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ILL HEALTH RETIREMENT

If you have to leave employment for health reasons you need to contact your employer as you may be entitled to the immediate payment of your scheme benefits on grounds of ill health. These benefits could be subject to significant enhancement.
 
If you have at least three months total membership or have brought a transfer value into the LGPS and an approved and independent registered medical practitioner certifies that:
  • you are permanently incapable of carrying out your former job AND
  • there is a reduced likelihood of undertaking a job elsewhere
you are entitled to immediate ill health benefits.
 
 
Tier 1 Ill Health Retirement
 
If you are assessed as having no reasonable prospect of undertaking gainful employment* before age 65 then a pension is based on:
  • accrued membership plus 100% of prospective membership between leaving and age 65
  • for part-timers, this period of extra membership is scaled down in proportion to part time hours worked at date of leaving against full time equivalent hours at that date
*gainful employment is defined as 'paid employment for not less than 30 hours per week for a period of not less than 12 months.'
 
Tier 1
 
 
Example: Mary
 
 
 Mary retires on ill health on her 49th birthday having 5 years of whole-time membership.
 Her final pay is £16,000
 
 Accrued Membership = 5 Years
 Prospective Membership between leaving and age 65 = 16 Years
 Enhancement = 16 Years
 Total Membership = 21 Years
 
 ANNUAL PENSION: 21/60 x £16,000 = £5,600
 
 
 
Tier 2 Ill Health Retirement
 
If you are assessed as unlikely to undertake gainful employment* within 3 years but likely to obtain gainful employment* before age 65 then a pension is based on:
  • accrued membership plus 25% of prospective membership between leaving and age 65
  • for part-timers, this period of extra membership is scaled down in proportion to part time hours worked at date of leaving against full time equivalent hours at that date.
*gainful employment is defined as 'paid employment for not less than 30 hours per week for a period of not less than 12 months.'
 
Tier 2
 
 
Example: Peter
 
 
 Peter retires on ill health on his 53rd birthday having 20 years of whole-time membership.
 His final pay is £24,000
 
 Accrued Membership = 20 Years
 Prospective Membership between leaving and age 65 = 12 Years
 Enhancement = 3 Years
 Total Membership = 23 Years
 
 ANNUAL PENSION: 23/60 x £24,000 = £9,120
 
 
Please Note:                                                                    
Protection is given for those aged 45 before 1 April 2008 where there is entitlement to an enhancement of membership. This provides that the member should be in no worse a position than they would have been, had Regulation 28 of the 1997 Regulations applied.

 
 
Tier 3 Ill Health Retirement
 
If you are assessed as likely to undertake gainful employment* within 3 years then a pension is based on:
  • accrued membership only
  • the Third Tier member is required to notify the previous employer when employment is found - providing details, including the pay and working hours of that employment.
  • the employer considers the details regarding employment and, if they decide this is gainful employment according to the regulations, payments are stopped.
  • the previous employer needs to undertake a review when Third Tier payments have been made for 18 months.
*gainful employment is defined as 'paid employment for not less than 30 hours per week for a period of not less than 12 months.'