MUTUALLY AGREED RESIGNATION SCHEME (MARS) (June to TBC 2013)

Transcription

1 MUTUALLY AGREED RESIGNATION SCHEME (MARS) (June to TBC 2013) 1. INTRODUCTION 1.1 Mutually Agreed Resignation Scheme (MARS) is a scheme which has been developed to help the organisation meet the financial challenges including management costs and workforce reductions, service redesign and other efficiency needs. 1.2 The purpose of the MARS is to create job vacancies which can be filled by redeployment of staff from other jobs, including staff at risk of redundancy. Posts vacated will not always be replaced in their existing form instead supporting wider workforce redesign. 2. PURPOSE 2. 1 The aim of this policy is to support the organisation in the delivery of Cost Improvement Projects, meeting the financial challenges (including management costs and workforce reductions), service redesign and other efficiency needs. 3. SCOPE 3.1 The Policy principles apply to staff employed on Agenda for Change terms and conditions of service. However the Trust will determine the Divisions, Services, Functions or Staff Groups that the scheme will apply to when run. Eligibility for the current round will be restricted to:- Staff from Corporate Support Divisions & Functions Medical Secretaries 3.2 This policy is not applicable to Temporary Workers, staff not on Agenda for Change Terms and Conditions, Executive Directors and staff covered by Medical & Dental Whitley Council conditions of service. 4. DEFINITION 4.1 MARS is a scheme under which an individual employee, in agreement with the organisation, chooses to leave employment in return for a severance payment. A Mutually Agreed Resignation (MAR) is not a

2 redundancy or a voluntary redundancy, which would be covered by Section 16 of the NHS terms and conditions of service handbook. 5 ROLES AND RESPONSIBILITIES 5.1 Line managers The line manager is responsible for: Ensuring that employees eligible for consideration under the scheme being run are made aware of the MARS policy and their responsibly to comply with the relevant request timescales 5.2 Human Resources The Department is responsible for: The provision of specialist advice on the interpretation and application of the policy Administering the schemes when run. 5.3 Employee 4Role of Employees The employee is responsible for ensuring they comply with the timescales, obligations and criteria set out in the policy. 6. BUSINESS CASE 6.1 Any application under MARS must demonstrate that the departure of an employee on voluntary terms would be in the financial and operational interests of the organisation. 6.2 The business case to leave under MARS will need to demonstrate: 7 ELIGIBILITY a) why the severance payment represents value for money; b) that it will not have an adverse affect on the financial targets or service delivery. 7.1 When running a MARs scheme, a decision will be made by the executive team on eligibility to apply which will include hard to recruit to professional staff groups, pay bands and length of the service. Each application from eligible employees will be individually considered on its merits as set against the business criteria set out in paragraph The following groups will not normally be allowed to apply to leave the organisation under this scheme: where an employee has already formally given notice of their intention to resign/retire, prior to the date when applications are formally being sought;

3 7.2.2 where an employee has already secured employment with another employer; an employee has been notified of the date of the termination of their contract of employment for any other reason; an employee is undergoing a formal performance management procedure to address poor performance; an employee is undergoing a formal conduct procedure; employees are currently in a selection pool identifying them for potential redundancy. MARS should not to be used as an alternative to any other exit provision that may apply in the circumstances. 7.3 The scheme is not available to Bank workers or NHSP workers. 7.4 From time to time the organisation may decide to operate MARS. It may be restricted to target groups and will be time-limited. Outside of publicised timeframes MARS would remain closed. 7.5 Each application from eligible employees made in accordance with MARS will be considered on its own merits. The organisation reserves the right to determine whether or not an application will be approved and there will be no right of appeal on the part of those employees whose applications are not successful. 7.6 MARS is entirely voluntary from the employer s and employee s perspective and there is no legal obligation on the part of the organisation to accept any individual application. 7.7 A MAR is viewed as being a voluntary resignation on the part of the individual employee, in return for a severance payment. There may be significant financial and life-style implications for the employee. Appendix A sets out some of the implications of submitting an application and Appendix B lists some responses to frequently asked questions. Employees may wish to supplement this by seeking advice from a regulated financial advisor. 8 RE-EMPLOYMENT 8.1 Employees who leave the NHS under MARS would not be re-employed under normal circumstances by the NHS in England, in the same or a different post, before a period of one month has elapsed. If an individual does return to the NHS within one month they would be required to repay any MARS payment in full. 8.2 Where an employee returns to work for the NHS in England within six months and before the expiry date of the period for which they have been compensated (as measured in equivalent months/part-months salary), then an employee would be required to repay any un-expired element of their compensation. This would be reduced to take account of any appointment to a lower grade and reflect net salary.

