Date posted: 01/08/2009

Audience: Managers who have responsibility for dealing with partial retirement requests from staff

Action: Adjust working practices, if necessary.

Timing: Ongoing

Background

Partial retirement enables members who are approaching or are over their scheme pension age to take some, or all, of the pension they have built up whilst continuing to work. To do this they must reshape their job and reduce their pensionable earnings by at least 20%. EPNs 204 and 221 told you about your responsibilities in the partial retirement application process.

At the Pensions Conference held in April this year, we asked for feedback on how partial retirement was working for employers. A significant number of the comments we received were from delegates who were unsure of the decisions they could make when a member who has taken partial retirement subsequently requests a change in their job or applies for another job which would result in their earning more money than originally agreed under the partial retirement terms. This EPN sets out to clarify the position.

How is partial retirement supposed to work?

The spirit of the policy was much talked about at the conference. The idea of partial retirement is to help the member move gradually into retirement; it can also help employers restructure their business and give them the opportunity to develop inexperienced staff. A member does not have an automatic right to reshape their job so that they can take partial retirement. It is the employer’s decision whether to agree to allow the member to reshape their job, by part time working or downgrading. Your business must be able to bear the consequences of allowing someone to reshape their job so that they can partially retire.

Partial retirement in practice

Whilst the decision to approve job reshaping is expected to last until retirement, people’s circumstances can change. We would not be concerned about a subsequent promotion or increase in working hours unless this had been contrived between the employer and employee at the time of partial retirement.

Although there is an impact on pensionable earnings, the member’s pension will be abated where appropriate, which minimises the risk of the schemes facing extra cost.

To clarify, it is your responsibility to:

  • decide whether or not it is in the interests of the business to allow job reshaping so that members can take partial retirement;
  • approve the relevant job changes;
  • remind members who request partial retirement that they must read the booklet, called ‘Partial retirement’. (Note that Condition 1 in the booklet states ‘You and your employer should expect the job reshaping to apply through to your final retirement.’)
  • complete the appropriate forms and follow the process as laid down in EPNs 204 and 221.
  • complete a further CSP13 form if you agree to further reshape a job. This tells Capita Hartshead that there is to be an increase or decrease in salary; they will apply abatement (or a higher or lower rate of abatement if it already applies).

Appendix A lists a number of questions that delegates raised at the conference. We have answered them as appropriate to our position as policy managers of Civil Service pensions. If you have questions on general employment issues you should speak to your HR business partners or legal advisers.

Contacts

Enquiries about content, distribution or to receive in a different format

employerhelpdesk@cabinet-office.x.gsi.gov.uk
01256 846414
Employer Helpdesk
Civil Service Pensions
Grosvenor House
Basing View
Basingstoke
RG21 4HG

Attachments

Published:
1 August 2009
Last updated:
24 April 2023