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

Silvertabby

Speaking with my (ex) LGPS hat on, it is theoretically possible for members in their own right to be given discretionary early access to their benefits on compassionate grounds.  However, this was extremely rare and I can only quote one example from my 20 years service.  From memory, that was a lady with substantial nembership in her own right who needed to take early retirement to take care of her very poorly husband.

But, I do stress that this discretion only applies to member's own benefits, and not pension credit members.  The reason for this largely being down to cost.  ie, if an employer approved early access to benefits on compassionate grounds, then said employer would have to pay a lump sum to the LGPS to cover the difference between the pension being paid at NRA and the earlier, approved date.  In short, a payment of many £Ks.  In the case of a pension credit member, there is no employer to pay the pension fund strain costs, and the rules just don't allow for any unfunded early payment.

I'll give you that there are no strain costs to pay in the event of ill health retirement, but that isn't relevant in this case as the rules are black and white - pension credit benefits may only be paid in the event of SERIOUS ill health, meaning the pension credit member would have less than 12 months to live 

Financial hardship, as a reason for early access to pension benefits, will never wash.  Pension schemes would be bankrupted in no time!  

fluffy_sloth

UPDATE: Found the actual rules. Turns out I was right all along. Classic pension credit members CAN access benefits early, including from age 50 with actuarial reduction, and medical retirement has no minimum age. Here's the official guidance...

Classic Scheme Pension Credit Guidance

Civil Service pension credit members under the Classic scheme have specific entitlements and procedures that differ significantly from both regular members and Alpha scheme pension credits. Classic pension credit members benefit from earlier normal retirement age (60 vs 65+), unique preservation options, and comprehensive protection under 2015 remedy provisions. This research identifies extensive official guidance across MyCSP publications, statutory instruments, and specialized administrative documents that govern their rights and benefits.

Core benefits and entitlement framework

Classic scheme pension credit members become scheme members in their own right through Pension Sharing Orders following divorce or dissolution proceedings. Their Normal Pension Age is 60, providing a significant advantage over Alpha scheme credits who must wait until 65 or State Pension Age. Benefits are calculated using actuarial factors specific to the credit member's age and gender, with pension payments available from age 55 onwards (though with actuarial reduction for early access).

Lump sum entitlements offer particular flexibility for Classic credit members. They can convert pension to cash at £12 for every £1 of annual pension given up, with additional conversion opportunities available for those who became pension credit members after 30 September 2007 where the former spouse worked for Civil Service organizations after that date. Notably, pension credits don't provide dependant benefits, but they do include death benefit provisions - 25% of pension credit value as lump sum if death occurs before benefits become payable and before age 75.

The claiming process requires three months' notice to MyCSP before Normal Pension Age, with completion of Personal Details Forms and death benefit nomination documentation (form PCDB1 specifically for pension credit members). Serious ill-health provisions allow pension conversion to lump sum payment where life expectancy is less than 12 months.

Ill-health retirement and medical assessment procedures

Classic scheme pension credit members face identical medical assessment criteria to regular Classic members, administered through the Scheme Medical Adviser (currently Capita Health & Wellbeing). The assessment requires members to be "prevented by ill health from discharging duties and that the ill health is likely to be permanent" with minimum two years' qualifying service.

Assessment timescales vary significantly based on complexity: 10 working days with sufficient information, extending to 65 working days requiring both personal consultation and additional medical reports. Medical evidence must demonstrate a recognized medical condition with clinical findings, permanent incapacity until scheme pension age, and evidence that appropriate treatments have been exhausted.

The assessment process involves IHR1 form completion, medical consent for practitioner contact, and comprehensive evidence including current medical reports (within three months), GP and specialist reports, occupational health records, and detailed job descriptions with sickness absence records. Terminal illness cases receive expedited assessment where life expectancy is less than 12 months.

Enhancement provisions follow Classic scheme rules: no enhancement for 2-5 years service, service doubling for 5-10 years (capped at age 65 equivalent), and for 10+ years service, the greater of Method A (20 years total) or Method B (6⅔ years addition). The 2015 Remedy provisions ensure retrospective reviews for applications between April 2015-March 2022, with ill-health underpin guaranteeing at least equivalent benefits to PCSPS rules.

Early access and preservation options

Classic pension credit members enjoy unique early access provisions not available to other scheme types. Standard early access is available from age 50 (55 in some cases) with actuarial reduction, requiring 2+ years qualifying service and permanent benefit reduction reflecting longer payment periods.