4 9 COMPROMISE AGREEMENT 9.1 Employees who decide to proceed with a MAR will be issued with a Compromise Agreement to sign, which will set out the financial and other terms under which the employment relationship will end. 9.2 Independent legal advice will need to be obtained by the employee before signing the Compromise Agreement. The organisation will contribute up to a maximum of inclusive of VAT towards the cost of this legal advice. 10 PAYMENT RATE 10.1 MARS payments will be calculated using the model below. Reckonable Service (complete years) Scale of Payment 1 year s continuous service (organisation/nhs) 3 months basic salary 2 years continuous service (organisation/nhs) 3 months basic salary 3 years continuous service (organisation/nhs) 3 months basic salary 4 years continuous service (organisation/nhs) 3 months basic salary 5 years continuous service (organisation/nhs) 3 months basic salary 6 years continuous service (organisation/nhs) 3 months basic salary 7 years continuous service (organisation/nhs) 3 ½ months basic salary 8 years continuous service (organisation/nhs) 4 months basic salary 9 years continuous service (organisation/nhs) 4 ½ months basic salary 10 years continuous service (organisation/nhs) 5 months basic salary 11 years continuous service (organisation/nhs) 5 ½ months basic salary 12 years continuous service (organisation/nhs) 6 months basic salary 13 years continuous service (organisation/nhs) 6 ½ months basic salary 14 years continuous service (organisation/nhs) 7 months basic salary 15 years continuous service (organisation/nhs) 7 ½ months basic salary 16 years continuous service (organisation/nhs) 8 months basic salary 17 years continuous service (organisation/nhs) 8 ½ months basic salary 18 years continuous service (organisation/nhs) 9 months basic salary 19 years continuous service (organisation/nhs) 9 ½ months basic salary 20 years continuous service (organisation/nhs) 10 months basic salary 21 years continuous service (organisation/nhs) 10 ½ months basic salary 22 years continuous service (organisation/nhs) 11 months basic salary 23 years continuous service (organisation/nhs) 11 ½ months basic salary 24 years + continuous service (organisation/nhs) 12 months basic salary 11 RECKONABLE SERVICE 11.1 Reckonable service means continuous full-time or part-time employment with present or any previous NHS employer where there has been a break of service of 3 months or less, as at the time of leaving. Employment that has

5 been taken into account for the purposes of a previous redundancy or loss of office payment by an NHS employer, will not count as reckonable service Any severance payment made will be offset against any subsequent payment made for the purposes of any future calculation of redundancy payments in subsequent employment. This would apply where the period of employment covered by the severance payment is taken into account in calculating the redundancy payment The severance payment would be subject to having not secured another job in the NHS at the time of leaving An employee accepting a MARS severance payment and resigning from the organisation may find alternative employment elsewhere in the NHS subject to the conditions set out in section 8 above. In the event that any future NHS employer intends to make the employee redundant, the employer will be notified of this provision of MARS The employee s proposed leaving date will be subject to negotiation and mutual agreement between the employer and employee. 12 PENSIONS 12.1 Staff whose application under MARS is accepted, and who have reached their normal pensionable retirement age, will also be eligible to claim their NHS pension benefits. This will not involve the organisation in incurring additional costs related to the payment of pension benefits. For members of the 1995 Section of the NHS Pension Scheme, normal pension age is 60 (55 for members of the special classes ). For members of the 2008 Section of the NHS Pension Scheme, normal pension age is Staff whose application under MARS is accepted and who have reached their minimum pension age, may also wish to apply for Voluntary Early Retirement with reduced pension benefits. For members of the 1995 Section of the NHS Pension Scheme, minimum pension age is 50 for most but 55 for some members who first joined or returned on or after 6 April For members of the 2008 Section of the NHS Pension Scheme, minimum pension age is The organisation is unable to guarantee the timing of the payment of such benefits in line with any MARS payments and applications for pension benefits will need to be made in the normal manner by submission of a leave form Further information about the NHS Pension Scheme is available at 13 APPLICATION PROCEDURE 13.1 Employees who wish to apply under MARS should discuss their case with their line manager in the first instance. Informal discussions will be confidential and not make a binding commitment on either party. The Human Resources team will also be available to provide advice on the scheme Employees should then submit their application for MARS by the notified closing date, using the application form in Appendix C to their line manager.

