ill health retirement

muswellblue

Hi, 
I may have to retire through ill health. I have a final salary pension that I stopped paying into in 2015. I have been reading that most people that take ill health retirement with final salary pensions can receive their pensions with no reduction for taking it early. My pension provider says if I’m eligible a reduction would be applied. I’m wondering if anybody else had gone through this, and how much reduction would be applied? I understand all schemes are different and have different rules. I’m now 51. The scheme retirement age is 65. 

Dazed_and_C0nfused

Is this a deferred pension from an employer you no longer work for?

Ayr_Rage

Is the pension you stopped paying into the scheme of your current employer?

If not, you may not be able to access it until you are 55 or even 57 and then with a reduction for early payment.

muswellblue

It’s a bit confusing. I still have the same job as in 2015, but the company merged with others to become a new company and I now pay into a new pension scheme. 

The pension provider for the scheme that closed in 2015 said I’m still an “employed deferred member”. They said I’m eligible to apply for ill health retirement. 

Marcon

muswellblue said:

It’s a bit confusing. I still have the same job as in 2015, but the company merged with others to become a new company and I now pay into a new pension scheme. 

The pension provider for the scheme that closed in 2015 said I’m still an “employed deferred member”. They said I’m eligible to apply for ill health retirement. 

Active members of DB schemes (those who are still contributing and building up benefits in the scheme) often get 'better' terms for ill health early retirement than for early retirement in normal health.

As you are a deferred member of the DB scheme (which is what you are, regardless of whether or not you work for the same employer) you may only be offered the same terms as anyone else applying for early retirement - ie the pension will be reduced to reflect the fact it is being paid sooner and for longer.

However, the ill health distinction is going to be vital as you are under 55 (currently the minimum age for accessing a pension in 'normal' health) if you want to access your DB pension now. The rules of your scheme will set out the criteria you have to meet to qualify for ill health retirement, and the trustees MUST have written evidence from a medical practitioner to support your application. 

xylophone

Is the pension you stopped paying into the scheme of your current employer?

If not, you may not be able to access it until you are 55 and then with a reduction for early payment.



https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/early-retirement-because-of-illness-sickness-or-disability

Ill-health retirement is when you can access your pension early because of poor health. You’ll sometimes see this referred to as medical retirement or retirement on medical grounds.

If you have a private or workplace pension, you might be able to begin taking an income and/or lump sums from your pension at any age due to ill health. The normal minimum retirement age of 55 (57 from 2028) doesn’t apply.

The OP should consult his scheme guide (s) for information on how to start the process.

muswellblue

thanks for all your comments. The pension provider sent me a letter I have to sign and send back with medical evidence. It then goes to the trustees to decide. I have messaged them back for more info on what I may receive or how much reduction could be applied. 

Auti

My ill health retirement - when I applied for ill health retirement I had to have HR meetings and medical organised by HR as well as Dr reports. The pension amounts were decided on tiers 1,2, 3 depending on what they thought about how likely you were ever to work again. I will never work again so I got the pension 100% (as I would have got if I retired at my retirement age). The other levels were along the lines of could do some work in x amount of years, could do limited hours work in the future. 

You need to read all the schemes information about how they assess ill health retirement - you should be involved with HR and they should supply you with your pension documents - googling your pension provider can also give some information. You need to know what and how they arrive at their decision.

Marcon

muswellblue said:

thanks for all your comments. The pension provider sent me a letter I have to sign and send back with medical evidence. It then goes to the trustees to decide. I have messaged them back for more info on what I may receive or how much reduction could be applied. 

Remember that you need to specifically ask your doctor/consultant to respond on the basis of the rules of scheme and how they define 'ill health' in respect of ill health early retirement. That definition is key and the doctor needs to see it. Simply getting a GP or consultant to say you've got xyz illness and they recommend you stop working isn't likely to be adequate.

muswellblue

I just have a general question on ill health retirement. I struggle both at work/working at home due to ill health, when i go into work I have a 5 hour round trip which obviously doesn’t help matters. When I speak to the occupational health physician, should I mention the commute as a factor in my poor health? I’m just wandering if that will help or hinder my application. They may say I’m fit to do my job if I didn’t have the commute, and say I could do my job if it was nearer home, and not approve ill health retirement. Or they may just focus on the fact I’m not fit to do my job regardless of my commute. Maybe I’m over thinking this. 

Auti

You say you struggle working at home due to ill health so commuting does not come in that. I would leave out commuting as it makes no difference as you struggle at home. You need to work out exactly why your health makes it impossible for you to work (in any form and in any job) and why it cannot be improved so you can work with reasonable adjustments meaning you have to have ill health retirement.