Victory for the Mail as NHS bans fat cats’ pensions ruse
After we revealed top staff cash in by retiring for just 24 hours...
A REVOLVING- door scandal that allows NHS executives to ‘retire’ for just 24 hours before being rehired for exactly the same role is to be banned in a victory for the Mail. Thousands of bosses have exploited a loophole that lets them stand down temporarily and start withdrawing their generous pensions – before returning to their old jobs and six-figure salaries in days.
Some have taken out tax-free pension lump sums worth up to £250,000 and used the money to pay off their mortgage or buy a second home.
But under new rules from the Department of Health, staff who want to retire will only be allowed back to the same hospital in special circumstances, such as an experienced nurse who wants to leave her full-time post to work on just one or two days a week.
The crackdown follows a series of Mail investigations that exposed how NHS bosses were routinely retiring, cashing in their pensions, then coming back. They included Sue James, chief executive of Derbyshire Hospital, who claimed a £155,000 pension lump sum while still earning a £200,000 salary.
The rules, which come into force immediately, state staff cannot quit for 24 hours for financial gain. Instead, managers must consider whether there is a genuine business case for rehiring someone.
A Department of Health spokesman said last night: ‘The Mail has highlighted an important issue and taxpayers rightly expect salaries to be appropriate.We are clear that staff should not gain financially by retiring and returning to work and employers should justify re-employment on the grounds of need and value for money.
‘We want to encourage former NHS staff to bring their skills and experience back to help provide outstanding patient care, but taxpayers rightly expect salaries to be appropriate.’
NHS figures show that at least 7,143 staff under 60 used the ruse – but this doesn’t include GPs, who are thought to be among the most likely to use the loophole.
The NHS is facing its worst financial crisis in a generation as it struggles to meet the needs of the rising and ageing population. Hip and knee replacements and cataract surgery are being rationed and nurses have had their wages capped for seven years.
Labour health spokesman Justin Madders said: ‘It’s hard to understand why managers are allowed to draw six-figure pension payouts, then just carry on working as before. Patients will want to know that every penny is being used to improve services, not going into the pockets of the management.
‘Ministers need to get a grip and make sure that the best interests of patients are being protected.’
John O’Connell, chief executive of the TaxPayers’ Alliance, said: ‘Taxpayers want their cash to be spent on frontline services and patient care, not lining the pockets of retirees who don’t actually intend on retiring.’
Ashley Seager, co-founder of the Intergenerational Foundation, which stands up for younger generations, said: ‘We support this crackdown. Retire and return is another example of baby boomers with their fingers in the till.’ Offi- cials believe the loophole is mostly exploited by well-paid doctors and managers, whose pensions may be near to the £1million limit.
Once their pension pots exceed this ‘lifetime allowance’ cap, they are taxed heavily when money is paid out. But by taking temporary retirement, they can withdraw a large proportion of their pension before it reaches the cap.
The Government has stopped short of banning 24-hour retirement completely because it can occasionally be beneficial.
The NHS is severely understaffed and trusts are desperately trying to retain nurses, midwives, certain specialist doctors and GPs.
TWO years ago, the Mail revealed how Sue James, the chief executive of a cashstrapped hospital trust, was allowed to retire, extract £155,000 from her taxpayerfunded pension and return to the exact same £200,000-a-year job 24 hours later.
As our investigations have shown, she is far from alone, and abuse of the ‘retire and return’ loophole appears rampant among senior hospital executives.
Indeed, official figures show more than 7,000 staff have retired one day before coming straight back to work – after taking vast sums from their pension pots.
So the Mail welcomes Jeremy Hunt’s decision to ban this shameful practice and urge him to watch closely for new ways in which NHS fat cats are milking the system. IN 1932 – when football was still just a game and not a plaything for plutocrats – Stanley Matthews signed for Stoke City for £10, earning £5 per week. Yesterday the Brazilian forward Neymar signed for Paris Saint-Germain from Barcelona for a record £198million. After tax, he will earn £596,000 a week, paid for by the Qatari government, whose critics accuse it of sponsoring terrorism. What a grubby business football has become.