6 13.3 The line manager, with advice from Human Resources, will be asked to indicate their support or otherwise for the application, outlining the potential financial savings and payback time along with reassurance as to how the business needs of the organisation will continue to be met. The line manager should also complete the Prioritisation and Quality Assessment Tool (available from HR) The application must be submitted to the relevant Director of Divisional General Manager for final approval before submitting to the Director of Personnel and Development If an application is not considered feasible by the Line Manager or Director/Divisional General Manager it will not be submitted to the MARS Panel. The Line Manager, Director or Divisional General Manager will advise the employee accordingly The Director of Personnel and Development will arrange for their application to be acknowledged within 5 working days of receipt, the information submitted will then be verified and the potential MARS payment calculated Once an application is submitted, it will be dealt with in strict confidence by all those involved with the process Applications will be submitted to a MARS Panel comprising the following: Director of Personnel and Development Director of Finance Director of Nursing/Director of Operations The panel will make the final decision on whether to accept or reject an application Where the MARS Panel approves an application, the Director of Personnel and Development will write to the member of staff confirming that their application has been approved, confirming the MARS payment, a mutually agreed leaving date and requesting their acceptance or rejection of the offer within a prescribed timescale Where the MARS Panel does not approve an application, the Director of Personnel and Development will write to the member of staff advising that their application has not been successful at this time A summary flowchart of the application / approval process is contained within Appendix D. 14 EQUALITY STATEMENT 14.1 The Trust is committed to preventing discrimination, valuing diversity and achieving equality of opportunity. No employee will receive less favourable treatment on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation, or on the grounds of trade union membership. 15 REVIEW

7 15.1 A review of this document will be conducted every year or following a change to associated legislation or national/local terms and conditions of service and is the responsibility of the Director of Personnel and Development The Human Resources Department is responsible for developing the policy and for ensuring stakeholders were consulted with. The advice of the Equality and Diversity lead must be sought. For NHS Litigation Authority (NHSLA) policies, the author must seek the advice of the Compliance Manager Draft copies were circulated for comment before approval was sought from the relevant committees The Trust aims to design and implement services, policies and measures that meet the diverse needs of our service, population and workforce, ensuring that none are placed at a disadvantage over others. An Equality Impact Assessment Screening has been undertaken and there are no adverse or positive impacts (Appendix E) The author consulted widely with stakeholders, including: Partnership Forum Senior Managers Remuneration Committee Consultation took the form of a request for comments and feedback via . Hard copies were available on request Approval of the policy will be sought from the Remuneration Committee The policy will be reviewed every year. The author will be sent a reminder by the Corporate Governance Manager four months before the due review date. The author will be responsible for ensuring the policy is reviewed in a timely manner The reviewed policy will be approved by the Strategic Workforce Development Committee If this policy has been identified as required by the NHS Litigation Service (NHSLA), the author will ensure the Compliance Manager is sent an electronic copy The author must update the Document Control Report each time the policy is reviewed. Details of what has changed between versions should be recorded in the Document Control Report Significant revisions will require consultation with the Remuneration Committee.

8 15.12 For NHS Litigation Authority (NHSLA) policies, the author will notify the Compliance Manager when a revision is being made or when the document is reviewed. The Compliance Manager will ensure that the revised document meets the NHSLA/CNST standards The author must update the Document Control Report each time the policy is revised The author will comply with the Trust s agreed version control process, as described in the organisation-wide Guidance for Document Control After approval, the author will provide a copy of the policy to the Corporate Governance Manager to have it placed on the Trust s intranet. The policy will be referenced on the home page as a latest news release and staff will be informed that this policy replaces any previous versions Information will also be included in the weekly Chief Executive s Bulletin which is circulated electronically to all staff Line managers are responsible for ensuring this policy is implemented across their area of work Support for the implementation of this policy will be provided by the HR team The author is responsible for recording, storing and controlling this policy Once the final version has been approved, the author will provide a copy of the current policy to the Corporate Governance Manager so that it can be placed on the Trust s Intranet site (Bob). Any future revised copies will be provided to ensure the most up-to-date version is available on the Trust s Intranet site (Bob) All versions of this policy will be archived in electronic format within the Human Resources Team policy archive. Archiving will take place once the final version of the policy has been issued Revisions to the final document will be recorded on the Document Control Report. Revised versions will be added to the policy archive held by Human Resources Team To obtain a copy of the archived policy, contact should be made with the Human Resources Team.

9 15.24 Monitoring compliance with this policy will be the responsibility of the Human Resources Team.

