A member is entitled to a Tier 3 ill health pension where the employer determines that the member is likely to be capable of undertaking gainful employment within three years of leaving or, if earlier, before their Normal Pension Age (NPA).
The Tier 3 ill health pension is payable for a maximum of three years and is subject to a review by the previous employer (who awarded it), when the Tier 3 pension has been in payment for 18 months.
There are two parts to the ill health review:-
- To establish whether the previous employee has returned to gainful employment or, if not,
- Whether the pension should continue at the level of Tier 3 or be enhanced to a Tier 2 level of benefits.
Gainful employment
A member with a Tier 3 ill health pension in payment is required to tell the previous employer if they obtain employment at any time during the three years of payment.
The Tier 3 pension must cease if the previous employer determines that the member is in gainful employment. Gainful employment is defined as ‘paid employment for not less than 30 hours in each week for a period of not less than 12 months’.
If the previous employer determines that the member is in gainful employment, they should advise them that their pension payments from the North Yorkshire Pension Fund (NYPF) will stop. The previous employer should also tell the NYPF to stop the pension payments and the date from which they should stop. The NYPF will tell the member when payments have ceased.
The 18 month review
If the pension is still in payment after 18 months the previous employer (who awarded it) must arrange for the member to be assessed again by an Independent Registered Medical Practitioner (IRMP), this can be the same IRMP that was used for the original Tier 3 ill health retirement. The previous employer should complete Part A of a Tier 3 ill health review certificate before sending it to the IRMP. The IRMP must complete Part B and Part C of the same certificate to provide an opinion on whether the member will be likely to be capable of undertaking gainful employment and, if so, when.
When the IRMP has assessed the member and completed a Tier 3 ill health review certificate, the previous employer must decide to do one of the following:
- Request that payment of the pension is stopped.
- Continue payment of the pension at the same Tier 3 level for the remaining time of the three year payment period or to Normal Pension Age (NPA) if earlier.
- Award a Tier 2 ill health pension if the previous employer is satisfied that the member is permanently incapable of carrying out the role of the previous employment: and would be unlikely to be capable of undertaking gainful employment before their NPA (or 65 if later) or would be unlikely to be capable of undertaking gainful employment within three years of leaving but is likely to be capable of undertaking gainful employment prior to their NPA (or 65 if later).
The previous employer should complete Part D of the Tier 3 ill health review certificate and send it to the NYPF. The member should also be advised of the decision.
When the NYPF receives the Tier 3 ill health review certificate the member’s record will be updated to show the result of the review. If the pension has been uplifted to a Tier 2 pension the new level of pension benefit will be calculated and the pension payment adjusted. We will confirm the following to the member:
- the date the pension will stop being paid or
- the pension will continue at the same level until the end of the three years or
- the amount of the increased pension, the date the pension will increase and that the pension will be payable for life.
Member requested review
A member receiving a Tier 3 ill health pension, or a member whose Tier 3 ill health pension was suspended within the last three years, may request that their pension is uplifted to a Tier 2 ill health pension. The employer should follow the same process as for the 18 month review.
Suspended Tier 3 ill health pensions (deferred pensioners)
When payment of a Tier 3 ill health pension is stopped it becomes deferred. The member can request payment of their deferred benefits on or after 55 and by no later than age 75. The pension will be reduced for early payment if taken before the member’s NPA.
A member who has a suspended Tier 3 ill health pension can at any time before their NPA, request that the suspended pension is brought back into payment because of ill health or infirmity of mind or body. The previous employer must arrange for a review by the IRMP and for the correct ill health review certificate to be completed. The IRMP can be the same one who provided the ill health certificate for the initial Tier 3 ill health retirement.