Early Payment of Preserved Pension (EPPA) represents a distinctive Classic-only benefit. This provision allows former Classic members who left employment with preserved pensions and subsequently fell ill to access benefits if they would have qualified for medical retirement while employed. EPPA benefits aren't enhanced but attract pension increases and aren't subject to further review, requiring application through former employers or MyCSP using form EPPA1.

Special conditions include terminal illness provisions with expedited assessment for life expectancy under 12 months, and "compelling personal reasons" access from age 50+ where members have insufficient money to live on. Medical retirement requires no minimum age if criteria are met, distinguishing it from standard early access provisions.

Alpha versus Classic scheme treatment differences

The most significant difference between Alpha and Classic pension credit treatment centers on Normal Pension Age disparity - Classic at 60 versus Alpha at the later of age 65 or State Pension Age. This five-plus year difference substantially affects when benefits become accessible without reduction.

Benefit calculation methodologies differ fundamentally: Classic uses final salary calculations linked to final pensionable earnings at retirement, while Alpha employs Career Average Revalued Earnings (CARE) with 2.32% annual accrual rates and annual price inflation revaluation. Both schemes offer similar lump sum conversion at £12 per £1 of annual pension, though Classic members have additional conversion opportunities for post-2007 pension credits.

2015 Remedy (McCloud) provisions create particularly advantageous treatment for pension credits. Unlike regular members who must choose between schemes, pension credit members are protected from remedy discrimination and can retain benefits in both schemes where applicable. For mixed service situations, scheme administrators calculate two Cash Equivalent Transfer Values - one using PCSPS rules and one using Alpha rules for the remedy period, with the higher value used for pension sharing calculations.

Administrative differences reflect the schemes' distinct regulatory frameworks: Classic operates under Principal Civil Service Pension Scheme regulations with established final salary processes, while Alpha functions under Public Service (Civil Servants and Others) Pensions Regulations 2014 with career average administration requiring annual revaluation processes.

Official publications and regulatory framework

Comprehensive official documentation exists across multiple authoritative sources governing Classic pension credit member entitlements. Primary legal frameworks include the PCSPS Section I (2002 Section) rule books, PCSPS Section IV General Provisions, and multiple amendment schemes from 2010-2019 updating pension credit rules.

Cabinet Office policy documents provide extensive guidance, particularly the Civil Service Pensions 2015 Remedy McCloud Consultation Response - a 117-page document covering pension credit member treatment extensively, including detailed provisions for Pension Sharing Orders, top-up provisions, and choice mechanisms for mixed service situations.

Statutory instruments establish the legal foundation through The Public Service (Civil Servants and Others) Pensions Regulations 2014, Public Service Pensions and Judicial Offices Act 2022, and various amendment regulations. HM Treasury directions provide technical guidance on compensation policies, interest calculations, and penalty credit calculations for pension credit adjustments.

MyCSP administrative resources include comprehensive scheme guides, Employer Pension Notices (EPNs) with technical calculation guidance, and specialized 2015 Remedy FAQs explaining choice mechanisms and Remediable Service Statement provisions. The Civil Service Pension Scheme website (civilservicepensionscheme.org.uk) serves as the primary repository for member-focused guidance and official publications.

Parliamentary oversight includes National Audit Office investigations into scheme administration effectiveness and House of Commons/Lords committee reports providing legislative history and policy development context for pension credit provisions.

Conclusion

Classic scheme pension credit members operate within a well-documented regulatory framework that provides significant advantages over Alpha scheme counterparts, particularly regarding earlier normal retirement age and unique preservation options like EPPA. The extensive official guidance across MyCSP, Cabinet Office, and statutory sources ensures comprehensive coverage of member rights, with 2015 Remedy provisions offering additional protections and choice mechanisms. Medical assessment procedures follow rigorous but fair processes through independent Scheme Medical Advisers, while early access options provide flexibility for various circumstances including terminal illness and financial hardship.

 

DRS1

What you quote actually says Medical retirement requires no minimum age if criteria are met,

what are the criteria? 

It sounds like you need to go to the rules themselves for the answer but you say you have found them so what do they say?

fluffy_sloth

I think you may have misunderstood my situation.