10 APPENDIX A MUTUALLY AGREED RESIGNATION SCHEME GUIDANCE FOR STAFF 1. When considering applying for voluntary severance under the Mutually Agreed Resignation Scheme (MARS), it is important that you understand the implications of your decision and the transition involved with leaving the organisation. 2. Some of the implications for you to consider prior to submitting an application under MARS would include, for example: the possible loss of entitlements to welfare benefits mortgage protection insurance policies not covering resignations any possible impact on pensions lease car penalties multi-post contracts This list is not exhaustive. 3. Employers are not legally authorised under the Financial Services Act to give pensions or other financial advice to individuals. Therefore, you are encouraged to seek further independent financial advice. The following websites may be of assistance. IFA Promotion: The Personal Finance Society: Money made clear: 4. The following resources may also be able to provide additional advice and support: NHS Pensions: Benefits website: Citizens Advice Bureaux: 5. Frequently Asked Questions (Appendix B)

11 APPENDIX B MUTUALLY AGREED RESIGNATION SCHEME These FAQs cover four main areas: Mutually Agreed Resignation Scheme Pensions Annual Leave Re-employment MUTUALLY AGREED RESIGNATION SCHEME 1. What is a Mutually Agreed Resignation Scheme (MARS)? Mutually Agreed Resignation Scheme (MARS) is a scheme under which the organisation may offer a severance payment to an employee to leave their employment voluntarily. A MARS helps to increase flexibility for the organisation to be able to address periods of rapid change and service redesign. 2. What is the purpose of the scheme? The scheme has been developed to assist employers in addressing some of the financial challenges facing the NHS in the years ahead. Its key purpose is to create job vacancies which can be filled by redeployment of staff from other jobs or as a suitable alternative for staff facing redundancy. This scheme is time limited and has HM Treasury approval. 3. Does the scheme apply to all employees? No, not automatically. Each time the scheme is run, it may be restricted to Divisions, Services, Functions or Staff Groups depending on the business need the organisation is aiming to address. The eligible groups will be identified at the commencement of a MARS round. Most employees from within the target groups identified at the outset of the scheme being run are eligible to apply for a MARS, however each application will be individually considered on its merits against set business criteria. Section 7.2 of the Trust s scheme sets out general exclusions to eligibility. 4. What if an employee registers an interest in leaving under a MARS and then changes their mind about applying for the scheme? Registering an interest does not commit employees to proceeding with voluntary severance. Employees can withdraw their application at any time up to the point that they sign a compromise agreement. 5. What about employees currently absent from the organisation will they be able to apply? Yes, if they satisfy the eligibility criteria. This should include staff on maternity leave, long term sick leave, secondment or unpaid leave. The nature of their absence may

12 mean communications are difficult or sensitive, but it is important that their attention is drawn to the existence of the scheme. The organisation is responsible for identifying and contacting these employees to inform them about the scheme. 6. What if an employee approaches me directly for my opinion? (where I know that I could not support the application because the employee is essential to retain) Explain that there is a process and you will have an opportunity to provide your feedback if they apply. You cannot advise them personally on whether or not they should apply. 7. Are severance payments free of tax, NI contributions or pension contributions? HMRC advice states that under the terms of the national MAR Scheme, payments of 30,000 and under are usually exempt from tax and NIC. Additionally, providing the payment is in line with the terms of the MAR scheme, payments above 30,000 will not be subject to NIC. There are no pensions contributions payable by the employee or the employer on the payment received. 8. Can employees apply for the scheme if they have already indicated their intention to leave the organisation prior to the launch of the scheme? If an employee has already submitted their resignation or given some other kind of clear indication that they intend to leave the organisation, they are not eligible for a voluntary severance payment. If an employee asks to rescind their notice in order to apply for the scheme this should not be agreed to regardless of whether a termination notice has been completed. 9. What payments are being offered under MARS? The payment rate under this scheme is fixed at ½ month s salary for each full year of service up to a cap of 12 months salary, with a minimum payment of 3 months salary for 1 5 years reckonable service. For further information please see Mutually Agreed Resignation Scheme - Section How do the terms of MARS compare with redundancy payments? The MAR scheme is not a redundancy or a voluntary redundancy. Entitlements to redundancy are set out in Section 16 of the NHS terms and conditions of service handbook. 11. Could employees be classed as redundant, therefore potentially able to claim benefit? Employees are not being made redundant under MARS as they are leaving voluntarily. The national benefit rules are very complex and depend upon personal circumstances. If employees feel that they may have to rely on benefits, then they should seek advice before submitting an application. They could contact the National Benefits Helpline for advice: Tel: , or visit the Directgov website, or alternatively contact Citizens Advice on for further information.

