Working after retirement

This page is intended to answer common questions regarding the implications of working after retirement for members of OSPS, USS and NHSPS. If you have a specific query please contact the Pensions Office.

Can I work for the same employer after retirement?

You should ask your employer about their policy regarding re-employment of employees who have retired and claimed pension benefits. For example, the University imposes conditions upon members who retire under severance schemes such as OMIS. You also need to be aware that pension scheme rules may determine whether or not you can be re-employed and how much you can earn in retirement.

There are also rules imposed by HM Revenue and Customs (HMRC) on members who retire on age grounds between age 50 and 55 after 5 April 2010.

What if I retire on age grounds between age 50 and 55 after 5 April 2010?

HMRC raised the minimum age for retirement to 55 for members retiring after 5 April 2010, but members who have service in OSPS or USS before 6 April 2006 can claim their benefits between age 50 and 55 under ‘protected pension age’ regulations. However, HMRC has imposed re-employment conditions on people who retire using their entitlement to a protected pension age. Such members cannot generally be re-employed by the same employer, or a related employer, for six months following retirement (or one month in a materially different role). See HMRC website for more details.

Will my tax-free lump sum be taxed if I am re-employed?

No, HMRC is no longer concerned about this issue.

What is the minimum break I have to take before being re-employed?

Generally, the University requires that you must not be re-employed within one month of retiring. In other words, you must have a minimum break of at least one calendar month. Please contact Personnel Services for more information.

USS and OSPS now offers a flexible retirement option in which you can retire from part of your post. Please contact the Pension Office.

If you are an NHSPS member and are being re-employed by the University then there are no restrictions. If you are employed in the NHS itself after retirement there are conditions. These are summarised in the Retirement Booklet available on the NHSPS website.

Can I claim my pension benefits without taking a break from employment?

Although HMRC now allow this, the rules of the schemes offered by the University do not allow this unless taking flexible retirement in OSPS or USS. You have to leave your current employment to claim your pension benefits. If you are re-employed by the same employer it must be under a new contract.

What if I hold a joint appointment with a college?

You may retire from all your joint appointments simultaneously and draw your benefits.

If you are a USS member you may take part of your USS pension under the flexible retirement rules.  These rules require that remain employed by at least one employer, and that you give up at least 20% your original overall working commitment and reduce your aggregate salary by a minimum of 20%.  You may draw between 20% and 80% of your total pension and lump.

Can I join or rejoin the pension scheme?

If you are in receipt of an OSPS, USS or NHS pension you can join or rejoin USS or OSPS provided you meet the eligibility criteria.

Will my pension be affected by my new earnings?

You should tell your new employer that you are in receipt of a pension as both your pension and your new earnings are taxable income. This should ensure that you pay income tax at the correct level on your pension and your new earnings. Your gross pension will not be adjusted because of your earnings unless you retired on the grounds of ill health (see below).

What if I retired on the grounds of ill health?

If you have retired on the grounds of ill health and subsequently your health improves so you are able to take up paid employment or self-employment before your normal retirement date, you must write immediately to the Pensions Office (for OSPS) or USS giving full details of your new earnings. Your pension may be reduced or suspended, depending on the level of your earnings. Failure to notify could lead to forfeiture of the pension.

Both OSPS and USS look closely at cases in which a member who has retired on the grounds of ill health and is re-employed by their old employer or a new employer in a very similar role. If the pension scheme thinks that you have recovered from your illness to the extent that you no longer qualify for ill health retirement under the rules your pension could be cancelled.

Can I put my tax-free lump sum into a pension scheme after retirement?

Yes, but this is called pension recycling and gives rise to tax penalties. Please read the pages on the HMRC website for further details. You should take independent financial advice if you are considering doing this.