If you have either left employment or opted out of the Local Government Pension Scheme (LGPS) you will have deferred benefits. This means that your LGPS pension benefits have been put on hold.
The LGPS provides ill health retirement at any age. You can apply to your former employer, not the pension fund, and ask if your deferred benefits can be brought into payment on the grounds of ill health.
Who is eligible
To be eligible for payment of deferred pension benefits on ill health grounds you must:
- be under Normal Pension Age (NPA)
- meet the criteria for payment of deferred benefits on ill health grounds
The main criteria
As your former employer is not a medical expert they will consult with an independent registered medical practitioner appointed by them, to be satisfied that you meet the ill health criteria. The main condition is that you are permanently incapable of carrying out the job you were in immediately prior to when your benefits were deferred. The other criteria are dependent on when you left your employment or opted out, as follows:
If you left/opted out between 1 April 2008 and 31 March 2014
You must have a reduced likelihood of carrying out any gainful employment before age 65 (or for at least 3 years whichever is sooner), because of your medical condition. Gainful employment means paid employment for at least 30 hours per week that lasts for at least one year.
If you left/opted out after 31 March 2014
You must not be immediately capable of carrying out any gainful employment before normal pension age (or for at least 3 years whichever is sooner), because of your medical condition. Gainful employment means paid employment for at least 30 hours per week that lasts for at least one year.
When your former employer is considering whether you meet the ill health criteria they must not consider other factors such as how long you worked for them, or your current financial position.
Ill health process
Step 1: Application
Apply to your former employer to request payment of your deferred pension benefits on ill health grounds.
Step 2: Referral
Your former employer refers your case to an independent registered medical practitioner (IRMP) appointed by them.
Step 3: Medical review
The IRMP reviews the information and issues an ill health certificate.
Step 4: Decision
Your former employer will decide whether or not to release your deferred benefits early on ill health grounds. If you left or opted out of the LGPS on or after 1 April 2008 your former employer can consider the cost of bringing your benefits into payment when using their discretion on whether to pay benefits. Your application can not however be rejected just based on cost. Your former employer will let you know their decision; they will also notify the North Yorkshire Pension Fund (NYPF) if your application has been successful.
Step 5: Pension quote
The NYPF will send you a retirement quote and forms to complete to claim your pension benefits.
Step 6: Payment of pension benefits
Once all the relevant information has been received the Employment Support Section (North Yorkshire Council) will pay your monthly pension. The NYPF will pay any tax free lump sum.
Application
You should contact your former employer to make an application for early payment of your deferred pension benefits on ill health grounds. It would be helpful to provide the dates of your employment and your job title. You should also tell your former employer if you have more than one deferred benefit with them or if you still pay into the LGPS with them. They have to make separate decisions for each period of employment but the same independent registered medical practitioner can be used. If you have deferred benefits with other former employers (NYPF or other LGPS funds) you will have to apply to them separately to release your deferred benefits.
Referral and medical review
Under the LGPS regulations your former employer must consult with an independent registered medical practitioner (IRMP) to assess your case. To help the IRMP understand and assess your case, your former employer will provide details of your job description at the time you were employed with them. It is worth checking that your former employer still holds a copy of the job description and if they don’t, what they will provide instead.
If you are referred to your former employer’s Occupational Health team, they will provide details of your medical condition to your former employer to pass onto the IRMP. You will need to give your consent for your former employer to provide the information to the IRMP, you can also submit any additional medical information or issues that you think should be included in the referral. It is in your interest to help the IRMP fully understand your medical condition, we recommend you are fully involved in gathering information for your case.
The IRMP will receive the referral from your former employer. They will use their medical knowledge, the information provided by your employer and any information you have provided to decide whether you meet the LGPS ill health criteria. The IRMP does not have to see you in person and is allowed to carry out a paper review of your case. Remember, the IRMP is considering your case against the criteria that applies depending on your date of leaving.
If in the opinion of the IRMP you do not meet the LGPS ill health retirement criteria, your former employer will consider this when making their decision. The IRMP will write to your former employer with a medical certificate confirming their opinion.
Decision
On receipt of the medical certificate from the independent registered medical practitioner (IRMP) it is your employer that makes the final decision on whether or not to release your pension benefits on ill health grounds, taking into account the medical certificate and, for leavers after 1 April 2008, the cost of the ill health retirement.
If your former employer does not agree to payment of your deferred benefits on ill health grounds
You will be contacted by your former employer confirming their decision and the reasons for the decision. The benefits will remain deferred and as long as you have left the job your deferred benefits were given for; you can draw them from age 55 onwards although they will be reduced for early payment. You can also transfer your deferred benefits to another pension provider (as long as you have more than one year to your normal pension age).
You can apply to your former employer again for the early payment of your deferred benefits on ill health grounds if your condition gets worse or you suffer from a different illness which you think meets the criteria.
The Government has announced the earliest age that you can take your pension will increase from age 55 to 57 from 6 April 2028.
If your former employer agrees to payment of your deferred benefits on ill health grounds
You will be contacted directly by your former employer confirming their decision. The deferred benefits you built up in the scheme to the date you left, plus cost of living increases will be payable with no reduction applied for early payment. The date we start paying the deferred benefits from depends on when you left the scheme:
Left after 31 March 2014
Pension benefits are paid from the date your former employer makes the decision that you meet the criteria for ill health retirement.
Left between 1 April 2008 and 31 March 2014
Pension benefits are paid from the date certified by the IRMP that you first met the criteria for ill health retirement.
Left between 1 April 1998 and 31 March
Pension benefits are paid from the date you applied to your former employer for ill health retirement.
Left before 1 April 1998
Pension benefits are paid from the date certified by the IRMP that you first met the criteria for ill health retirement.
Appealing the decision
If you are unhappy with the decision made by your former employer you can use the Internal Dispute Resolution Procedure (IDRP) to appeal, see the guide and form.
Payment of pension benefits
The pension team will receive a copy of your former employer’s decision and the ill health certificate. Once all this information is received you will be sent a quote confirming the pension benefits payable together with an option form and retirement claim form. You will need to return the completed forms before payment can be made.
The pension team will tell you when your benefits will be paid. Lump sum payments (if applicable) are made every Friday and payment will be made on the first available Friday following receipt of all the relevant paperwork. Pension payments are made by BACs into your chosen bank account on the last working day of each month and are processed by the Employment Support Service at North Yorkshire Council. Due to payroll deadlines it is likely that your first pension payment will be made on the last working day of the month following receipt of all the relevant paperwork but payments will be backdated.