13 12. What is basic pay? Basic pay is defined as the pay employees receive based on pay scale/band and as stated on their pay slip. It does not include any additional payment such as: Overtime/emergency work done/waiting lists Additional programmed activities On call Emergency Commitment payments Acting Up Special Duty/Enhancement payments Recruitment and retention Premia (Long & Short Discretionary points Distinction awards Band Supplements Intensity Supplements CD Responsibility Clinical Excellence Awards 13. Employees in receipt of protection for basic pay due to organisational change, is this protected? Yes, this is classed as part of basic pay. 14. If employees receive an increment after the closing date for this scheme, will this affect their severance pay? Basic pay will be confirmed to employees if their application is accepted. The payment will be based on the basic pay which they are entitled to on their last day of service. 15. If an employee accepts a MARS payment, leaves and is later made redundant from a subsequent NHS job, how is their subsequent redundancy payment affected? As set out in Section 20 of the NHS terms and conditions of service handbook, paragraph states: Any severance payment made will be offset against any subsequent payment made for the purposes of any future calculation of redundancy payments in subsequent employment, where the period of employment covered by the severance payment is taken into account in calculating the redundancy payment. For example, an individual leaves under the national MARS and receives a four month payment (eight years' reckonable service). If they were subsequently made redundant and this eight year period was used for the redundancy calculation, they would get their redundancy payment less any MARS payment. 16. If a pregnant employee applies to leave the organisation under MARS prior to going on maternity leave, how would this be dealt with under MARS? Where a pregnant employee has reached agreement to leave after the 11th week before the baby is due, their contract would need to be extended to allow them to receive occupational maternity pay and they would then receive their MARS payment at the end of their maternity leave.

14 For a pregnant woman who would leave before the 11 weeks prior to the baby being due, a business case would need to demonstrate the rationale why significantly delaying the leaving date would be appropriate. 17. If an employee is on maternity leave can they still apply for MARS? An employee (from within the target groups eligible for consideration of MARS) who is on maternity leave is still eligible to apply for MARS. However if they have indicated that they will be returning to work at the end of their maternity leave there may need to be an adjustment to the MARS payment to recover any overpayment of occupational maternity pay. The termination date will be the date that has been agreed as part of the scheme. 18. How should leavers under a MARS be recorded in Electronic Staff Record (ESR) and how will subsequent employers be aware of a payment having been made? Any employees leaving under a MAR scheme should be recorded on ESR as resignation and not voluntary redundancy. In the meantime, employers are advised to keep manual records of any such leavers so that ESR fields can be adjusted retrospectively once the new fields are available. Re-employing organisations should ensure new recruits who fall within the claw back arrangements, give their written consent for the appropriate sum to be deducted from their salary, as part of the recruitment process. PENSION QUESTIONS The Pension Scheme website s factsheet on Leaving Early and Transferring Out is available to download from their website. Employees can access the Pensions Website on What happens to their pension if employees leave? Employees can choose to: leave their pension contributions in the scheme transfer their pension to another scheme take their contributions out of the scheme if they have less than two years service apply for their Pension take voluntary early retirement subject to eligibility criteria claim their pension - subject to eligibility criteria 20. What happens to an employee s NHS pension if they leave under MARS? Under Age 50 Take their contributions out of the scheme if they have less than two years pension service.

15 Leave their pension contributions in the scheme if they have more than two years pension service and claim at normal retirement age. (usually age 60 for men and women in the NHS scheme) Transfer their pension to another scheme. Under Age 55 Apply for their pension benefits under Voluntary early retirement (VER) regulations. If the member has Special class status - this will also affect your pension benefits as VER regulations will apply. Leave their pension contributions in the scheme and claim at normal retirement age. Over Age 55 but under age 60 Apply for their pension benefits and take Voluntary early retirement. Employees with Special class status only - the pension benefits can be claimed in full. Important: If they do not claim your pension benefits when they leave on MARS but wait until a later date they will be classed as an ordinary member of the pension scheme and their pension benefits will be subject to VER regulations. Leave their pension contributions in the scheme and claim at normal retirement age. Over Age scheme - can apply for pension benefits scheme - under age 65, pension benefits can be claimed under Voluntary early retirement regulations. Age 65 and over, can claim pension benefits in full. Special Class Status (Nurses, MHO, Physio s) Special Class status applies to an employee who has been a member of the pension scheme prior to 6 March 1995 and has not had more than a 5 year break in service since that date. 21. What happens if employees leave their pension contribution in the scheme? If employees leave their pension contributions in the scheme, it will be index linked. This means it will grow in line with inflation, with the annual uplift being applied each April. If employees do rejoin the scheme within 12 months, their membership will link up and all the membership will count when their retirement benefits are worked out. If employees have less than 2 years membership and choose not to return to the NHS within 12 months then they can apply for a refund. They do not have to wait until they have been out of the NHS employment for 12 months to exercise this option. If employees do not return to NHS employment within 12 months and have not applied for a refund, the pension agency will contact them at their last known address and advise them that they have insufficient membership to retain an NHS pension and the contributions will be refunded.

