Early retirement due to ill health
Discussion
If you are no longer on the payroll,there will be typically no further contributions to the pension fund. I amk not sure of UK regs on the avaiability or timing of pensiojs payouts,but defined benefit plans reduce very quickly if you have short service. Its worthwhile talking to your payroll or personnel people who normally have a specific handout on this.
However in general I would be leery of depending on a pension fund as the sole source of retirement planning in the private sector. Most of them are in fairly poor shape and the vast majority will shift to a defined contribution plan where the risk shifts to the employee.
However in general I would be leery of depending on a pension fund as the sole source of retirement planning in the private sector. Most of them are in fairly poor shape and the vast majority will shift to a defined contribution plan where the risk shifts to the employee.
There's often lots of confusion between rights and expectations on this topic.
Qualifying for an ill health early retirement pension from an occupational pension is a matter of meeting the requirements of the rules of the particular pension scheme. Most require that you get your employer's consent (due to the unfunded cost of such a pension) but provided you meet the conditions you should be OK. One usual condition is that employer's consent is subject to an independent medical practioner (IMP) certifying that in their opinion you are permanetly incapable of returning to work due to the medical condition, and getting the IMP to provide such a certification can be a problem. No certification, no pension.
There is usually no minimum age requirement for an ill health pension to be paid, nor is there any UK legislation or HMRC requirement about aminimum age.
Something to bear in mind: the criteria for getting State disability benefits is vastly different to the criteria for the early retirment pension from the pension scheme. Getting the State benefit does in no way mean you'll get the ill health early retirement pension.
So, start by looking at what the rules say.
If you have a personal pension plan of your own, then the likelyhood is that you'll have straightforward access to the funds to be used to buy an immediate annuity, possibly on impaired life terms. The big issue or you is whether or not the immediate annuity provides you with the level of income expected/needed.
R.
Qualifying for an ill health early retirement pension from an occupational pension is a matter of meeting the requirements of the rules of the particular pension scheme. Most require that you get your employer's consent (due to the unfunded cost of such a pension) but provided you meet the conditions you should be OK. One usual condition is that employer's consent is subject to an independent medical practioner (IMP) certifying that in their opinion you are permanetly incapable of returning to work due to the medical condition, and getting the IMP to provide such a certification can be a problem. No certification, no pension.
There is usually no minimum age requirement for an ill health pension to be paid, nor is there any UK legislation or HMRC requirement about aminimum age.
Something to bear in mind: the criteria for getting State disability benefits is vastly different to the criteria for the early retirment pension from the pension scheme. Getting the State benefit does in no way mean you'll get the ill health early retirement pension.
So, start by looking at what the rules say.
If you have a personal pension plan of your own, then the likelyhood is that you'll have straightforward access to the funds to be used to buy an immediate annuity, possibly on impaired life terms. The big issue or you is whether or not the immediate annuity provides you with the level of income expected/needed.
R.
rfisher said:
What happens about pensions in this situation?
Does your pension pot (thimble) stop being added to?
Do you have to wait until normal retirement age to claim it?
Add this question to the list of stuff you really should be taught at school and apologies if it's a dumb question.
Depends on the rules/regulations of the Pension Scheme.Does your pension pot (thimble) stop being added to?
Do you have to wait until normal retirement age to claim it?
Add this question to the list of stuff you really should be taught at school and apologies if it's a dumb question.
In the LGPS payments would start immediately and the amount paid would depend upon the severity of the ill health. For example
Will never work again - full pension paid immediately
Will not work for at least 3 years = reduced pension paid immediately
Could work again within 3 years = reduced pension paid for a max of 3 years
The Leaper said:
Re the LGPS, I know from dealing with a number of formal complaints that a successful application for the ill health early retirment pension from the LGPS is a rare thing!
R.
the main issue with retirement on ill health is can't do the job they were doing vs can't do any job ...R.
I disagree.
THE main issue is getting an independent medical practitioner (IMP) to formally certify that the employee is PERMANENTLY incapable of doing their own or any other job between the date of the application and the employee's normal retirment age. It needs the employee to be in a seriously medical condition for the IMP to give the certification for the length of time required. If the IMP does provide the certification, it will then be difficult for the employer to not give consent to the employee's application.
R.
THE main issue is getting an independent medical practitioner (IMP) to formally certify that the employee is PERMANENTLY incapable of doing their own or any other job between the date of the application and the employee's normal retirment age. It needs the employee to be in a seriously medical condition for the IMP to give the certification for the length of time required. If the IMP does provide the certification, it will then be difficult for the employer to not give consent to the employee's application.
R.
The Leaper said:
Re the LGPS, I know from dealing with a number of formal complaints that a successful application for the ill health early retirment pension from the LGPS is a rare thing!
R.
It didn't use to be (the changes in April 2008 have improved matters).R.
In one of my previous roles we had somebody who had retired on IH grounds twice - so he was granted IHER, given a pension, rejoined the employer a few years later in a different role, only to be given IHER (and another pension) again.
Re LGPS, let me put my view another way. It may well be that there are lots of successful applications by members for the ill health early retirement pension, but there's been a major increase in the number of complaints arising from failed applications.
I strongly suspect some of this is political. Some years ago the then government encouraged headcount reductions so this lead to local governments being reasonably lenient in their interpretation of the regulations of the LGPS, so the application success rate was quite good. Also at that time the additional liability was simply added to the overall liabilities to be funded out of future contributions paid indirectly by community tax payers. Then the government had a change of mind due to the ever increasing unfunded liabilities. They insisted that the added liabilities for any applications, if agreed to, had to be paid for immediately so the employer got an invoice for a very substantial amount. Surpise, surprise, the applications success rate has plummeted and formal complaints have risen substantially. The last change in government followed by their cost reduction programmes have also impacted applications sucesses and the number of complaints.
Just as bad is that the employers have become increasingly slipshod in the way that they have processed applications, often not in accordance with the regulations of the LGPS, meaning again there's another reasons why successes are down and complaints are up.
R.
I strongly suspect some of this is political. Some years ago the then government encouraged headcount reductions so this lead to local governments being reasonably lenient in their interpretation of the regulations of the LGPS, so the application success rate was quite good. Also at that time the additional liability was simply added to the overall liabilities to be funded out of future contributions paid indirectly by community tax payers. Then the government had a change of mind due to the ever increasing unfunded liabilities. They insisted that the added liabilities for any applications, if agreed to, had to be paid for immediately so the employer got an invoice for a very substantial amount. Surpise, surprise, the applications success rate has plummeted and formal complaints have risen substantially. The last change in government followed by their cost reduction programmes have also impacted applications sucesses and the number of complaints.
Just as bad is that the employers have become increasingly slipshod in the way that they have processed applications, often not in accordance with the regulations of the LGPS, meaning again there's another reasons why successes are down and complaints are up.
R.
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