USS - best options when a terminal diagnosis is received?

GDB2222

One other point worth considering is how frank the doctor has been about life expectancy. My experience is that they always tend towards being over optimistic. Presumably, this is because they don’t want to depress the patient any more than they have to. However, for the purpose of financial planning, it is often necessary to be realistic, rather than optimistic. 

Tarama

GDB2222 said:

One other point worth considering is how frank the doctor has been about life expectancy. My experience is that they always tend towards being over optimistic. Presumably, this is because they don’t want to depress the patient any more than they have to. However, for the purpose of financial planning, it is often necessary to be realistic, rather than optimistic. 

Hello GDB2222

This is probably in months and the situation keeps changing as more results come in.  Thank you.  

Tarama

Cornish_mum said:

Hello, I am also USS and have looked at a similar situation for myself.

As others have said DinS, spouse and dependent children pension can be considerable and should be carefully weighed up against early pension. 

In addition to all the advice above your friend should consider speaking to UCU if a member.

Please also consider their employers sick and medical leave entitlement policy. In this situation taking a mix of annual and medical leave (typically half days for medical appointments are not counted as sick leave) for as long as possible prior to triggering sick leave, & then a period of unpaid leave (possibly with the employee paying voluntary USS contributions) may be beneficial, if the employer is willing to facilitate.  

Their diganosis is also relevant to consider, in case it classes them as disabled in terms of employment law, which can be helpful when interacting with the HEI HR team.  

Hello Cornish_mum 

Thank you for kindly sharing your experiences.  My friend is not a UCU member, I wonder if that would be beneficial - I will investigate this.  My friend is unable to work at present due to symptoms and treatment.  I don't know about the disabled angle - I suspect my friend would be classed as such.  

Again thank you.

Tomatillo

Cornish_mum said:

Hello, I am also USS and have looked at a similar situation for myself.

As others have said DinS, spouse and dependent children pension can be considerable and should be carefully weighed up against early pension. 

In addition to all the advice above your friend should consider speaking to UCU if a member.

Please also consider their employers sick and medical leave entitlement policy. In this situation taking a mix of annual and medical leave (typically half days for medical appointments are not counted as sick leave) for as long as possible prior to triggering sick leave, & then a period of unpaid leave (possibly with the employee paying voluntary USS contributions) may be beneficial, if the employer is willing to facilitate.  

Their diganosis is also relevant to consider, in case it classes them as disabled in terms of employment law, which can be helpful when interacting with the HEI HR team.  

Just on this point 'As others have said DinS, spouse and dependent children pension can be considerable and should be carefully weighed up against early pension.' My understanding is that the spouse and dependent children pensions are calculated in the same way regardless of whether it is due to death in service or in ill-health retirement. BUT the lump sum will be higher for death in service than death following total ill-health retirement. If you have serious ill-health retirement then the commutation of the benefits might well be much higher than the lump sum in either of these scenarios. 

That said, I have found it really difficult to get a clear answer on whether the spouse/dependent's pensions are the same in these three scenarios. The factsheet says 'pensions would still be payable to a spouse, civil partner or other dependants as usual' but nothing more. I did go through the scheme rules and will have to look again but if anyone knows the answer then it would be very helpful...

Tomatillo

Just to follow up on my comment above. I went back to the rules. This is just my reading as a non-expert so don't rely on it and if anyone has a view on whether this is right or wrong I would really appreciate it.

Rule 54.3.4 (taking serious ill-health commutation of benefits) says: 'it shall not affect any benefits payable on the death of an individual under rules 27, 30 and 32 (as applicable) as those benefits shall be held in a separate arrangement under the scheme from the date the individual’s benefits are commuted.'

Rules 27, 30 and 32 – are all about death of a pensioner member, so my reading is that the spouse/children's pensions on death should not be affected by the choice between serious ill-health commutation and total ill-health retirement. BUT that's not completely clear because rules 27, 30 and 32 distinguish dealth in retirement and death after retirement for total incapacity and I am not sure which is relevant in this scenario, if it's the former then it would make quite a difference, especially if the person died young. 

The other difficult question is whether the calculations in those rules on death in retirement are different from death in service. From what I can see that means comparing rule 26.2 (D in S) with 27.2 (D in retirement - noting rules on death in total incapacity again) etc. There DOES seem to be a difference there in relation to the already accrued pension, because in the D in S calculation that is by reference to 'salary', so it looks as if the calculation for a person who has been earning above the salary threshold for a long time might be quite different for the two scenarios. If you're earning below that, presumably it's the same. 

For all of these reasons I find it quite difficult to be certain on how the rules apply and where to get decent information. The ill-health and serious ill-health fact sheets both say 'Pensions would still be payable to your spouse, civil partner, eligible children and/or other dependants as usual.' but I'm not sure whether 'as usual' means 'exactly the same'

Tarama

Tomatillo said:

Just to follow up on my comment above. I went back to the rules. This is just my reading as a non-expert so don't rely on it and if anyone has a view on whether this is right or wrong I would really appreciate it.

Rule 54.3.4 (taking serious ill-health commutation of benefits) says: 'it shall not affect any benefits payable on the death of an individual under rules 27, 30 and 32 (as applicable) as those benefits shall be held in a separate arrangement under the scheme from the date the individual’s benefits are commuted.'

Rules 27, 30 and 32 – are all about death of a pensioner member, so my reading is that the spouse/children's pensions on death should not be affected by the choice between serious ill-health commutation and total ill-health retirement. BUT that's not completely clear because rules 27, 30 and 32 distinguish dealth in retirement and death after retirement for total incapacity and I am not sure which is relevant in this scenario, if it's the former then it would make quite a difference, especially if the person died young. 

The other difficult question is whether the calculations in those rules on death in retirement are different from death in service. From what I can see that means comparing rule 26.2 (D in S) with 27.2 (D in retirement - noting rules on death in total incapacity again) etc. There DOES seem to be a difference there in relation to the already accrued pension, because in the D in S calculation that is by reference to 'salary', so it looks as if the calculation for a person who has been earning above the salary threshold for a long time might be quite different for the two scenarios. If you're earning below that, presumably it's the same. 

For all of these reasons I find it quite difficult to be certain on how the rules apply and where to get decent information. The ill-health and serious ill-health fact sheets both say 'Pensions would still be payable to your spouse, civil partner, eligible children and/or other dependants as usual.' but I'm not sure whether 'as usual' means 'exactly the same'

Thank you Tomatillo

For taking such a lot of time with your responses.  My friend is early 60s and no dependant children, but has a spouse.  The problem is a changing (worsening diagnosis) and emotionally  coping with this, resulting in a kind of paralysis with an inability to take action.  Which one could entirely understand.  When the time is right I aim to be able to give the options here.