Ill-health retirement for deferred members

You may be asked by a former member if you'll pay their deferred benefits before normal pension age, if they can't work because of ill-health. For an application to be approved, the former member must be permanently incapable of doing the job they were in when they left the LGPS and were given their deferred benefits.

If the former member contacts you, you must ask an independent occupational health physician to give an opinion before you can decide whether to approve the application. Unlike for active members there are no enhancements available. This means you don’t need to decide which tier of benefits apply. You can only award payment of deferred benefits.

The same rules also apply to an active member who has opted out of the scheme or holds deferred pension benefits. If a member has more than one deferred benefit, they need to be dealt with separately.

For more information, read our ill-health frequently asked questions.

Getting the opinion of an independent registered medical practitioner (IRMP)

Getting the opinion of an independent registered medical practitioner (IRMP)

To decide if ill-health benefits should be awarded, you must get the opinion of an IRMP. The IRMP must be registered with the General Medical Council and have a qualification in occupational health.

The IRMP will base their opinion on the medical information given to them by the member’s treating professional. The member will give this information to you, to make sure you get as information much as possible.

When preparing the referral to the IRMP, you should make sure you:

Have explained the ill-health process and passed on the member guide
Have collected all relevant medical information and had consent to pass it on
Are clear about the duties of the former job in the referral information
Provide a certificate

When sending the IRMP a certificate to complete, make sure you send the right one. There are different certificates depending on when the member left the scheme.

Don’t forget to ask the IRMP for a narrative report. This will describe how they've reached their opinion. This will help when you make your decision.

We have a list of approved IRMPs you can choose from. Please contact us for a copy of this list. If you use either Shropshire Council or Telford & Wrekin Council for your occupational health services, you can also ask them for a copy.

Making the final decision

Making the final decision

You should consider the opinion of the IRMP, but you must make your own decision. It's important you're able to give reasons for your decision.

If you decide the member doesn't meet the ill-health rules, their benefits will stay deferred.

The notice letter

You must let the member know if you're awarding benefits or not. In either case, you should tell the member:

Of your decision
How you reached the decision
How the employee meets or doesn't meet the rules under the regulations
How you have referred to the IRMPs opinion
Information on how the member can appeal the decision. This should include the timescales of appeal and contact information

Which regulations apply?

Different rules apply depending on when the former member left their job. This is because of changes to the LGPS regulations over the years.

If the member left before 2008, they fall under earlier regulations. This means they only need to show they’re permanently incapable of carrying out the job the benefits relate to, until normal pension age.

If the member left after 2008, they must also show there’s a reduced likelihood of gainful employment, because of their ill-health.

What do we need to process an ill-health retirement?

So we can process an ill-health retirement, please send us:

The job description of the member’s former role
Copy of the IRMPs certificate
P45 (if available). This should be sent for income tax deductions from the pension to be assessed

If an employer decides that their employee meets the criteria to award them early payment of deferred benefits due to ill health, what date should be used as the date from which the deferred benefits will be brought into payment?

This will depend on the which scheme years the member falls into and on the ill health certificate chosen:

2014 Scheme

Regulation 32(10) of the LGPS Regulations 2013 states “Where a member is entitled to early payment of pension due to ill-health under regulation 38 (early payment of retirement pension on ill-health grounds: deferred and deferred pensioner members), the first period for which retirement pension is payable begins on the date of the determination that the member is permanently incapable under that regulation.”

2008 Scheme

Regulation 50(4) of the LGPS Administration Regulations 2008 states “The first period for which any retirement pension under regulation 31 (early payment of pension: ill-health) of the Benefits Regulations is payable begins on the date when the member became permanently incapable as determined under regulation 31 of those Regulations.”

1998 Scheme

Regulation 31(6) of the LGPS Regulations 1997 states “If a member who has left a local government employment before he is entitled to the immediate payment of retirement benefits (apart from this regulation) becomes permanently incapable of discharging efficiently the duties of that employment because of ill-health or infirmity of mind or body he may elect to receive payment of the retirement benefits immediately, whatever his age.”

Regulation 93(2) of the LGPS Regulations 1997 states “The first period for which any retirement pension under regulation 31 is payable begins in a case where he elects under paragraph of that regulation, with the day on which he elects.”

1995 and earlier schemes

Regulation D11(2)(b) states for the purposes of paragraph (1) "the appropriate date", in relation to any person, is his 65th birthday or, if earlier, the earliest of the following (b) any date on which he becomes permanently incapable, by reason of ill-health or infirmity of mind or body, of discharging efficiently the duties of the employment he has ceased to hold.

Regulation D11(1) states If a member who ceases to hold a local government employment… becomes entitled in relation to that employment to a standard retirement pension and a standard retirement grant payable from the appropriate date.

Shropshire County Pension Fund

Important information:

Best wishes for the festive season