Most of our readers will be familiar with the concept of 24 hour retirement and that to be eligible, you need to leave the NHS for 24 hours. For a GP partner, this means resigning from the partnership for 24 hours. Single handers need to go into partnership with another eligible person and transfer their core contract, giving 28 days’ notice to NHS England. Salaried GPs need to terminate their contract of employment for 24 hours.
All of the above carry a certain degree of risk. Not being re-admitted into the Partnership, your core contract not being transferred back and contracts of employment being terminated are all possible outcomes that will keep you awake at night. Whilst the risk can be managed by having robust legal documentation drawn up and entered into before you take 24 hour retirement, it is still an arrangement that requires forward planning and cooperation from others.
The good news is that from 1 October 2023, there is a new option for some members called partial retirement, also known as drawdown.
What is partial retirement?
Partial retirement is already available to members with 2008 Section and 2015 Scheme benefits but now it also applies to members with 1995 Section benefits. Many people looking to retire now will be members of the 1995 Section, so this is of particular relevance to them.
NHS Pensions say that members aged 55 and over can choose to take part or all of their pension benefits in monthly amounts whilst continuing in NHS employment, without having to leave the NHS for 24 hours. Instead, you need to reduce your pensionable pay by 10%.
For GP Partners and single handers, that is interpreted as reducing hours by 10%. For a GP working 10 sessions a week, this means they will need to drop a session. The reduced hours must continue for at least 12 months. Salaried GPs will need to take a 10% cut in pensionable pay for a similar term.
Obviously there are restrictions on what is available to each individual. There’s a minimum age for triggering partial retirement and it’s also restricted if taken below normal retirement age. You must be an active member of the NHS Pension Scheme and not have opted out.
Things to consider
It is very hard to predict how and when any of us may want to retire, so the key is to keep your options open. GP Partners will want to ensure that they have the option to take either 24 hour and/or partial retirement and this is best documented in the Partnership Deed. It should include a right to trigger 24 hour retirement and a right to be re-admitted into the Partnership afterwards; also a right to trigger partial retirement and reduce working hours, whilst setting out the impact on profit shares for doing so.
Single handers will want to decide whether they can accept the financial and operational implications of partial retirement, but if they want to do this then there is no longer any need to transfer their core contract for 24 hours by entering into a fixed term partnership and can instead reduce their hours and hire a locum or salaried GP to cover the reduced sessions. This may well be a more attractive option for single handers than 24 hour retirement.
Employees should check their employment contract and if necessary, start a conversation with employers about how they might support their plans.
How we can help
Your partnership deed needs to make clear whether these retirement options are available to you. Simply send your Partnership Deed to email@example.com and we will carry out a *free health check* to see if both 24 hour retirement and partial retirement are covered, and whether it is generally fit for purpose.
If you prefer to have a free initial consultation about your retirement plans or any other legal issues, please telephone 01483 511555 or email firstname.lastname@example.org
DR Solicitors does not provide pensions or financial advice and we encourage you to seek independent advice from an IFA before making any decisions with regards to your pension.