Local Government Pension Scheme (LGPS) Medical Retirement

Pete268

Hi,

I am trying to help a friend of mine who is in a muddle over the Local Government Pension Scheme (LGPS) and info seems very hard to find due to the changes to the LGPS in April 2008.

Basically my pal has worked for his employer and been a member of the LGPS for just over 14 years now. (I work for the same employer). He is disabled (receives a War Disablement Pension and DLA High Mobility and Middle \Care). His disability, a severe spinal injury picked up whilst in the Army, has deteriorated over the last few years and he has been off sick for well over a year now and he now gets Incapacity Benefit. He is aged 46years old and his former full salary was circa £24,000 per year.

He has been seen by the employer's Occupational Health Doctor who agrees he should be medically retired and he has been referred to a Independent Medical Practitioner for a decision on whether or not he is to be retired. He is awaiting the appointment.

The problem being is what would his entitlement be should he be medically retitred. It is a final salary scheme based on his final years earnings - but as he has been off sick for over a year he spent 6 months on full salary and six months on half salary before 3 months ago dropping onto zero salary. Would they 'back track' to his final years full earnings in working it out?.

Will his pension be increased to 'x' years service if he is medically retired?

If he is retired on medical grounds, will he receive a lump sum at the start or does he have to wait until normal retirment age for the lump sum?.

Will early medical retirment cost his employers anything (the council are very 'tight') and he thinks they might not want to retire him, leaving him with nothing but a deferred pension when he is 65?.

Are there differing classes of medical retirement under the new scheme?. I have heard differing stories about this?

I know there have been changes to the pension scheme earlier this year but no one seems to know how they affect medical retirement. His union are no help as they apparantly do not know abouyt how the scheme changes will affect him either.

Sorry if this is longwinded but have we any LGPS experts here?

Many thanks

Peter

Ian_W

THIS PAGE and the site generally should help. There are various levels of benefit depending on an assessment of the degree of disability.

EDIT to add:
Sorry the first post was a bit rushed. I'm certainly no expert on the LGPS but do know the workings of some other public sector schemes which are broadly similar.
The employers usually don't have a lot of choice if the independent assessor says he's not fit to work, particularly as as the council's occ health doc agrees. Pay for pension isn't usually adversely affected by zero pay situations, usually the pension is based on what would have been earned or a previous year before reduced or zero pay.
If the Union locally aren't helpful, get him to contact the regional or national office. He's paying his subs and it's very much in their remit to help and guide him through this difficult time. Get him to make a fuss!!

Pete268

Hi Ian,

Thanks for that. To be honest his Unison branch seem as much in the dark as him and they are waiting answers on his behalf but time is dragging. The link you gave is helpful but has opened up further a further query as he will come under the 'protected' status as follows:

''If your employer decides before 1 October 2008 to retire you due to permanent ill-health, or you were in the LGPS on 31 March 2008 and were aged 45 or over on that date, there are protections to ensure your ill health retirement benefits are no less than they would have been under the Scheme as it applied before 1 April 2008.
For more information on ill-health retirement, contact your employer.''

The thing is,as well as the queries I posted above, no one seems to know what the 'protections' are or how they work in practice within the revised scheme The employers certainly haven't a clue and are also awaiting a response as to what the protections are.

Poor chap just wants things sorted and it seems a minefield at the moment.
Thanks
Pete

CAE

The decision for ill health retirement is not down to the employer, but is a medical decision certified by by an Independent specially qualified doctor.

If granted ill health retirement the pension benefits are calculated using the full time equivalent salary that he would have received had he not been off sick. The fact that he is on 'NoPay' doesn't matter.

There are 3 tiers of Ill health retirement under the new scheme, and the tier is decided by the medical people. The protection means that the ill health enhancement (for tiers 1 and 2) is calculated under both the old scheme and new scheme regulations, and the member gets the best deal. There is no enhancement for tier 3, and the benefits last for a maximum of 3 years. (with a review at 18 months for tier 3 only)

A lengthy document detailing FAQS concerning the new ill health arrangements has been issued within the last couple of days. Unfortunately all of these new regulation changes and protections are extremely complicated.

The lump sum (retirement grant) would be payable at the same time any ill heath pension commences, based on membership to 31st March 2008.

There is a cost to the employer for someone retiring early, even on ill health grounds, but as said earlier, the decision is purely a medical one.

Your friends employer should be able to obtain an estimate of ill health benefits from the administering authority, although they will need to know which tier will apply, which can only come from the doctor.

Hope this helps

Pete268

Many thanks CAE for your very comprehensive reply. That certainly has helped clear a few thing up.

Re the document issued in the last few days, do you know if that is available online yet?. It seems strange the new scheme started in April and they are only now issuing this new information. I think this has been the cause of the lack of information available to him.

Very many thanks anyway.

Peter.

CAE

It's been the cause of lack of information to pensions administrators as well!!

I doubt if the FAQs are online, as it is basically a working document for administrators, and even then there are answers still to come. We know what the questions are, but not the answers!!

Not4coping

CAE wrote:

The decision for ill health retirement is not down to the employer, but is a medical decision certified by by an Independent specially qualified doctor.

This is incorrect! It is the Scheme employer's decision.

The Regulations require that, before making that decision, the employer must obtain a Certificate of Permanant Incapacity from a suitably qualified, independent occupational health practitioner.

The doctor merely provides a medical opinion. It is for the employer to then decide taking into account all the evidence including other medical opinion and non-medical matters (eg occupational factors) whether or not the scheme member is eligible.

There are several Determinations on the website of the Pensions Ombudsman that makes this quite clear. Many, many employers have been unfairly and illegally hiding behind a doctors opinion for many many years.

I believe the unions are (finally) getting to grips with this scandal. But much too late for many employees.

Oblivion

Not4coping wrote: »

The doctor merely provides a medical opinion. It is for the employer to then decide taking into account all the evidence including other medical opinion and non-medical matters (eg occupational factors) whether or not the scheme member is eligible.

There are several Determinations on the website of the Pensions Ombudsman that makes this quite clear. Many, many employers have been unfairly and illegally hiding behind a doctors opinion for many many years.

I believe the unions are (finally) getting to grips with this scandal. But much too late for many employees.

I fully agree, having been a victim of this myself. Genuinely sick people, incapable of work, are being robbed of their right to a dignified retirement by unscrupulous employers.

Playing Devil's Advocate, we did go through a period when the gates were left wide open and malingerers were taking advantage of the ill health retirement system ... heaven knows I witnessed a few in my time as a public service manager. But that does not excuse the backlash which then occurred from the government's proclaimed clampdown, because it has gone way too far in the wrong direction, and is now penalising genuine sufferers who deserve a dignified exit from work.


Dave.