💬 Early access to PSO pension credit due to ill-health – any experience?

greatkingrat

Pension schemes have to follow their own rules.They can't ignore them just because someone is in financial hardship. Unless you have evidence that the rules do allow them to pay the pension credit early, I'm afraid you will be wasting your time complaining.

Marcon

fluffy_sloth said:

Thanks so much to everyone who’s replied—really appreciate the input.

To clarify a little: the person I’m helping is already in receipt of a Civil Service ill-health pension, awarded several years ago. The PSO pension credit is from the same scheme, and they’re requesting early access to it on the same ill-health grounds—since the provider has already recognised that they are permanently unfit for work.

The ex-spouse has already retired and is drawing the pension, and the PSO was backdated to the date of divorce (May 2024). However, the person I’m helping is not receiving any pension payments, even though their share of the CETV has been calculated and they are officially a pension credit member. It was a clean break settlement, and no further financial support is due from the ex-spouse.

I can understand exactly why the person concerned is bemused, but I'm afraid all the above is completely irrelevant. As Silvertabby has already pointed out above, the rules of the scheme concerned do not allow this to happen. 

fluffy_sloth said:

They were financially dependent on their ex, are now 52 years old, and currently living off savings, with no capacity to return to work due to their medical condition. The concern is that the provider is refusing to even consider discretion or hardship, despite all this.

An IDR is now in progress, but if anyone has had experience with early access to a pension credit on ill-health or hardship grounds—even if rare—it would be really helpful to hear.

Thanks again.

There is no 'discretion' which would permit the scheme to deviate from their own rules and the IDRP will, I'm afraid, simply confirm that is the case. Continuing with the process is a waste of time, although I understand the temptation to do so 'just in case' - but it's already a lost cause, as would an approach to the Pensions Ombudsman would be. The first question asked will be 'do the rules permit....?' and the answer is clear: 'the rules do not permit, nor do they give any sort of discretion to do this'.

Any experiences other people may have with other schemes are quite simply not relevant - the rules of the scheme in question will prevail.

Marcon

fluffy_sloth said:

Thanks so much to everyone who’s replied—really appreciate the input.

To clarify a little: the person I’m helping is already in receipt of a Civil Service ill-health pension, awarded several years ago. The PSO pension credit is from the same scheme, and they’re requesting early access to it on the same ill-health grounds—since the provider has already recognised that they are permanently unfit for work.

The ex-spouse has already retired and is drawing the pension, and the PSO was backdated to the date of divorce (May 2024). However, the person I’m helping is not receiving any pension payments, even though their share of the CETV has been calculated and they are officially a pension credit member. It was a clean break settlement, and no further financial support is due from the ex-spouse.

I've been thinking on about this and wondering how best to help you get your head round what appears to be a truly contrary situation.

As you say, your friend is officially a pension credit member. I think the (wholly understandable) mistake you are making is to assume that a pension credit member is subject to exactly the same rules as someone with a pension from the same scheme in their own right. They aren't. As a 'regular' member, they are subject to the rules which relate to them in that capacity, but as a 'pension credit' member, they are subject to the rules which cover pension credit members - and those are different. 

One crucial difference is that 'ill health retirement' apparently isn't an option for pension credit members - the rules of this scheme quite simply don't allow it unless someone is terminally ill and has a life expectancy of no more than 12 months. The fact that they have been able to take ill health early retirement from their own period of membership is an entirely separate (and, albeit oddly, irrelevant) matter. 

I appreciate you are doing your very best to help, but I think the most useful help you can give is to explain the reality of the situation, assuming that the scheme has confirmed the rules do not allow them to grant ill health retirement to a pension credit member, and that there is no discretion which would allow them to do so.  

fluffy_sloth

Just a quick follow-up to clarify something, as I’ve seen a few posts suggesting pension credit members can't access benefits early.

The person I'm helping is already in receipt of a Civil Service ill-health pension, awarded in 2017. They're now a pension credit member as well, due to a Pension Sharing Order, and the concern is that the scheme is treating them only as a healthy, deferred member in this second case—even though they've already been medically retired from the same scheme.  They have discretionary powers to help people who are under financial hardship.