I have TWO separate pensions:

1. My original Civil Service ill-health pension (which I'm already receiving)
2. A NEW pension credit awarded through divorce proceedings (which MyCSP told me I can't access until age 55, or age 60 without reduction)

However, according to the Classic scheme rules I've researched, pension credit members should be able to access benefits from age 50 with actuarial reduction, not 55 as MyCSP stated. Medical retirement has no minimum age if criteria are met.

The question was whether my existing ill-health status (awarded under the classic pension, which is the same as the PSO pension) should allow early access to the NEW pension credit, and whether MyCSP applied the correct age thresholds in the first place.

Since I already qualified for ill-health retirement once, the question is whether this should apply to the pension credit portion - especially given I should apparently have access from age 50 anyway, not 55.

This isn't about wanting 'more money' - it's about whether the correct rules were applied to my pension credit entitlement, and whether my existing medical status should have been considered.

The original post was asking if anyone had experience with this specific scenario.

Marcon

fluffy_sloth said:

Hi all,
I'm helping someone close to me who is in a difficult situation and could really use some guidance from anyone who’s been through something similar.

They were awarded a Pension Sharing Order (PSO) as part of a divorce. It’s from the Civil Service Classic pension scheme, and the PSO has now been implemented.

The issue is this: the person is already in receipt of a Civil Service ill-health pension, awarded several years ago and still ongoing (Classic Pension - same as the PSO). They are under the normal pension age and have asked to access the PSO pension credit early—due to their established ill-health status and financial hardship.

However, the scheme has refused, saying the earliest access is 55 unless terminally ill. This doesn’t seem right, especially given they’ve already been medically retired by the same scheme. There’s now a formal complaint going through the IDR process.

Has anyone:

• Been able to access a PSO pension credit early due to ill-health?

• Gone through the IDR or Ombudsman process over this sort of issue?

• Had experience with how MyCSP or Civil Service Pensions handle similar cases?

Any insights, even if just to say "me too", would be massively appreciated.

Thanks in advance.

Given you said in your first post (quoted above for ease of reference) that the scheme has refused, are you saying that they have now confirmed your pension credit pension can be paid at age 52 on grounds of ill health? PLEASE don't say yet again that we 'haven't understood' your friend's - or more accurately your - situation; we have, so you don't need to keep repeating the point that you were granted ill health early retirement in respect of your own membership.

fluffy_sloth said:

UPDATE: Found the actual rules. Turns out I was right all along. Classic pension credit members CAN access benefits early, including from age 50 with actuarial reduction, and medical retirement has no minimum age. Here's the official guidance...

Classic Scheme Pension Credit Guidance

Please could you give the link to the 'actual rules' you've found? I'd be genuinely interest to read them - not a sentiment I express very often where public sector schemes are concerned!

 What you have cut and pasted just appears to be some sort of research document, and indeed is headed 'guidance':

fluffy_sloth said:

Classic Scheme Pension Credit Guidance

Civil Service pension credit members under the Classic scheme have specific entitlements and procedures that differ significantly from both regular members and Alpha scheme pension credits. Classic pension credit members benefit from earlier normal retirement age (60 vs 65+), unique preservation options, and comprehensive protection under 2015 remedy provisions. This research identifies extensive official guidance across MyCSP publications, statutory instruments, and specialized administrative documents that govern their rights and benefits.

fluffy_sloth

Under Classic scheme rules, pension credit members become scheme members in their own right, not just 'pension credit members.' Once that happens, the standard Classic member rules apply - including early access from age 50 and medical retirement provisions. This is different from Alpha scheme pension credits, which have more restrictive rules.

The distinction matters because my pension credit derives from a Classic scheme pension, so Classic rules apply.

I am still waiting for the outcome from IDR2, but once the cabinet office realises that the rules applied have been for ALPHA and NOT CLASSIC, they will hopefully reassess.

Marcon

fluffy_sloth said:

Under Classic scheme rules, pension credit members become scheme members in their own right, not just 'pension credit members.' Once that happens, the standard Classic member rules apply - including early access from age 50 and medical retirement provisions. This is different from Alpha scheme pension credits, which have more restrictive rules.

The distinction matters because my pension credit derives from a Classic scheme pension, so Classic rules apply.

I am still waiting for the outcome from IDR2, but once the cabinet office realises that the rules applied have been for ALPHA and NOT CLASSIC, they will hopefully reassess.

