Awarding ill-health benefits to deferred members
These pages are for employer use only. Member information can be found on the home page.
When considering an application for bringing deferred benefits into payment on the grounds of ill-health, the Independent Registered Medical Practitioner (IRMP), and yourself as the former employer, must consider the member’s capability of fulfilling the job description of the previous role to which their deferred benefit applies.
You may receive requests for a deferred ill-health pension from:
– Former employees
– Active employees who have opted out of the scheme
– Employees who are current members but also have a deferred pension
The referral process for a deferred member is similar to that of active members, however a deferred member can only receive unenhanced benefits – in other words payment of their deferred benefits only. Also, when considering an application from an employee who has left it is important you use the correct certificate according to when the member left the Scheme, the certificates to be used can be found below.
If the member making the request is still enrolled in the LGPS through an active employment, and/or holds a separate deferred benefit, each benefit will need to be dealt with separately. Each employer has to make their own decision about the relevant employment.
What are the criteria for awarding and Deferred member an Ill Health Pension?
The criteria for deferred pension being brought into payment on the grounds of ill-health are simpler than for an active member being dismissed on the grounds of ill-health and subsequently awarded a pension. As a deferred member can only be awarded unenhanced benefits there are no decisions to be made over which tier of pension to apply. Therefore, if the IRMP signs the certificate to say that the deferred member fulfills the medical requirements, then awarding the member their deferred benefits as a pension is a straight forward process.
The Fund has a list of approved IRMPs.
Implementing your decision to award ill-health benefits to deferred members – IRMP opinion and notice letter
If the IRMP provides an opinion that the member meets the conditions set out the LGPS regulations that the member is;
1) As a result of ill-health or infirmity of mind or body, permanently incapable of discharging efficiently the duties of the employment the member was engaged in and that the member;
2) As a result of ill-health or infirmity of mind or body, is not immediately capable of undertaking any gainful employment.
As the former employer, you decide whether to allow the former employee to access their deferred benefits through ill-health.
Don’t forget to ask for a narrative report from the IRMP. A narrative report is a report to explain to the employer how and why the IRMP has reached their medical opinion. As the decision to award an ill-health retirement rests with the employer, it is important to have a full understanding behind the IRMP’s recommendations to help make that decision.
The notice letter
You must inform the member of your decision both in cases of award of benefits or where benefits have not been awarded. Depending on the outcome of the decision the letter should inform the member of:
- your (as the employer) decision (whether an ill health benefit is to be awarded or not)
- inform the member that the employers decision has been made with reference to the IRMP’s opinion
- Explain the decision made in the context of the regulations
- if a decision of no award has been made, then the reasons of this decision should be included as to why the member has not met the conditions outlined in the regulations.
- information on how the member can appeal the decision must also be included, including the timescales for making an appeal. Contact details of the employer’s appointed person for appeals should also be provided.
Which regulations apply?
Different regulations will apply depending on the date the member left their relevant membership.
If a member had originally deferred their benefits prior to 1 April 2008, the rules in force at the time apply, and therefore they would only have to meet the criteria that they are permanently incapable of their job until Normal Pension Age. The reduced likelihood of gainful employment condition did not apply until introduced in the 2008 scheme.
There are different certificates for IRMP to complete depending on when the membership occurred and the date upon which the deferred member left your employment/scheme determines the certificate to be completed. These certificates are the same that you would use were you processing an active member.
The certificates to be used for each type of member can be found below.
What does the Pensions Team need in order to process an ill-health retirement for a deferred member?
- Copy of the relevant certificate completed by IMRP
- P45 (if available) – this should be sent in order for income tax deductions from the pension to be assessed.
- Job description of the role that the deferred member was employed in.
Certificates to use for Deferred Scheme Members
Please contact the Pensions Team if employers are unsure which certificate should be provided to the IRMP.