Can Employer ignore Doctor’s recommendation for ill health retirement?

frontdoor75

A relative (age 61) diagnosed with a serious heart problem (like footballer Fabrice Muamba) and off work for 11 months and currently on half-pay, applied for ill health retirement 11 months ago.

Employer’s doctor’s 1st verdict: not able to do current ‘physical’ job but able to do alternative ‘office’ job.

Employer asked for 2nd more ‘definite’ opinion by Employer’s Doctor.

Examined by SAME (Employer’s) doctor as before – Verdict: recommended ill health retirement

Employer, however, refusing to give ill-health retirement and offering an ‘office’ job on lower pay (currently on final salary with 38 years service as an electrician – most of 38 years service with NHS before being contracted out to private company).

Having disagreed with Company’s recommendation, Company have asked him to get another medical opinion from Company’s Pension Doctor.

(NHS Heart Consultant has also offered to write a letter recommending ill health retirement)

In 4 weeks, half-pay will end and he will be on ‘no pay’.

1) Can the employer ignore the Doctor’s recommendation?

2) Is it better to early retire now on final salary? (Most probably lower paid office job will not be final salary pension).

3) Will Employer’s insurance cover his ‘new’ employement on NHS hospital premises even after their own Doctor’s recommended ill health retirement?

4) What are his options? (non- Union member)

Thanks in anticipation

Bigmoney2

frontdoor75 wrote: »

A relative (age 61) diagnosed with a serious heart problem (like footballer Fabrice Muamba) and off work for 11 months and currently on half-pay, applied for ill health retirement 11 months ago.

Employer’s doctor’s 1st verdict: not able to do current ‘physical’ job but able to do alternative ‘office’ job.

Employer asked for 2nd more ‘definite’ opinion by Employer’s Doctor.

Examined by SAME (Employer’s) doctor as before – Verdict: recommended ill health retirement

Employer, however, refusing to give ill-health retirement and offering an ‘office’ job on lower pay (currently on final salary with 38 years service as an electrician – most of 38 years service with NHS before being contracted out to private company). How much pensionable service does he have?

Having disagreed with Company’s recommendation, Company have asked him to get another medical opinion from Company’s Pension Doctor.

(NHS Heart Consultant has also offered to write a letter recommending ill health retirement)

In 4 weeks, half-pay will end and he will be on ‘no pay’.

1) Can the employer ignore the Doctor’s recommendation?Yes.
Also it is upto the pension scheme trustees to agree ill health retirements.

2) Is it better to early retire now on final salary? (Most probably lower paid office job will not be final salary pension).
Depends on the schemes definition of FinalPensionable salary.
It isn't usually the salary when you finish, more likely an average of the last 12months, 2 yrs, 3yrs etc, could be almost anything e.g the best year from the last 5yrs, need to check scheme rules.

3) Will Employer’s insurance cover his ‘new’ employement on NHS hospital premises even after their own Doctor’s recommended ill health retirement? If a fit note says he is fit to do this other job, yes

4) What are his options? (non- Union member)
He could ask to retire early at his own request (not ill health) and take the actuarial reduction for doing so.
Once his half salary and SSP have finished and claim ESA.
Thanks in anticipation

A pity he isn't a union member they can often offer good advise in these situations and usually know the employer and pension rules better than most.

redbuzzard

Good answers above.

What is the scheme retirement age, 65? If it's only the actuarial reduction that is the difference between early retirement and ill health retirement, that could still be 20%-25% of the commencement value so I'd be aiming to avoid that if possible too.

Big Tee is right - the normal way is to apply to the pension trustee for an ill health pension, not the company, and it is the pension scheme's occupational health consultant's opinion, and the supporting medical evidence of the member's own doctors, that counts.

Bigmoney2

redbuzzard wrote: »

Good answers above.

What is the scheme retirement age, 65? If it's only the actuarial reduction that is the difference between early retirement and ill health retirement, that could still be 20%-25% of the commencement value so I'd be aiming to avoid that if possible too.

Big Tee is right - the normal way is to apply to the pension trustee for an ill health pension, not the company, and it is the pension scheme's occupational health consultant's opinion, and the supporting medical evidence of the member's own doctors, that counts.