We're aware that pension credit members usually can't access funds before age 55, but this is a unique situation involving prior ill-health retirement and financial hardship. It’s now being formally reviewed under the IDR process, and if anyone’s seen similar cases where discretion was applied, I’d still really appreciate hearing from you.

Marcon

fluffy_sloth said:

Just a quick follow-up to clarify something, as I’ve seen a few posts suggesting pension credit members can't access benefits early.

No, you've seen posts pointing out that the scheme rules have to permit such a move.

fluffy_sloth said:

The person I'm helping is already in receipt of a Civil Service ill-health pension, awarded in 2017. They're now a pension credit member as well, due to a Pension Sharing Order, and the concern is that the scheme is treating them only as a healthy, deferred member in this second case—even though they've already been medically retired from the same scheme.  They have discretionary powers to help people who are under financial hardship.

We're aware that pension credit members usually can't access funds before age 55, but this is a unique situation involving prior ill-health retirement and financial hardship. It’s now being formally reviewed under the IDR process, and if anyone’s seen similar cases where discretion was applied, I’d still really appreciate hearing from you.

Just repeating the same facts won't alter the outcome.

By all means carry on the crusade, but you are consistently failing to register the point that a scheme has to follow its own rules. Even if the situation is unique - which seems unlikely - doesn't alter that.

You believe it is unique, so you are presumably hoping to hear from people who are members of other pension schemes - which is of no relevance whatsoever, because they will be subject to the rules of their particular scheme.

Does the Civil Service scheme to which your friend belongs have a regulation which allows a Pension Credit member to access an ill health early retirement pension before age 55, or is there a discretion which specifically allows this? 

Silvertabby

Copied from the Civil Service Pensions website

"What pension benefits you’ll get and when

Under a pension sharing order, the CETV of the member’s pension converts into a pension and, in certain circumstances, a lump sum. The pension will not provide dependant benefits but may pay a death benefit lump sum in certain circumstances.

The pension credit is worked out using actuarial factors and is paid from your Normal Pension Age (NPA). For classic, premium, classic plus and nuvos the NPA is age 60. For alpha the NPA is the later of age 65, or your State Pension Age (SPA). If you have already reached your NPA, the pension credit will be payable from the effective date.

You can claim your pension from 55 onwards but be aware that, if you take it before your NPA, your pension will be significantly reduced because of early payment.

If you have an illness where your life expectancy is less than 12 months, we will convert your pension into a lump sum payment."

My own background is LGPS, and I can state with 100% certainty that Pension Credit member rules are very specific.  Including not being available for payment in full before 65/SPA (55 subject to early payment reduction) unless, like the CSPS, the pension credit member has been given a prognosis of less than 12 months.  

The copied extract, above, is a direct lift from the CSPS website, and clearly states that the only earlier payment option available to Pension  Credit members is in the case of those with less than 12 months life expectancy.   I do sympathise with your friend's predicament, but the fact that they have been in receipt of an ill health pension in their own right since 2017 is totally irrelevant - the only rules that count are the rules pertaining to pension credit membership.  In a case like this, when the rules are quite clear, the trustees do not have discretionary rights to authorise a contra-regulationary payment.  I appreciate that you are trying to help your friend, but I do fear that you are just giving them false hope by going down the IDR route.  Just because you are eligible to lodge a complaint doesn't mean that you will get the answer you are hoping for.  May I kindly suggest that you direct your considerable energies into investigating what other help - financial or otherwise - that your friend may be eligible for?   

fluffy_sloth

I understand where you’re coming from and I appreciate your perspective, particularly with your LGPS background. However, I’d just like to gently clarify something—there’s actually another section on the Civil Service Pensions website, under the divorce and pension credit guidance, that includes this line:

“You can claim your pension benefits at your normal pension age or earlier if you suffer from serious ill health.”

This suggests that the scheme does retain discretion in cases of serious ill health, beyond just terminal illness. That’s what we’re seeking clarification on through the IDR process.

