Pensions

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Draw down FAQs

Frequently asked questions about pension draw down;

What is draw down?
What do I need to do to use this facility?
I am a deferred member of the 2008 section. Can I apply to draw down?
How much pension can I draw down?
How often can I draw down part of my pension?
What are the implications of drawing down before the normal pension age of 65?
After draw down, can I continue to build up further scheme membership?
Will my pension benefits be tested against the Lifetime Allowance (LTA) when I draw down part of my pension?
Does my CEA or Distinction Award continue to be payable after I have drawn down?
What happens if I die during draw down?
What happens if I am made redundant after I have drawn down part of my pension entitlement?
How do I apply for draw down?
What choices do I have in respect of the lump sum taken when accessing my 2008 section benefits by draw down?

 

What is draw down?

Draw down or partial retirement is the facility in the 2008 section of the NHS pension scheme and in the 2015 CARE scheme which allows members who reach the minimum pension age of 55 to reduce their responsibilities or hours and start drawing part of their benefits.

 

What do I need to do to use this facility?

  • You must be a contributing member of the 2008 section of the NHS pension scheme/2015 CARE scheme
  • You must be over the minimum pension age of 55
  • You must reduce your actual pensionable pay by at least 10%. For GPs this means a 10% reduction in commitment
  • You must have been earning your previous level of pensionable pay (or worked to the same commitment if you are a GP) for at least 12 months
  • You must reasonably expect that the new reduced level of pensionable pay (or commitment) will last for at least twelve months


I am a deferred member of the 2008 section/2015 CARE scheme. Can I apply to draw down?

You can only use draw down if you are actively contributing to the scheme or if you are excluded from the scheme on account of reaching the maximum service limits (2008 section only).

 

How much pension can I draw down?

You can draw down anywhere between 20% and 80%of your accrued pension.

 

How often can I draw down part of my pension?

You can use draw down twice before retiring completely, provided that you have not yet already drawn the maximum 80% of your benefits.

 

What are the implications of drawing down before the normal pension age of 65 (2008 section) or before your State Pension Age (2015 CARE scheme)?

If you draw down part of your pension before the normal pension age of 65 (2008 section) or before your State Pension Age (2015 CARE scheme), those benefits will be actuarially reduced.

 

After draw down, can I continue to build up further scheme membership?

Yes. You can continue to contribute towards the scheme until you complete 45 calendar years service (2008 section) or you reach age 75.

 

Will my pension benefits be tested against the Lifetime Allowance (LTA) when I draw down part of my pension?

The part of the pension that you draw down will be tested against the LTA.  The minimum amount you can draw down is 20% of your accrued benefits which cannot be less than 0.05% of the Lifetime Allowance applicable on the day before you exercise your reduction in pay. 

 

Does my CEA or Distinction Award continue to be payable after I have drawn down?

Your CEA or distinction awards will cease to be payable if you draw down part of your pension entitlement. Pre-retirement CEAs and Distinction Awards cannot be reinstated after retirement. If you retire and return to work, you will be able to apply to re-enter the CEA Scheme or its successor as Clinical Excellence Award holders are currently able to.

 

What happens if I die during draw down?

If you die during draw down the benefits paid to your dependants will be calculated in two ways.

The portion of your pension which is in draw down will be paid as per the rules for death after retirement and the portion of your pension which has not been drawn down will be paid as per the rules for death in service.

Please refer to our FAQ on ‘death in service' for further information.

 

What happens if I am made redundant after I have drawn down part of my pension entitlement?

The redundancy rules will continue to apply to that portion of your pension benefits which is not in draw down.

Please refer to our FAQ on ‘redundancy’ for further information.

 

How do I apply for draw down?

You will need to request a retirement form from your employer, who will confirm that you meet the relevant criteria.

 

What choices do I have in respect of the lump sum taken when accessing my 2008 section/2015 CARE scheme benefits by draw down?

Each draw down event is considered as a separate pension application.

If you are a member of the 2008 section/2015 CARE scheme, you will not automatically receive a lump sum on retirement. Instead, you may be able to choose whether to access a lump sum (up to the maximum permissible) by giving up some of your annual pension at a rate of £1 of pension for £12 of lump sum.

If you switched to the 2008 section via the Choice exercise then a portion of the Mandatory Lump Sum based on the draw down percentage must be paid and you will have the option to increase the lump sum (up to the maximum permissible) by giving up some of your annual pension at a rate of £1 of pension for £12 of lump sum.

 

I transitioned to the 2015 scheme from the 2008 section. Can I choose which section I draw down from?  

No. When you choose to draw down between 20% and 80% of your accrued benefits this will be from your total pension combined.


When I finally retire how are the remaining benefits calculated?

An actuarial calculation will be undertaken to arrive the benefits remaining to be paid to you.