16 Employees can apply to have their pension paid when they reach normal pension age, provided they have qualified for benefits. Those employees with a pension under the 1995 Scheme who leave under MARS and then return to the NHS within 5 years will be eligible to rejoin the 1995 Scheme so long as they have not already taken their pension. 22. How do employees transfer their pension credit to another scheme? If employees decide to transfer their benefits, they should contact their new provider. They will explain how much pension their transfer value will buy in their scheme and employees can decide if they want this transfer to happen. Transfer can only take place if their new scheme is registered with HMRC. Those with at least 2 years membership can apply for a transfer at any time before they reach normal retirement age. Those with less than 2 years membership would need to register with a new registered pension scheme within 12 months of leaving NHS pensionable employment. In addition they would need to apply for a transfer within 12 months of joining a new scheme or before they reach normal retirement age, whichever is earlier. 23. How do employees take their contributions back? Employees can only do this if they have less than 2 years service. Employees will not receive the full amount of pension contributions they have paid. The amount paid will be subject to Tax and National Insurance deductions. Employees can download a form to request a refund of contributions from the pension website. 24. If employees are of minimum pension age can they take a MARS payment and apply for their pension? This may be possible - to qualify for early retirement when leaving the NHS under this voluntary scheme, staff in the NHS Pension scheme must have at least 2 years pensionable service. If the member of staff has been an active pension scheme member since 5 April 2006 or earlier, early retirement may be possible from age 50. If the member of staff joined the NHS pension scheme after this date, early retirement may be possible from age 55. However, unless employees are over age 60, their accrued benefits will be reduced by an actuarial sum, based on the cost to the scheme of them accessing their pension benefits early. Employees in the NHS Pension scheme who qualify for early retirement may also choose not to access their pension benefits at all immediately on leaving, in which case their accrued pension benefits will remain in the pension scheme and may be either taken as a deferred pension at normal retirement age or may be transferred to another pension scheme in the future. 25. If an employee has an outstanding application for retirement on grounds of ill-health can they apply for the MARS? Organisations would not be able to consider this whilst an ill health application is being considered by NHS Pensions. However, if employees are told that it is not successful and they are not appealing against the decision, they may submit an application for voluntary severance by the end of locally agreed date.

17 Under the voluntary severance scheme, there is no provision for organisations to make a payment which would give employees an enhanced early retirement pension payment. Therefore, should employees leave their organisation under voluntary severance terms over the age of 50; they will not be eligible for an enhanced retirement package. If they wish to leave the organisation in these circumstances, they should be advised to seek further guidance prior to opting for voluntary severance so that they are aware of all the implications. 26. I am leaving the NHS on MARS terms and taking (actuarially reduced) early retirement benefits from the NHS Scheme. Can my employer use the MAR lump sum to prevent my pension benefits from being reduced? Not directly; your benefits from the NHS Scheme must be reduced because they are being paid before your normal retirement age. But you can if you wish, ask your employer to use some or all of your MAR lump sum to buy "Additional Pension" (AP). AP is paid at the same time as your early retirement benefits and could help offset the actuarial reduction. Remember though that AP increases only your early retirement pension, not your lump sum. 27. Can my employer buy AP at any time? Your employer can apply to buy AP at any time up to the date of your MAR. AP cannot be bought after you have left the NHS. 28. Will my employer be able to buy enough AP to completely offset the reduction of my early retirement benefits? NHS Scheme early retirement benefits are reduced according to how early you take them. The reduction is biggest at age 50 and much smaller at age 59. AP can be bought in units of 250, up to a maximum of 5,000. The cost depends on the amount of AP you buy and your age at the time of purchase. Remember though that the charges for AP assume scheme members will retire at normal retirement age. This means that the AP will be reduced, according to the age at which you take MAR. Your employer will be able to help you work out how much AP your MAR lump sum would buy. For example: An employee who is a member of the 1995 Section with 20 years scheme membership and pensionable pay of 40,000 would receive a pension of 10,000 if they retired at 60. Their MAR payment would be 10 months pay: 33,330. If they chose to take the MAR scheme at the age of 58 their payment would be actuarially reduced (due to early retirement) by 11%. Their pension would therefore be reduced to 8,900. If the employee requested that their employer buy them AP of 1,500, this AP would also be subject to the actuarial reduction for early retirement of 11% and would therefore be reduced to 1,335. However, when added to their total pension of 8,900 this would offset the actuarial reduction and provide a total pension of 10,235. It would therefore give them a greater pension amount than the 10,000 they would receive if they did not take early retirement. The cost of buying 1500 of additional pension is 28,980 for a 58