It is the legislation on which the administrators will act. I've asked you for the link to the 'actual rules' you say you've found - ie the legislation.

If you can't provide that, perhaps you could give the link to the general text you've quoted, please?

fluffy_sloth

This makes it very clear:

https://gadfactorguidancehub.co.uk/media/pdfs/Historic/CSPS_GB/CSPS_GB_PCSPS_Divorce_Pension_Credit_Member_Guidance_FINAL-26June15.pdf

• Classic pension credit members become members in their own right

• Normal Pension Age is 60, not 65+

• Early access is allowed from 50/55 (with or without medical grounds)

• The pension can be commuted

This isn’t speculation, it’s from the scheme managers themselves.
I’ve got it handled now. Thanks for the input.

DRS1

I think I may have found the rules for Classic.
scheme-rules-section-ii-1972-section-from-november-2016.pdf

Pension Credit Members are covered by Section 12.  I have tried to quote the early retirement section and the ill health section from those rules but the layout has gone a bit awry.  The key is there seems to be no ability to take early retirement on ill health grounds and the normal early retirement only kicks in at 55 (even though benefits can be taken unreduced from age 60).

Early payment of pension credit member’s benefits 

12.4 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

(vi) 

A pension credit member who is entitled to a pension under rule 12.2 and, if rule 

12.2(iv) applies, to a lump sum, and who has reached the age of 55 years may opt 

for immediate payment of a reduced pension and (if applicable) lump sum before 

reaching pension age. 

The annual amount of the pension and (if applicable) the amount of the lump sum to 

which the pension credit member is entitled under this rule is an amount calculated in 

accordance with rule 12.2 but reduced after consultation with the Scheme Actuary. 

A pension credit member who opts for payment of an immediate pension under this 

rule may buy out the actuarial reduction that would otherwise apply to the pension 

credit member's pension and (if applicable) lump sum by giving notice in writing to 

the scheme administrator in such form as the Minister requires. 

The cost of buying out the actuarial reduction is set out in tables prepared by the 

Minister, after consulting the Scheme Actuary. 

The pension credit member must meet the cost of buying out the actuarial reduction 

by paying a special contribution to the scheme. 

Where a pension credit member exercises the option to buy out the actuarial 

reduction on a pension and (if applicable) lump sum payable under this rule, the 

amount of the pension credit member's pension and (if applicable) lump sum are 

calculated as if the reference in paragraph (ii) to applying an actuarial reduction were 

omitted. 

(vii) Where regulation 7(5) of the Pension Sharing (Pension Credit Benefit) Regulations 

2000 (early or deferred retirement) applies, the Minister must be reasonably satisfied 

that the requirements of that regulation have been met. 

Commutation of pension credit member's pension into lump sum 

on ill health 

12.5 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

A pension credit member who is suffering from serious ill health may elect, before 

the benefits under rule 12.2 are due to come into payment, to commute the whole of 

his or her pension credit into a lump sum payment. This paragraph is subject to 

paragraph (v). 

The lump sum payment shall be an amount equal to five times the initial annual 

pension which would be payable if the pension credit member had reached the age 

of 60 years. 

In this rule, “serious ill health” means ill health which is such as to give rise to a life 

expectancy of less than one year from the date on which an election is made under 

this rule. 

For the purposes of this rule, the pension credit member will be required to be 

medically assessed by the Scheme Medical Adviser. 

No lump sum shall be payable under this rule unless the lump sum is a serious ill 

health lump sum for the purposes of Part 4 of the Finance Act 2004 (see paragraph 4 

of Schedule 29 to that Act). 

DRS1

fluffy_sloth said:

This makes it very clear:

https://gadfactorguidancehub.co.uk/media/pdfs/Historic/CSPS_GB/CSPS_GB_PCSPS_Divorce_Pension_Credit_Member_Guidance_FINAL-26June15.pdf

• Classic pension credit members become members in their own right

• Normal Pension Age is 60, not 65+

• Early access is allowed from 50/55 (with or without medical grounds)

• The pension can be commuted

This isn’t speculation, it’s from the scheme managers themselves.
I’ve got it handled now. Thanks for the input.

Small point there is a newer version of that document here

CSPS_GB_PCSPS_Pension_Credit_Member_Guidance_1_October_2019.pdf

Other point I do not see where that document says Early access is allowed from 50.

Oh and GAD are the actuaries not the managers.

Do let us know how the IDR is decided.