Ill Health Retirement
Ill Health retirement is a way of accessing your pensions income if you become unable to do your job due to ill health.
This document will give you more information about the pension schemes and the conditions which must be met before you can qualify for early release of pension benefits.
University employees are normally members of one of two schemes.
The two pension schemes accessed by Loughborough University are Local Government pension Scheme (LCC) for employment banding 1-5 and Universities Superannuation Scheme (USS) for employment banding 6 and above.
If you are absent from the workplace due to ill health, your manager (in line with the sickness policy) may refer you to Occupational Health. If you are permanently incapable of returning to work due to illness/injury you and your manager, in consultation with your HR Partner, may wish for Ill Health retirement (IHR) to be considered.
If you are permanently unable to return to your job or any alternative jobs available at the University, the decision to terminate your contract on the grounds of ill health may be made. Providing you have contributed to a pension scheme during your employment with Loughborough University it may be possible to explore accessing your pension benefits early through Ill Health Retirement.
Please note: This is a process that would run alongside a decision to terminate a contract of employment.
What are the qualifying conditions for ill health retirement?
There are two or three tiers of ill health retirement benefits dependent upon which pension scheme you are a member of. The tier awarded will depend on the severity of their condition and the likelihood of you being able to work again.
To qualify for ill-health retirement benefits you must:
- Have at least two calendar years continuous membership, and
- leave pensionable employment due to illness or injury, and
- Be under the pension scheme normal pension age
LCC (Grades 1-5) Summary
Tier 1 - Permanent incapacity to undertake any gainful employment before your Normal Pensionable Age (NPA)
Tier 2 - Incapacity to be able to work for 3 years, but may be able to work before NPA
Tier 3 - You are likely to be able to undertake gainful employment within 3 years
USS (Grade 6 and above) Summary
Tier 1 - Can only be granted if unable to work in any capacity for the next 5 years or until reaching retirement age whichever is later.
Tier 2 - If you are unable to perform your own job or any similar job but may be able to undertake some other level of employment, regardless whether any such employment is available. Capability to undertake a job other than the contracted job is not restricted to one of similar earning capacity, for example a Manager who was no longer capable of that role but could work in an administrative or technical role would not be eligible Tier 1 pension.
Can I apply for ill health retirement if I am over the scheme normal pension age?
Ill health retirement is only available to members who have not yet reached the normal pension age. The only exception is when a member has life expectancy of less than 12 months.
Unless you are terminally ill, on reaching your normal pension age there is no additional benefit from applying for ill health retirement.
Ill health retirement process
When you have been absent from the workplace due to ill health or injury, in line with the sickness absence policy, you are likely to be referred to Occupational Health for assessment. During this process it is likely that further medical information will be sought from your treating specialist or GP.
If all recommendations for reasonable adjustment are exhausted, there are no options for redeployment, and you are still unable to return to work; you will be referred to an Occupational Health Physician (OHP). The Occupational Health Physician will determine if ill health retirement is applicable and which Tier will apply to your circumstances.
The Occupational Health Physician will compile a report to be sent to your manager and HR Partner, along with a certificate to be sent to the relevant pension’s agency. This will confirm their assessment whether Ill Health Retirement is applicable and which Tier applies. Consent will be sought from the employee to send these reports.
You will be advised of the grounds of the original decision and have the right to appeal if you are not dissatisfied with the outcome. However, an appeal can only be made in the following circumstances:
- You have consented to the release of the report to HR/Manager, outlining the OHP’s opinion of applicability of ill health retirement criteria with an addendum outlining your reasons for disagreement.
- If details are factually incorrect.
- If there has been a change in your circumstances, health condition or treatment regime.
The appeal maybe considered by a doctor or panel of doctors who would include an accredited specialist in occupational medicine with knowledge and experience to assess the appeal. Appeals are conducted on a ‘papers only’ basis. This is partly for logistical reasons, but also because further examination is unlikely to provide new objective evidence.