18 year old. Their employer could buy 1,500 additional pension for the employee and pay a net MAR payment of 3,350. The NHS Pensions Scheme Guide should allow employees to calculate the impact of the actuarial reduction for early retirement on their pension amount. The NHS Pensions website has a section on buying additional pension which will be useful for employees to reference - it includes an additional pension calculator. In light of complexity around using MAR to offset the loss of benefits due to Early Retirement, anyone considering this option may want to take independent financial advice before proceeding. 29. If I leave under MARS and then return to pensionable employment, can I retain access to special class status? Yes, providing you return to pensionable employment within 5 years of leaving and to a post that qualifies for special class status (i.e. Nursing, Physiotherapist and Health Visitor grades). If your return to NHS work is after 5 years, you may be eligible to join the 2008 Section of the pension scheme. Further information on scheme eligibility can be found on the NHS Pensions website Special class members may retire from age 55 provided the whole of the last 5 years of pensionable employment is spent in a 'qualifying' post. This could include pensionable employment in your previous role. 30. I am 53 and have special class status. If I leave under MARS will I be able to take my pension unreduced at 55? Only if you return to pensionable employment that qualifies for special class status before you are 55; this will be within 5 years of leaving. Otherwise you will have to wait until you are 60 to take your pension without a reduction. ANNUAL LEAVE 31. Employees may have leave outstanding, what happens to their leave if they are successful? Employees should be asked to use any outstanding leave during their notice period. If this is not possible due to operational requirements they should be paid in lieu for any outstanding annual leave due at the last day of service, provided this has been agreed with their line manager prior to their resignation date being finalised. RE-EMPLOYMENT 32. Can employees return to work for the same organisation/nhs if they leave under MARs? The purpose of the MARS payment is to compensate employees for loss of employment. Employees who leave the NHS under MARS would not be reemployed under normal circumstances by the NHS in England, in the same or a different post, before a period of 1 month has elapsed. If an individual does return to the NHS within a month they would be required to repay any MARS payment in full. Where an employee returns to work for the NHS in England within 6 months and before the expiry date of the period for which they have been compensated (as

19 measured in equivalent months/part-months salary), then an employee would be required to repay any un-expired element of their compensation. This would be reduced to take account of any appointment to a lower grade and reflect net salary. The compromise agreement should specify the requirement to repay monies in such circumstances and may provide for a period of repayment.

20 APPENDIX C Mutually Agreed Resignation Scheme Application Form PART A: For completion by the employee. Division: Ward/Department: Full Name: Job Title: Band/Grade: Date of Birth: Assignment Number/Payroll Number: National Insurance Number: Gross Annual Salary: Contracted Hours: NHS Start Date: Whole Time Equivalent: Organisation Start Date: Preferred Details: Contact Phone: Address: I wish to apply for the Mutually Agreed Resignation Scheme. I understand that the information above will be validated and, if forwarded to the MARS Panel for consideration, the outcome of my application will be communicated to me in writing. Date: Signed:

21 PART B: For completion by the line manager Details required of how recurrent cost savings can be made through skill mix/redeployment: 1. How will the duties of the role be covered? Eg reallocation of existing resources, service/process redesign. 2. a) Will the redesign allow for the whole post and funding to be removed? If Yes go to Question 3 b) If No, will a replacement post be required at a lower band? If No go to Question 3 c) If Yes, please provide details of the replacement post. Yes Yes No No Band: WTE:

22 PART B (continued): For completion by the line manager 3. Estimated net savings to be delivered as a result of releasing post funding and agreeing a MARS payment? Recurrent: Non-Recurrent: 4. Estimated voluntary severance costs? 5. Are there any other employee costs which need to be taken into account? Eg removal expenses, lease car 6. Does this application create an opportunity for a displaced member of staff? Eg Redeployment Register, People on the Move (Please discuss with Human Resources Representative) Yes No 7. Outstanding annual leave as at 30 th April 2011 I do/do* not support this application (*Delete as appropriate) Reason if not supported: Line Manager Signature: Date: Contact Details: Tel: I confirm that this application will not have an adverse affect on financial targets or service delivery. Director/DGM* Signature: Date: Contact Details: Tel: *If approved, please forward completed forms to the Director Of Personnel and Development HR Department, Trinity Suite - Level 5, NDDH

