Police Ill-health Retirement

NicG09

Hi,
I am currently being considered for Ill-health retirement. I have 9 years service in the police, and 5 years pension carried over from civil service. My health has deteriorated, my doctors advise retirement. I am only 34. Could someone help me with these questions:
- I joined under the 2006 scheme but was transferred to 2015 scheme. Obviously the 2006 terms are much better. Do they consider partial service under each scheme or everything under 2015 scheme?
- can I claim ESA or equivalent benefit once retired so that I am recognised for state pension?
- if I am unable to hold a full time job after retirement, do they give me enhance rate pension? What would I be looking at, I am thinking 14 years pensionable service plus the enhanced element could potentially be another 10 (half of years between current and 55)?

Any help would be gratefully received. Thank you in anticipation

hyubh

NicG09 wrote: »

I joined under the 2006 scheme but was transferred to 2015 scheme. Obviously the 2006 terms are much better.

They are...? 1987 vs. the other two is the big gap.

Do they consider partial service under each scheme or everything under 2015 scheme?

Will be under 2015 scheme terms (McCloud permitting).

if I am unable to hold a full time job after retirement, do they give me enhance rate pension?

For both the 2006 and 2015 schemes (the ill health rules for which are very similar), an assessment is made on whether you are permanently incapacitated, or merely incapable of performing a police role, on applying for an ill health retirement (the former being, in simple terms, the difference between getting an enhanced vs. a standard ill health pension).

NicG09

Thanks. Yes from what I have been told so far, the difference between being considered under 2006 scheme or 2015 scheme is about a £50,000 lump sum payment, which is obviously a huge difference for me.

jimi_man

Hi

I would strongly suggest you seek further advice on this as it’s a complex subject. Hyubh is partially correct. The ill health pension will be paid out of the 2015 scheme, however the 2006 portion of your pension will also be recognised and added to the amount as a separate calculation.

In your case it seems that you have 4 years 2006 service + the 5 from the CS = 9 years, then 5 years in the 2015 scheme. I don’t know what rank you are or which force, but to take a pretend example for an unenhanced pension and use a top rate non Met PC of £40K per year, 9 years gives you just over £5100 a year and a £20K lump sum. The 2015 part gives around £3700 a year, so £8800 and a £20K lump sum. There is no lump sum with the 2015 scheme (and at the commutation rate of 12:1 and at the age of 34, it’s a stunningly bad deal to even think about taking it!)

However if McCloud prevails and you are thrust back into the 2006 scheme, then 14 years would give you £8000 per year and £32K lump sum. As you can see, the difference is minimal and after around 15 years (aged 49) you’ll break even and after that, the 2015 one is worth more.

For an enhanced pension:
Combined schemes:
Lower tier pension – as above.
Upper Tier pension - £9400, so total is £18,200 (and the £20K lump sum)

Again, if McCloud prevails and you are thrust back into the 2006 scheme then you are enhanced by half the years between your age and 55 (21), so another 10.5 years, giving you 24.5 years’ service which is around £14K a year plus £56K lump sum.

So the difference is about £36K lump sum but you get just over £4000 a year less, which you’ll make up in about 9-10 years.

The purpose of these calculations is not to work out exactly what you’ll get, but that the difference is not as much as you think it is. Many people get blinded by the bigger lump sum in the 2006 scheme and can’t see the full picture. As I said, take advice, though it seems that you don’t actually have any say in it anyway. However if McCloud does prevail and you get moved back, you may have a choice in whether you want to and therefore it’s worth being armed with some figures beforehand.

Have a look at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/425363/2015_03_12_Administrators_Guidance.pdf page 9 onwards, as it explains it in more detail with some examples.

Trying_to_be_good

The Civil Service part of your pension may well not count as service for ill-health retirement, it will depend on the terms it was transferred (it may be considered a cash sum transferred, not time-based).

The ill-health retirement recommendation will be made by you scheme medical adviser, not your GP and there are a fair few hoops they need to go through.

If there's a decision that you're never likely to work again, your ill-health pension will be enhanced. Less so if you're unable to carry out your current role, but will be able to be 'economically active' in the future before your retirement age - highly likely at age 34.

McCloud/Sargeant should mean any benefits are on the 2006 terms, not the 2015 terms, if they're more beneficial. If pension contributions would have been higher staying on 2006 terms, you'll need to pay those (i.e. deducted from any pay out).

Your Federation will know a lot more about this - contact them for advice on your own situation. Good luck with your recovery, whatever shape that may take.

jimi_man

The above poster makes a good point about the transferred in pension. As it was another public sector pension I was reasonably sure that it counts, however it would be wise to check this.

Two further points. You say that you have been ‘told’… One thing that I remember is that in general, there was a huge lack of knowledge around pensions and this included the average Federation rep. Therefore I would take any information you’ve been given from colleagues (and Federation representatives to a certain extent) with a large pinch of salt. As I said previously, there is a heavy bias towards a lump sum, which tends to sway the maths for a lot of people.

The second point which has been briefly touched upon by the above poster, is that there is a reluctance to declare someone unfit for performing any form of employment in the future and thus awarding an enhanced pension. This is especially difficult when someone is (like you) on the younger side. Obviously I don’t know what the issue is and I wouldn’t expect you to tell me, far less post it on a public forum, but it’s something to be aware of before entering into the process and it would be wise not to bank on the enhanced pension.

Good luck.

rnj

In my experience, unless you are terminally ill or severely crippled you are unlikely to get the enhanced ill health pension.