I completely agree that the rules for pension credit members are more limited than for ordinary members—but where there is discretionary language, it seems reasonable to ask the scheme to consider how it applies in this unique case.

To be clear, we’re not demanding anything outside of the law. We’re simply asking whether discretion can be exercised when someone has already been medically retired from the same scheme and is suffering financial hardship.

Thanks again to everyone who’s contributed—we’ll let the formal process run its course and update the thread with the outcome in case it helps others in future.

Silvertabby

fluffy_sloth said:

I understand where you’re coming from and I appreciate your perspective, particularly with your LGPS background. However, I’d just like to gently clarify something—there’s actually another section on the Civil Service Pensions website, under the divorce and pension credit guidance, that includes this line:

“You can claim your pension benefits at your normal pension age or earlier if you suffer from serious ill health.”

This suggests that the scheme does retain discretion in cases of serious ill health, beyond just terminal illness. That’s what we’re seeking clarification on through the IDR process.

I completely agree that the rules for pension credit members are more limited than for ordinary members—but where there is discretionary language, it seems reasonable to ask the scheme to consider how it applies in this unique case.

To be clear, we’re not demanding anything outside of the law. We’re simply asking whether discretion can be exercised when someone has already been medically retired from the same scheme and is suffering financial hardship.

Thanks again to everyone who’s contributed—we’ll let the formal process run its course and update the thread with the outcome in case it helps others in future.

Well, I have to say I admire your tenacity!  

Unfortunately, it's all down to understanding the terminology used, and in public sector pensionspeak, SERIOUS ill health means a prognosis of less than 12 months.  I'm not disputing that - just saying that your friend can't access their pension credit benefits under the same rules that allowed them early access to their own scheme benefits.  And there is no discretion to allow contra-regulationary payments, regardless of the circumstances.  

Marcon

fluffy_sloth said:

I understand where you’re coming from and I appreciate your perspective, particularly with your LGPS background. However, I’d just like to gently clarify something—there’s actually another section on the Civil Service Pensions website, under the divorce and pension credit guidance, that includes this line:

“You can claim your pension benefits at your normal pension age or earlier if you suffer from serious ill health.”

This suggests that the scheme does retain discretion in cases of serious ill health, beyond just terminal illness. That’s what we’re seeking clarification on through the IDR process.

I completely agree that the rules for pension credit members are more limited than for ordinary members—but where there is discretionary language, it seems reasonable to ask the scheme to consider how it applies in this unique case.

To be clear, we’re not demanding anything outside of the law. We’re simply asking whether discretion can be exercised when someone has already been medically retired from the same scheme and is suffering financial hardship.

Thanks again to everyone who’s contributed—we’ll let the formal process run its course and update the thread with the outcome in case it helps others in future.

'Serious ill health' has a specific meaning in pensions. It means life expectancy is no more than 12 months - and I completely understand why someone who doesn't work in the mystical world of pensions is going to be misled by that.

Marcon

fluffy_sloth said:

Just a quick follow-up to clarify something, as I’ve seen a few posts suggesting pension credit members can't access benefits early.

The person I'm helping is already in receipt of a Civil Service ill-health pension, awarded in 2017. They're now a pension credit member as well, due to a Pension Sharing Order, and the concern is that the scheme is treating them only as a healthy, deferred member in this second case—even though they've already been medically retired from the same scheme.  They have discretionary powers to help people who are under financial hardship.

We're aware that pension credit members usually can't access funds before age 55, but this is a unique situation involving prior ill-health retirement and financial hardship. It’s now being formally reviewed under the IDR process, and if anyone’s seen similar cases where discretion was applied, I’d still really appreciate hearing from you.

I wonder if this extract (screenshot taken directly from the Regs a minute ago) might help to clarify the rules the scheme must apply in the case of a 'dual member' - and that's what your friend is. It isn't a unique situation as you believe and the Regs cover the position in 96.(3):



You say 'They have discretionary powers to help people who are under financial hardship'. Could you cite what you're looking at which leads you to believe that, please? It might be that someone here can expand and clarify.