23 PART C: For completion by Payroll Team Basic Annual Salary: Organisation Start Date: Completed Years: MARS Payment Calculation: Outstanding Annual Leave: Annual Leave Payment: Completed By: Date: PART D: For completion by Management Accounts Basic Annual Salary: Cost of MARS Payment: Yr1: Sev Cost Yr1: Budget Yr1: Net Recurrent Savings identified (Excluding Costs): Certified By: Date: PART E: For completion by the MARS Panel Tick as appropriate This application has been approved This application has NOT been approved Signed: On behalf of MARS Panel Date:

24 Appendix E - Equality Impact Assessment Screening Form Equality Impact Assessment Screening Form Title Author Directorate Team/ Dept. Mutally Agreed Resignation Scheme (MAR s) Jo Holmes, Lead HRBP Acute Human Resources Human Resources Document Class Document Status Issue Date Review Date Policy New April 2012 April What are the aims of the document? The aim of this policy is to help the organisation meet the financial challenges including management costs and workforce reductions, service redesign and other efficiency needs. 2 What are the objectives of the document? Mutually Agreed Resignation Scheme (MARS) is a scheme which has been developed to help the organisation meet the financial challenges including management costs and workforce reductions, service redesign and other efficiency needs. The purpose of the MARS is to create job vacancies which can be filled by redeployment of staff from other jobs, including staff at risk of redundancy. 3 How will the document be implemented? Implementation of this document will ensure that the Trust provides a uniform and equitable approach for the application for, and approval of, Mutually Agreed Resignations. Managers will ensure that employees are made aware of the MARS policy and their responsibly to comply with the relevant request timescales The HR Department is responsible for the provision of specialist advice on the interpretation and application of the policy 4 How will the effectiveness of the document be monitored? Monitoring compliance with this policy will be the responsibility of the Human Resources Team. 5 Who is the target audience of the document? The Policy applies to staff employed on Agenda for Change terms and conditions of service with the exception of registered nurses This policy is not applicable to Temporary Workers, staff not on Agenda for Change

25 Terms and Conditions and staff covered by Medical & Dental Whitley Council conditions of service. 6 Is consultation required with stakeholders, e.g. Trust committees and equality groups? Yes 7 Which stakeholders have been consulted with? Remuneration Committee SHA 8 Equality Impact Assessment Please complete the following table using a cross, i.e. X. Please refer to the document A Practical Guide to Equality Impact Assessment, Appendix 3, on the Trust s Intranet site (Bob) for areas of possible impact. Where you think that the policy could have a positive impact on any of the equality group(s) like promoting equality and equal opportunities or improving relations within equality groups, cross the Positive impact box. Where you think that the policy could have a negative impact on any of the equality group(s) i.e. it could disadvantage them, cross the Negative impact box. Where you think that the policy has no impact on any of the equality group(s) listed below i.e. it has no effect currently on equality groups, cross the No impact box. Equality Group Positive Impact Negative Impact No Impact Comments Age X Staff with more NHS service receive a higher MAR s payment as calculation is based on ½ months basic pay multiplied by length of service up to 24 years. Disability Gender Gender reassignment Human Rights (rights to privacy, dignity, liberty and non degrading treatment) Marriage and civil partnership Pregnancy, maternity and breastfeeding Race / Ethnic Origins Religion X X X X X X X X

26 or Belief Sexual Orientation X If you have identified a negative discriminatory impact of this procedural document, ensure you detail the action taken to avoid/reduce this impact in the Comments column. If you have identified a high negative impact, you will need to do a Full Equality Impact Assessment, please refer to the document A Practical Guide to Equality Impact Assessments, Appendix 3, on the Trust s Intranet site (Bob). For advice in respect of answering the above questions, please contact the Equality and Diversity Lead. 9 If there is no evidence that the document promotes equality, equal opportunities or improved relations, could it be adapted so that it does? If so, how? Completed by: Name Jo Holmes Designation Lead HRBP - Acute Trust Northern Devon Healthcare NHS Trust Date 25/09/12

27 APPENDIX D MARS APPLICATION PROCESS Employee Completes Application Form Employee sends Application Form to Line Manager for consideration Line Manager to consider if duties can be covered by reallocation of existing resources? Application approved by Line Manager Line Manager forward Form and Prioritisation and Quality Assessment Tool to Director/DGM for authorisation Form authorised by Director/DGM and forwarded to Director of Personnel and Development Application submitted to MARS Panel YES YES YES YES N O Line Manager to consider if the duties can be covered by service/ process redesign? N O Line Manager to contact HR to check whether the duties be covered by a displaced member of staff? N O Line Manager to discuss with Director/DGM any options to cover the post from within the Directorate/Division N O Line Manager to advise Employee Application unsuccessful