Ill-health retirement

What is the ill-health retirement process?

If a member has to leave work due to illness then they may be able to receive immediate payment of their benefits.

To qualify for ill-health benefits the member must firstly have met the 2 years vesting period in the Scheme. As the employer, based on an opinion from an Independent Registered Medical Practitioner (IRMP), approved by ERPF and appointed by you (the employer), you must then be satisfied that the Scheme member will be permanently unable to do their job until Normal Pension Age (NPA), and that they are not immediately capable of undertaking any gainful employment.

Ill-health benefits can be paid at any age and are not reduced on account of early payment, in fact, the members benefits could be increased to make up for their early retirement. It has graded levels of benefit based on how likely the member is to be capable of gainful employment after they leave.

The three tiers for ill-health are detailed below:

• Tier 1 - If the member is unlikely to be capable of gainful employment before their Normal Pension Age, ill-health benefits are based on the pension a members has already built up in their pension account at their date of leaving the scheme plus the pension they would have built up, calculated on assumed pensionable pay, if they had been in the main section of the scheme until they reached your Normal Pension Age.
• Tier 2 - If the member is unlikely to be capable of gainful employment within 3 years of leaving, but are likely to be capable of undertaking such employment before their Normal Pension Age, ill health benefits are based on the pension they have already built up in their pension account at their date of leaving the scheme plus 25% of the pension they would have built up calculated on assumed pensionable pay, had they been in the main section of the scheme until they reached their Normal Pension Age.
• Tier 3 - If the member is likely to be capable of gainful employment within 3 years of leaving, or before their Normal Pension Age if earlier, ill-health benefits are based on the pension they have already built up in your pension account at leaving. Payment of these benefits will be stopped after 3 years, or earlier if the member is in gainful employment or become capable of such employment, provided they have not reached their Normal Pension Age by then. If the payment is stopped it will normally become payable again from their Normal Pension Age but there are provisions to allow it to be paid earlier.

If you require any further information on this process, then please call the retirements team on (01482) 394113.