LGPS ill health retirement advice - less than 2 years service

bringingit

Hi

Im trying to find the best sources of advice on LGPS ill health retirement.

Someone I’m supporting has had a heart attack and just been diagnosed with heart failure. More tests needed to get a clear prognosis, they are currently ok but not able to work at the moment. They are in their mid 40s.

The first issue is that they’ve only been in the post just over a year. I THINK they need to be in post 2 years to be eligible for any ill health retirement? Would that include periods on sick including on nil pay until they reach the 2 years service?

I appreciate this is a long road, I’m just trying to gather information and be supportive at the moment. 

Silvertabby

The 2 year vesting period for LGPS benefits does also apply to ill health retirement, I'm afraid.  

The way ahead will be largely determined by your friend's employer, but it is unlikely that they will stretch out their sick leave/service any longer than they have to, in order to qualify for (eye wateringly expensive) ill health pension benefits.  

Lemon_dr1zzle

Have they been in less than 12 months and have any other pensions elsewhere, even if it’s a tiny pot somewhere else? If so they can transfer in and this would immediately vest their benefits. 

bringingit

Hi, they’ve been there 14 months (went on sick just before 1 year). Yes they have a separate DC pension pot from a previous employer but I think as it’s been more than 12 months they can’t transfer in? 

Silvertabby

Yes, there's a 12 month limit on transfers in of DC pensions.  And, even then, only if the employer allows it.  Not all do.

bringingit

I guess the question is if they can squeeze their serve up to 2 years, will they be able to think about applying for ill health retirement, or will periods of only receiving SSP or actual nil pay still be an issue? 

Silvertabby

Unpaid sick leave is pensionable, as employer contributions continue.  But when is the unpaid sick leave due to end?  Before or after the 2 year point?  

bringingit

Mmm I don’t know….I didn’t realise unpaid sick leave had an end date. They have said they are on nil pay already and SSP ends around September/October this year, so well before the 2 year mark. 

Silvertabby

I obviously can't speak for your friend's employer, but extending sick leave just to qualify for ill health benefits would be extraordinarily generous.  Based on your friend's age, and assuming average salary of £25K, the scheme costs for Tier 1 ill health could be as much as half a million pounds.

I hate to say this but, from experience, the option of ill health dismissal (with no access to pension) at the end of the period of unpaid sick leave is more likely.

Lemon_dr1zzle

Any other LGPS service elsewhere which could be aggregated? 

bringingit

No other LGPS service.

I’ll try to find out about the period of unpaid sick leave. Apologies, it’s not a term I’ve heard before I didn’t realise that was a thing! 

Also just to say appreciate all the responses.