LGPS Ill Health Retirement Tier Scheme

Gingernut29

Hello All, new member here, still finding my way around.

Can anyone enlighten me on this please? Re LGPS Ill Health Retirement Tier 3. This is a hypothetical question at the moment.

LGPS can be accessed at age 55 to give accrued benefits. IHR Tier 3 is meant to be a temporary pension for 3 years assuming you will be able to resume gainful employment again at some point in that time.So the pension would stop after 3 years (or earlier if you returned to gainful employment) and then resume at normal pension age.

If a person aged 59 was awarded Tier 3, would the pension still stop after 3 years even though at that age they would be entitled to access the pension anyway? It doesn't seem logically possible that this could be the case but having looked at the explanations of the tiers I can't find any reference to how a member aged 55 or over would be affected by a tier 3 award.

Many thanks for any enlightenments

Silvertabby

It wouldn't stop - but it would be re-calculated on the basis of early retirement rather than Tier 3, and so may well be a lesser amount.

Tier 3 ill health pensions don't have any enhancements, unlike Tiers 1 and 2, but nor are they reduced for early payment. If your Tier 3 ceases and you are offered access to your benefits on the grounds of early payment, then they will be actuarily reduced.

Gingernut29

Thanks Silvertabby, I understand that now.
Am I also right in thinking that the lump sum is not released with a tier 3 award?( Assuming at age 59)
Thanks again

Silvertabby

Good question. It's one of those things that can be subject to interpretation, so your LGPS provider may have their own spin in it. However, rule of thumb is that if you have an automatic lump sum (ie, from any pre 2008 service) you can take that at the start of your Tier 3 pension. The question of being able to further commute (at at rate of 1:12) is one for your own pension admin, I'm afraid.

If you've been told that the lump sum won't be released, then this may be their way of saying that you can't commute? (and that you don't have any pre 2008 service?)