Ill health retirement, where Occupational Health issue a report to management advising that you meet the medical criteria, allows you to retire before your normal retirement age. You can get immediate payment of your pension benefits without actuarial reduction. You may also be awarded added years, if you meet the eligibility criteria.
To be eligible for ill health retirement, you must have both:
- been a pension scheme member for 2 years
- become too ill to work
Pension and lump sum
Your pension and lump sum is calculated in the same way as your age retirement pension and lump sum. These will be payable immediately.
Added years of service
As well as your actual service you may be awarded added years. This is where additional years of pensionable service are added to your actual service. This only applies if you are a member of a pre-existing pension scheme (started before 1 January 2013).
Added years are calculated by your length of service and your age at the date of retirement. This is to compensate you because you have to retire early due to medical reasons.
Spouse and children
You will owe contributions towards your spouse’s and children's scheme (if applicable) for potential service to age 65. This ensures that your spouse and dependents will receive the maximum pension payments in the event of your death. The cost is 1% of your final salary for every year owed. This is deducted from your lump sum on retirement.
Applying for ill-health retirement
You can apply to retire early on ill health grounds at any age. Your application will involve a medical assessment.
You will be referred to your local occupational health department for assessment. You can refer yourself, or be referred by your line manager.
Your application will be reviewed by an occupational health doctor. They will make an assessment based on available medical evidence and make a recommendation.
They may request additional medical evidence such as from your GP or a specialist to help with their assessment. You should include as much information as possible to prevent delays with your application.
If the occupational health doctor issues a report to management advising that you meet the eligibility criteria, the report is sent to your local HR department for approval. A HR director must approve sign-off for retirement on ill health grounds.
Your retirement date in this case will be the date that the occupational health report is issued.
Informing you of the outcome
Your local occupational health department will let you know the outcome of their review.
If you qualify for ill health retirement, you must complete the Retirement - HR107(a) and HSE leaving - HR106 forms.