, on how to achieve the 10 per cent reduction in pensionable pay. Employers should discuss alternative flexible retirement options and be prepared to follow their local appeals process (based on the principles set out in Section 33 of the NHS Terms and Conditions of Service Handbook ) if necessary.

In both cases, employers may offer retire and return to these members as an alternative way for employees to access their pension benefits and continue to work in the NHS. It is good practice for employers to offer the same terms and conditions of employment after retiring and returning including pay, annual leave and sick pay entitlements. More information is available in the retire and return chapter.

Differences between retire and return and partial retirement

Retire and re-join

This will enable employers to provide a more valuable reward offer to attract and retain their most experienced staff.

From 1 April 2023, employers must notify all staff who have taken their pension benefits from the 1995 Section and returned to work that they are eligible to join the 2015 Scheme if they wish.

Where an employee chooses to end their membership to an alternative pension arrangement and join the 2015 Scheme, they may ask if it is possible to transfer their benefits from the alternative pension arrangement into the 2015 Scheme. Employers should signpost employees to guidance on transferring benefits available on the

Employers should continue to use the NHS Pension Scheme as the default scheme for contractual enrolment and automatic enrolment.

Impact of flexible retirement on redundancy

As the aim of partial retirement and retire and return is retention, we expect it will be unlikely for an employee undertaking either of these flexibilities to later be made redundant. Support on such queries can be emailed to our pension team .

The importance of flexible working for staff in the later stages of their career

Flexibility enhancements were introduced to champion and facilitate a cultural shift, ensuring that flexible working options are accessible to all NHS staff. Improving flexible working options aligns with commitments previously outlined in the NHS People Plan , People Promise and in the more recently published  Long Term Workforce Plan . One of the core commitments in the NHS People Promise is 'we work flexibly', emphasising that individuals should not have to compromise their family, friendships, or personal interests for the sake of work.

Options for flexible working:

part-time work - including job shares, term time only work, annualised hours

fixed working patterns - to give certainty around days, times and location of work

compressed or elongated working hours

fixed-term contracts.

Flexible retirement resources

Read NHS Staff Council on the process for considering flexible retirement requests.

Read our to learn how one trust promotes flexible retirement options to staff.

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Using flexible retirement to support retention

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How to support staff to work flexibly towards the end of their career using the flexible retirement options available through the NHS Pension Scheme.

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Partial Retirement Member Factsheet (nhsbsa.nhs.uk)

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If you're affected by the McCloud ruling

You can check if you're affected by the McCloud ruling by visiting our Changes to public service pensions page.

Part of the McCloud remedy is that all affected members will be given a choice between taking their benefits for the remedy period from the 1995/2008 Section, or taking 2015 Scheme benefits instead.

If you're affected, on 1 October 2023, your pensionable service for the period 1 April 2015 to 31 March 2022, known as the remedy period, was automatically put back into the 1995/2008 Section until it's time to make your choice.

If you apply to take partial retirement, we'll contact you within 12 months of taking your pension benefits, to ask you to choose the benefits that are right for you for the remedy period.

Depending on how long you'd like to work, it may change the part of the Scheme that's right for you for your service during the remedy period.

Your McCloud choice means there are other factors to take into account when deciding what percentage of your pension to take at partial retirement, as it could affect your tax position, or your final salary link if you have one. If you later choose to take 2015 Scheme benefits for the remedy period, you may have overpayments to pay back. If you cannot wait for the Partial Retirement Calculator, we've built an interim tool to help you avoid this.

The McCloud Percentage Tool cannot give you as much information as the Partial Retirement Calculator, but it allows you to see what percentage of pension you can take to avoid having overpayments to repay when you make your McCloud choice later on.
NHS Pensions Partial Retirement McCloud Percentage Tool (Excel: 59KB)
To use the McCloud Percentage Tool you'll need to know the membership that's been used to calculate your pension benefits. This is called your pensionable service or reckonable pay depending on the Section or Scheme. You can find it on your Annual Benefit Statement (ABS) or Total Reward Statement (TRS) or ask your employer.

