Ill Health Retirement Assessment

The criteria and tiers for ill health retirement vary depending on the pension scheme and the regulations that apply. Generally, there are two or three tiers of ill health retirement benefits, depending on the severity and permanence of the condition and the ability to undertake any regular employment.

In the Local Government Pension Scheme:

• Tier 1 applies to those who are permanently incapable of discharging the duties of their current employment efficiently and are not immediately capable of undertaking any gainful employment.
• Tier 2 applies to those who are permanently incapable of discharging the duties of their current employment efficiently and are likely to be incapable of undertaking any gainful employment within three years of leaving.

Tier 3 applies to those who are permanently incapable of discharging the duties of their current employment efficiently but are likely to be capable of undertaking any gainful employment within three years of leaving or before their pension age, whichever comes first.

The application and evidence requirements for ill health retirement also vary depending on the pension scheme and the regulations that apply.

Generally, the application process involves the employer, the employee, the pension scheme administrator, and an independent registered medical practitioner (IRMP).

Your business must submit an application form and provide relevant medical evidence, such as reports from their GP or specialists, to support their claim. You’ll also have to provide information about the employee’s job description, duties, and performance and may refer the employee to an occupational health service for further assessment.

Your business and employee have certain rights and responsibilities in relation to ill health retirement, such as:

• Your employee has the right to apply for ill health retirement if they believe they meet the criteria, to provide relevant and accurate medical evidence, to be informed of the outcome of their application and the reasons for the decision, to appeal the decision if they disagree with it, and to receive the benefits they are entitled to.
• Your employee has the responsibility to cooperate with the application process, to attend any medical examinations or assessments as required, to inform the pension scheme administrator of any changes in their circumstances or health condition, to comply with any conditions or reviews attached to their benefits, and to declare any income or re-employment that may affect their benefits.
• Your business has the right to request an ill health retirement assessment for an employee who is absent or underperforming due to ill health, to provide relevant and accurate information about the employee’s job and duties, to be informed of the outcome of the application and the reasons for the decision, and to terminate the employment contract on the grounds of ill health retirement if the employee is awarded benefits.
• Your business has the responsibility to cooperate with the application process, to refer your employee to an occupational health service if necessary, to consider any reasonable adjustments or alternatives to ill health retirement, to act in accordance with the employment law and the pension regulations, and to pay any employer contributions or costs associated with the ill health retirement.