One thing to remember is that while income tax is payable on pensions (above the personal allowance) there is no NI to pay and there will be no pension contributions coming out either.

So while the gross pension amount may be much less than salary, the difference in the net amount (take home pay) will not be as great.

quotememiserable

I'm a trustee and have dealt with many of these cases. Trustees have discretion to decide and this is upheld by the law - although they must be reasonable and there's an ombudsman.
Most pension scheme ill health rules won't pay out if there's an alternative job that can be carried out, but normally there's a clause which says the alternative shouldn't be at 'substantially lower pay'. The definition of substantially is a matter of discretion, but we usually look at around 20%.
You should realise that trustee's have to be careful with these applications. Ill health retirements are expensive for the scheme and if too many go through the member contributions would have to be higher. We couldn't have a situation where everyone who appplies for ill health gets it - or who would be left working?

Debt_Free_Chick

It doesn't matter how many doctors recommend retirement, the key question is what are the criteria in the scheme rules that have to be met. In particular, what is the definition of incapacity?

redbuzzard

quotememiserable wrote: »

I'm a trustee and have dealt with many of these cases. Trustees have discretion to decide and this is upheld by the law - although they must be reasonable and there's an ombudsman.
Most pension scheme ill health rules won't pay out if there's an alternative job that can be carried out, but normally there's a clause which says the alternative shouldn't be at 'substantially lower pay'. The definition of substantially is a matter of discretion, but we usually look at around 20%.
You should realise that trustee's have to be careful with these applications. Ill health retirements are expensive for the scheme and if too many go through the member contributions would have to be higher. We couldn't have a situation where everyone who appplies for ill health gets it - or who would be left working?

I have seen a lot of these too, though I am no longer on a trustee board. It's common for the GP to effectively endorse ill health retirement, but generally they haven't even seen the scheme rules and that is not their function in this context.

Just to reassure the OP, the trustee should not make the decision based on the cost to the scheme (and I don't think that is what quotemiserable meant to say).

They will get their own medical opinion, which might be based on another examination, and/or an interview, and on reports they will ask for from the member's doctor(s). They will measure that against the scheme rules to ensure consistent decisions - i.e. they will act impartially, which is a serious legal obligation for them, so if the member thinks they are acting capriciously he should appeal - I can assure him that they will sit up and take notice.

Bigmoney2

Pension scheme trustees will also be company employees doing the role along side their normal job, and will only meet on a number of occasions each year, they don't generally sit in an office dealing with pension scheme issues every day, so the process can be a lengthy one.

redbuzzard

Bigmoney2 wrote: »

Pension scheme trustees will also be company employees doing the role along side their normal job, and will only meet on a number of occasions each year, they don't generally sit in an office dealing with pension scheme issues every day, so the process can be a lengthy one.

Possible. In my case I and another member were on the same site. Discretions would be passed for a decision by whichever of us was handiest at the time, then passed to the other for review and countersignature. We would always read and form our own view before turning the page to see what the other thought!

When we didn't agree we'd meet and discuss. Most were dealt with within days. On a couple of occasions we didn't really agree, so we set some more information gathering in train and took them to the next full board. Occasionally I would call the chairman, or one of two pension professionals on the board to run through my logic if it wasn't straightforward.

quotememiserable

redbuzzard wrote: »

Possible. In my case I and another member were on the same site. Discretions would be passed for a decision by whichever of us was handiest at the time, then passed to the other for review and countersignature. We would always read and form our own view before turning the page to see what the other thought!

When we didn't agree we'd meet and discuss. Most were dealt with within days. On a couple of occasions we didn't really agree, so we set some more information gathering in train and took them to the next full board. Occasionally I would call the chairman, or one of two pension professionals on the board to run through my logic if it wasn't straightforward.

I agree, that pretty much exactly matches my experience.

quotememiserable

redbuzzard wrote: »

Just to reassure the OP, the trustee should not make the decision based on the cost to the scheme (and I don't think that is what quotemiserable meant to say).

Quite right Mr Buzzard. My point is that the scheme has rules defining ill health which must be followed. Without rules and their correct application the scheme could not function.