If you were a fully protected member for McCloud, you can use the percentage from this tool and your ABS or TRS statement to estimate your benefits.

If you were not a fully protected member and moved to the 2015 Scheme before 1 April 2022, use the Partial Retirement Member Estimate form on our getting an estimate of your pension webpage and we'll produce an estimate for you.

Annual Benefit Statements (ABS) and Total Reward Statements (TRS) are updated each year in August. Statements published in late August 2023 will show your record updated to the end of March 2023.

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A partial retirement calculator will be available soon The calculator is being developed by the Government Actuary's Department (GAD). Read more about when it will be available in our recent news article.

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NHS (England & Wales) Partial Retirement Calculator

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NHS (England & Wales) Partial Retirement Calculator

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NHS Pensions Partial Retirement Factsheet (nhsbsa.nhs.uk)

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If a member is in good health they can choose to give up part of their own pension. They can do this to provide a pension for someone when they die.

This can be to a spouse, civil partner, qualifying partner, child or someone who is dependent on them for support. They must nominate before they retire and they cannot reverse this decision once made.

Read the Employer Allocation factsheet (PDF: 257KB) for more information.

​​​​​​How to apply for allocation

A member can apply by completing the AW8 / 11A

Form AW8 / 11A should then be attached to the retirement application form AW8 or AW8P and sent to NHS Pensions.

We'll send the member a quote to assist them in deciding whether or not they wish to allocate.

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Different types of retirement: age, ARER, ill health, redundancy, allocation

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Flexible retirement options with employee scenarios

Employers should discuss the following retirement flexibilities with staff to reach an agreement about how they will be applied on an individual basis.

Partial retirement (draw down)

Choosing when to retire

Each member has a normal pension age (NPA), at which they can retire and claim pension benefits without reduction. This age is defined by the scheme or section they are a member of.

The NHS Pension Scheme enables members to be flexible about the age at which they retire to suit their plans, allowing them to retire earlier or later with a corresponding reduction or increase to their pension benefits, where applicable. Members can choose to:

take early retirement before their NPA, if they have reached the minimum pension age set by the scheme or section they are part of. This may result in a reduction to pension benefits as they will be paid for longer.

retire later than their NPA and their pension benefits may increase by the application of late retirement factors. Late retirement enhancement is available to staff in the 2008 section and 2015 scheme of the NHS Pension Scheme.

Early retirement reduction buy out (ERRBO)

Members can pay additional contributions to buy out, or reduce, the actuarial reduction that would be applied to their pension were they to retire before their normal pension age. After joining the 2015 scheme, there will be a three-month window to take out an agreement with a buy-out period beginning with the member's first day of pensionable service.

Alternatively, a member will have three months after the beginning of each subsequent scheme year to take out an agreement, with the buy-out period and contributions backdated to the beginning of that scheme year. Please note that ERRBO is different to the existing provision for early retirement in 'the interests of efficiency for the service'.

Availability of retirement flexibilities

The following flexible retirement options are available to your staff depending on which part of the NHS Pension Scheme they have benefits in:

All retirement flexibilities are subject to discussion and agreement between the employee and the employer.

Members can find out which section or scheme they are in through their Total Reward Statement or Annual Benefit Statement.

(Editable Word version)

(PDF)

Our guidance, using flexible retirement to support retention, details the changes to flexible retirement options being introduced this year, and helps employers to support staff to work flexibly.

Next steps for employers

Consider how flexible retirement plays a role in your organisation's policies, strategy and communications to staff.

Communication

How will you promote flexible retirement options to staff?

How can you educate line managers about the benefits of flexible retirement?

How do you support staff who manage individuals or teams to have retirement planning discussions with their staff?

How do you incorporate flexible retirement and retirement planning into ongoing conversations about career progression, development and health and wellbeing?

Strategy

How can flexible retirement be used strategically to retain valuable experienced staff and meet workforce priorities? How can you build a workplace culture that embraces flexible retirement and embed it as normal practice?

How will you evaluate the impact flexible retirement has on your workforce?

Policy

Do your existing policies include retirement flexibilities?

How do you evaluate and manage requests for flexible retirement?

