24 Hour Retirement for GPs
In 2006 the NHS Pensions Agency reviewed and clarified the arrangements that enable General Practitioners to take 24 hour retirement in order to trigger their pension benefits. This opportunity exists for GPs of any contractual status, but has particular implications for partners as the underlying requirement of the arrangements is that members must demonstrate a clear intention to retire.
The emergency coronavirus legislation has relaxed the 16-hour rule for 24-hour retirement: the rule restricted those in the 1995 NHS Pension Scheme to working a maximum of 16 hours per week during the month following 24-hour retirement. There is now no restriction.
Members of the 2008 and 2015 pension schemes who had elected to draw down a proportion of their benefits and continue working previously had to reduce their pensionable pay by 10 per cent. This requirement has also been suspended.
Once the COVID-19 pandemic ends, a six-month notice period will be given before the suspension is lifted to allow a readjustment to working patterns if necessary.
NHSBSA have produced a helpful FAQ to cover the changes.
When reading the content below (pre-covid) please bear in mind the temporary suspension information above.
Rules for NHS Pension Scheme Members
All Medical Practitioner Scheme members must:
- Retire from their NHS Contracts for not less than 24 hours
- Must not work more than 16 hours per week in the first month after retirement
For Type 1 Medical Practitioners (partners) this means that they must resign from any involvement in a GMS contract, PMS agreement, or APMS Contract. Such GPs cannot undertake any NHS work, including locum, OOHs, or salaried employment, for at least 24 hours.
Type 2 Practitioners (salaried GPs) must also resign from their NHS contract of employment with their practice.
Locum Practitioners must have no involvement in NHS work for at least 24 hours.
GPs who have an additional part-time NHS-pensionable post (such as hospital or GPwSI work) are not required to resign that post for 24 hours if it involves working for less than 16 hours per week. They must, however, stop paying pension contributions related to that post. This additional work also counts towards the maximum 16 hours per week that may be undertaken in the first month following retirement, as does any NHS locum work.
It is for the GP to prove compliance with the 16 hour per week rule; if this is exceeded pension payments will be stopped and a member may have to repay any pension benefits that have already been received.
After the first month, there are no restrictions on the number of hours that may be worked in the NHS.
GPs should note that they do not have to resign from the Performers List in order to take 24-hour retirement.
Implications for Partnerships and GMS/PMS/APMS
All partners must resign their NHS contract for 24 hours. This has important implications for all partners both in terms of their GMS/PMS/APMS contract and their partnership agreement:
GMS contract holders must resign from their partnership in order to fulfil the requirement to retire from their NHS contract for 24 hours.
Partners of PMS practices must resign as a signatory to the PMS agreement. The partnership in this case is a separate legal entity to the PMS signatories. Undertaking NHS work following 24 hour retirement at the same practice would require either re-signing the PMS agreement or being employed/engaged by the practice (if it is to be the latter, then the GP will have to retire from the partnership noting that a person cannot be simultaneously a Partner within a business and employed by it). Any resignation by a PMS signatory represents a variation to the PMS agreement, and what may then occur is at discretion of the commissioner. The LMC strongly recommends practices informally discuss their proposed plans with the commissioner.
Some partnership agreements may not include any reference to 24-hour retirement, and even if they do there may not be any provision for the terms of the partner's return to practice. It is therefore recommended that either Partnership Agreements are amended to take into account the opportunity to take 24 hour retirement, or a legal deed is signed prior to the 24 hour retirement setting out the terms and status under which a GP may return to the practice following their retirement. There is no obligation to make such formal agreements, but there is also no automatic right for a partner [or salaried GP] to be readmitted to a practice under their pre-retirement terms.
Financial Implications of 24 hr Retirement
There are two main financial implications following 24 hr retirement, aside from no longer making pension contributions.
The first is the way in which a partnership will treat the pension contributions previously made by a partner who rejoins that partnership after 24-hour retirement. A GP's pensionable earnings are their share of the gross NHS profits, and their pension contributions are deducted from this. If a partner is no longer contributing to the NHS pension scheme, this deduction cannot be made. It therefore follows that a partner who has taken 24-hour retirement is entitled to receive their normal profit share, and will therefore have a greater profit than those partners who are still making superannuation contributions.
It is recommended that colleagues who take 24-hour retirement should, during that financial year, adjust their accounts to reflect a 24-hour period of no income.
Colleagues planning to take 24-hour retirement should:
- Discuss this option with their financial adviser.
- Contact the NHS Pensions Agency to confirm eligibility and arrangements – particularly if they hold more than one NHS contract'
- Discuss their plans with their partners (if applicable) and decide on a mutually agreed approach, particularly in terms of financial arrangements that may apply on a return to a partnership
- Consider succession planning.
- If a partner of a PMS practice, discuss the variation to the agreement with the commissioner.
- Follow the 24-hour retirement and the subsequent one month 16-hour/week rule and maintain records to document this.
NHS pension member hub: https://www.nhsbsa.nhs.uk/member-hub
All Performer List processes, including 24 hour retirement, are now accessed through PCSE Online .