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24 hour retirement - how to stop making pension contributions and start accessing payments

If you feel you are ready to stop paying into your NHS pension, but still feel able to work, or if you are overwhelmed with the management and administration of your practice and want the freedom to work fewer hours – why not consider a 24 hour retirement from your partnership?

What does it involve?

You retire temporarily with agreed terms to return.

What effect does it have?

  • you can cease making NHS pension contributions;
  • you can start drawing pension payments;
  • you can get the release of your pension lump sum;

What rules are there?

  • you must retire for at least 24 hours and cease providing medical services;
  • other than in the first month after you retire you must not work more than 16 hours per week;
  • there must be arrangements in place for the practice contract to continue without interruption.

You will have to make sure that the practice contract can continue during the period of the retirement (and it is irrelevant that the period of the retirement is composed only of times when there are no surgeries. Your contractual commitment to the PCT is 24/7).

This is straightforward in the event that you are in partnership. Your medical services contract will have provisions concerning retirement which must be followed. The practice notifies the PCT of your retirement and in due course notifies of your return (if you return as a partner). If you have a GMS contract the PCT only have to be notified, formal consent is not required. If you have a PMS contract PCT consent is needed. This is usually given but the PCT has discretion to refuse and might do so if it sees an opportunity to alter the terms of the PMS contract. Given the likelihood of the merger of GMS and RMS contracts we see this as increasingly likely.

You will also however have to agree your “retirement” with your partners because you have a legal relationship with them. This may be set out in a written partnership agreement. It may specifically provide for 24 hour retirements in which case those provisions need to be followed and if it does not you will have to agree terms with your partners and those need to be documented by way of a formal deed of variation/retirement.

If you have no formal partnership agreement then, unless all your partners agree the only exit route is a general dissolution of the partnership (which will additionally impact on the continuance of the GMS/PMS contract).

If you are a sole practitioner you will need to recruit one or more of the practitioners as partners in the first instance. You should enter into a formal written agreement with him/them covering the proposed relationships, otherwise you may find that you cannot undertake the 24 hour retirement or perhaps that he/they won’t leave again.

After that you can take the steps with the PCT detailed above.

Before you go ahead…

Finally before you take action, you need to consider the terms upon which you want to return after the “retirement”.

Do you actually want to continue as a partner? You will still have the legal responsibilities and liabilities that you had before albeit you will no longer be able to make pension contributions.

Subject to any provisions in any partnership agreement to which you are a party you could return to practice as a salaried doctor or as a self-employed independent consultant to the practice and you should think about how many sessions you want to offer, any specialised clinics you could provide and so forth.

When you have some thoughts together and know what your position is under the medical services contract and partnership law you are in a position to start talking to your partners, the PCT and third parties where relevant.

The DWF healthcare team has experience and expertise to guide you through the maze and help you formulate the steps you need to take to implement the next part of your career.

N.B. The foregoing applies in all material respects to dental practitioners operating general/ personal dental service contracts with a PCT.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.