Proposals to retain more staff as part of the latest NHS pension consultation

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Yet another consultation has been launched by the Department of Health and Social Care which puts forward changes to the NHS pension scheme.

The latest proposals include previously suggested changes to contribution rates as well as removing the abatement rules for members from April.

Abatement is the process which limits your NHS pension in payment if you return to work in the NHS after some types of retirement. The NHS Pensions Agency describes this as ‘reducing pensions pound for pound if their earnings plus the ‘unearned’ element of their NHS pension exceed their pre-retirement NHS pensionable earnings’.

The consultation suggests this move is to help retain staff in the health workforce.

Abatement was suspended during the Covid-19 pandemic in order to encourage recently retired scheme members to return to work. This meant they could do so without incurring a penalty on their pension, but was due to be put back in place in March 2025.

But as part of the 2023-24 pay deal, the government has outlined its intention to permanently remove abatement from April.

The Department of Health and Social Care said: “For members with long careers, the abatement ceiling has previously prevented them from working more than half time in the week should they return to work before age 60.

“The removal of abatement is important in the context of the delivery of NHS services. [It] is currently suspended to March 31, 2025 and permanently removing it ensures a continued capacity boost beyond that point because members can continue to work above their abatement ceiling.”

In 2022, figures published by Quilter revealed that more than 7,000 doctors and nurses were at risk of a financial penalty on their pension as a result of the abatement rules coming back into force.

The consultation closes on 7 January 2024.

Approver Quilter Financial Services Limited and Quilter Mortgage Planning Limited 09/02/2024

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