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Flexible retirement helps employers to retain valuable experienced staff by enabling those staff to work flexibly and improve wellbeing.

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Click the you tube link to watch the video

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Introducing the government changes to remove age discrimination from public service pension schemes

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leedsth-tr.pensions@nhs.net

Pensions – Leeds Teaching Hospitals NHS Trust

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Course: 298 ODC - NHS Pensions

The presentation is a summary of how the Employees pot builds during their career then mainly focuses on the process of retiring and the options available to the employee. The presentation is based around 3 videos, with question and answer sessions after each video and then more local information after that about the Pensions Team based at LTHT. This session won't be able to answer employee specific queries regarding financial outcomes from the NHS Pension scheme.

Audience - 50+

Course: 298 ODC - Preparing for Retirement

Helping you to meet your personal retirement planning goals by receiving further advice and information on retirement and pension planning, state benefits, investments and estate planning options. It will also help you to understand your and financial planning needs by prioritising your options, needs and shortfalls.
Audience - All staff

Course: 298 ODC - Planning a Positive Retirement

This seminar is designed for those of you who are: Thinking about retiring or taking your pension benefits within the next three years wanting to understand how the pension changes may impact your retirement savings

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NHS Staff Council flexible retirement guidance

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NHS Staff Council flexible retirement guidance

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NHS Staff Council flexible retirement guidance

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This page details guidance from the NHS Staff Council on the process for considering flexible retirement requests.

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Click the you tube link to watch the video

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How to claim NHS Pension Retirement benefits: Active members

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Guidance on Applying for Ill Health Retirement Where an Employee is Being Dismissed on the Grounds of Ill Health

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Guidance on Applying for Ill Health Retirement Where an Employee is Being Dismissed on the Grounds of Ill Health

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Change of circumstances: guide for NCIA and NCEA holders - GOV.UK

Retire and return

If an award holder retires and returns immediately following the statutory minimum 24-hour requirement, they may be eligible to keep their NCEA or NCIA until its scheduled expiry date, provided they continue to meet the standard eligibility criteria. However, if there are any changes to their contract, role, employer or if there is a break in employment, the duration of their award may be shortened. ACCIA will not extend the expiry date of any award unless there are extenuating circumstances relating to ill health or other reasons that are agreed by ACCIA.

Anything longer than the mandated minimum 24-hour requirement will constitute a break in employment. Circumstances differ if your eligible contract begins 24 hours after retirement but agreed unpaid or paid leave is taken immediately after commencing the contract. As long as you remain continuously employed under an eligible contract, paid or unpaid leave following retire and return will not constitute a break in employment. This must be clearly communicated to ACCIA to avoid incorrect application of our rules

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Retire and Return staff declaration2.pdf

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Redundancy arrangements following PR or R&R

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Redundancy arrangements following PR or R&R

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27. What about employees who have retired, returned to work in the NHS and subsequently made redundant? Does their previous NHS service count for redundancy?

Section 16.6 of the NHS terms and conditions of service handbook states that reckonable service does not count for employment where the member has taken pension benefits.

16.6 The following employment will not count as reckonable service:

employment that has been taken into account for the purposes of a previous redundancy, or loss of office payment by an NHS employer

where the employee has previously been given pension benefits, any employment that has been taken into account for the purposes of those pension benefits.

However, if the employee has a break of less than one week after they have retired, they would be entitled to statutory redundancy. In order to prevent this situation arising, employers may require a break of 14 days between retirement and re-engagement to ensure that there has been a ‘statutory’ break in service.

28. Partial retirement and contractual redundancy

The TCS Handbook section 16.6 states the following employment will not count as reckonable service:

employment that has been taken into account for the purposes of a previous redundancy, or loss of office payment by an NHS employer

where the employee has previously been given NHS pension benefits, any employment that has been taken into account for the purposes of those pension benefits.

Therefore, any service calculating partial retirement benefits should not be taken into account for the purposes of calculating a contractual redundancy payment and this should be discounted for the purposes of a future redundancy payment.

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It is important for NHS employers in England to be aware of the key issues involved in managing the redundancy process.