An increasing number of clients are contacting Lincs Law Employment Solicitors to assist them with applications for ill health retirement. Many occupational pension schemes allow members to retire before their normal retirement age if they are suffering from ill health or incapacity. If this is your situation, you may be able to apply for ill health retirement.
Employment, Disability Discrimination and Ill-Health Retirement
If you are suffering from serious and long-term ill health and incapacity and are considering ill health retirement, then it is likely you will be a disabled person for the purposes of the Equality Act 2010. As such, you will have employment protections and, also, your employer is obliged to make reasonable adjustments to assist you to remain at work.
Before considering an application for ill health retirement, it is important to consider whether you would be able to remain at work with some assistance or, in the future, you might be able to return to work with some help or changes to your normal employment practices.
The reason you should consider your status as a disabled person first is, of course, that by making an application for ill health retirement you are notifying your employer that you are unable to return to work. Even if your application is unsuccessful, your employer could then rely on that on your comments to terminate your employment on, for example, capability grounds.
Therefore, the decision whether to apply for ill health retirement should not be taken lightly and should not be considered in isolation. You should undertake an assessment of all the possible outcomes before an application is made.
What You Need To Find Out For Your Application For Ill Health Retirement
If you have decided to apply for ill health retirement, you then need to consider the provisions of your particular pension scheme. All schemes are slightly different but essentially, there are two main points to consider:
- the pension arrangement operated by your employer; and,
- what the pension scheme rules permit.
Dealing with each in turn:
The Pension Arrangement Operated By Your Employer
Your pension scheme will either be a defined benefit scheme or a defined contribution scheme.
A defined benefit pension scheme is one where your pension depends upon the number of years you have worked for your employer and the salary you have earned. The pension pays out a secure income for life which increases each year. These pension schemes are more likely to be available for large employers or in the public sector.
A defined contribution scheme is more common in the private sector. For a defined contribution scheme, both you and your employer will make contributions to your pension as your employment continues. The amount of your pension depends upon the value of the contributions paid including any benefits from those contributions being invested.
What The Pension Scheme Rules Permit
Once you have identified what type of pension you have, you will then need to review the scheme rules to see if you qualify for ill health retirement.
The scheme rules will define what constitutes ill health retirement. Broadly, they will usually follow the provisions of the Finance Act 2004 which allows registered pension schemes to pay ill health early retirement pensions to members at any age, if a registered medical practitioner can provide a report confirming that the member is medically incapable (either physically or mentally) of continuing in his or her current occupation as a result of injury, sickness, disease or disability. For the statutory definition, the member must have actually ceased to carry on their occupation. For our clients, the more common situation is that they are still employed but want to secure ill health retirement benefits before the termination of their employment.
Again, it is important to review the rules of your particular pension scheme but, broadly, there will be:
- a test for ill health;
- consideration of whether the member qualifies;
- consideration of the amount of ill health pension;
- consideration of any trustee’s discretion.
Preparing For An Application For Ill Heath Retirement
In making an application for ill health retirement, the key thing is to be well prepared. Each employer and pension scheme are likely to have slightly different requirements.However, even at this very early stage, your employer will need evidence of your eligibility. Again, dependent upon the scheme rules, they are likely to need a report from a medical specialist, known as a “IRMP” (an independent registered medical practitioner) who ought to be a specialist in occupational health.
The role of the IRMP is to assess whether an employee meets the conditions for early retirement. A common problem in applications of this nature is that the IRMP does not have sufficient information about an employee’s condition and any exhausted treatment options. Therefore, in readiness for any application, ensure you fully understand and can explain to your IRMP details of your condition and all of the treatment options that have been exhausted or which your own treating physician does not consider would work.
Also, please don’t assume the IRMP will have all your medical reports and information. Make sure that if you have reports you want to be considered, that you provide them to the IRMP. For some conditions it may be wise to seek an expert report specifically for the purpose of your application.
Clients We Have Helped
Client A: A Local Government Pension Scheme client with permanent and life-changing disabilities was awarded a Tier 3 pension by their Local Authority employer. The Local Government Pension Scheme awards ill health retirement in tiers with Tier 1 being the most serious level of ill health retirement and entitling the recipient to receive their full pension as if they had worked until their normal pension age. Tier 3 allowed our client to receive their pension but calculated as at the date that their employment was terminated. Also, benefits under Tier 3 stop after three years.
On behalf of our client, we undertook an in-depth assessment of the situation and then gathered supporting evidence by way of complaint. This resulted in a reassessment and our client was awarded a Tier 1 pension.
Client B: Our client was a member of the Local Government Pension Scheme. She had been awarded Tier 3 benefits under the scheme. However, her employers delayed her access to her pension for several months. This resulted in significant financial hardship to her as they refused to terminate her employment (which would enable her to receive payments from her ill health retirement pension).
Our client had exhausted her entitlement to sick pay and, therefore, had a substantial period of extreme financial duress as she had no income. We assisted our client by submitting complaints regarding delay, complaints regarding the management of the ill health retirement application process and, in addition, initiated ACAS Early Conciliation in respect of claims of disability discrimination. The matter was resolved successfully in that our client was able to receive her notice pay, her outstanding holiday, her pension lump sum, her monthly pension and an additional amount of compensation for the discrimination she suffered.
Lincs Law Employment Solicitors Can Help You
If you need assistance with your application for ill health retirement, please contact us for a free initial telephone enquiry on 01522 440512 or use our contact information on this website. We hope to hear from you.