Ill-health retirement for active members
These pages are for employer use only. Member information can be found on the home page.
An employee will be able to take immediate payment of their benefits, no matter what their age, if they are dismissed on the grounds of ill-health. They must have two years qualifying period, and meet the following conditions.
- The member is, 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
- The member, as a result of ill-health or infirmity of mind or body, is not immediately capable of undertaking any gainful employment
Seeking the opinion of an Independent Registered Medical Practitioner (IRMP)
Before deciding whether to award an ill-health retirement, 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 cannot previously have been involved in the case for which the certificate is being requested.
The IRMP will base their opinion on the medical information supplied to them by the employee’s treating professional. The employee will provide this information to you, so make sure you get as much as possible.
You will need to send the IRMP a certificate to complete.
You should also ask the IRMP for a narrative report. This will explain how and why they come to their decision and will help when you make your decision.
Please contact us for the most recent list of the approved IRMPs. If you use either Shropshire Council or Telford & Wrekin for your Occupational Health services, contact them to request a copy.
Preparing a referral to an IRMP
When preparing the referral to the IRMP you should ensure you:
- Have met with the employee to explain the ill-health process and passed on the employee guide
- Have collected all relevant medical information from them and got consent to pass it on
- Are clear about the duties of the job in the referral information i.e. the employee may be expected to lift heavy items but their back problem is preventing them from doing so
- Should detail any adjustments made to help the employee manage their ill-health
- Should consider whether there are any other questions you would like a medical opinion on?
- Should ensure the certificate is provided
If you use either Shropshire Council or Telford & Wrekin for your Occupational Health services, please make sure they have clear instructions, and are aware if the member is active or deferred.
Making the final decision
You are responsible for deciding if the employee should be terminated on the grounds of ill-health. You also have to decide which Tier should be awarded.
You can take into account the opinion of the IRMP, but you should make your own decision. It is important that you are able to give reasons for your decision.
Tiers that can be awarded
There are three tiers of benefits that you can award to an employee. These are explained in more detail below.
Please note that under the 2014 regulations ‘gainful employment’ means paid employment for no less than 30 hours in each week for a period of no less than 12 months.
Tier 1 –
You should award tier 1 benefits if the employee is unlikely to be capable of undertaking gainful employment before reaching their normal pension age.
The employee’s service will be enhanced as if they worked up to their normal pension age.
Tier 2 –
You should award tier 2 benefits if the employee is unlikely to be capable of undertaking any gainful employment within three years of leaving the employment. But, it is likely that the employee will be able to undertake gainful employment before reaching their normal pension age.
The employee’s service will be enhanced by 25% of their membership to their normal pension age.
Tier 3 –
You should award tier 3 benefits if the employee is likely to be capable of undertaking gainful employment within three years of leaving the employment, or before their normal pension age, if earlier.
The employee will receive the benefits they have built up, up to the date of termination. There will be no enhancement on the benefits.
The benefits will be payable for a maximum of three years, or until the employee is in gainful employment. There will be a review after 18 months where you should write to the employee to see what their employment status is.
If you decide that gainful employment has been found, payments should cease. If gainful employment has not been found, a re-assessment from the IRMP is required. You then have to decide whether to carry on the tier 3 payments for the remainder of the three years, or you may decide that a tier 2 benefit should be awarded.
Please let us know the outcome of the 18 month review. If you are told about the employee finding gainful employment before the 18 months, please let us know so that we can cease payment and defer the benefits.
The notice letter for the employee
You must inform the employee whether you are awarding benefits or not.
In both instances, you should inform the employee:
- Of your decision
- How you come to the decision
- How the employee meets/does not meet the criteria under the regulations
- How you made reference to the IRMPs opinion
- Information on how the member can appeal the decision, including the timescales and contact information
If benefits are being awarded, you should also tell the employee:
- The tier of ill-health benefit being awarded
- If tier 3 benefits have been awarded, that there will be a review at 18 months
Some frequently asked questions on the Ill-Health Process can be found by clicking on Ill-health FAQs.
Transitional protection from the 1997 scheme
An employee may have protections for their tier 1 or 2 benefits if:
- They were in the LGPS and had reached age 45 before 1 April 2008
- They are later awarded an ill-health retirement
- They are entitled to the membership enhancement that would have been given under the 1997 regulations, if the pension benefits were greater than that granted under the 2014 regulations
The enhancement would still be treated as post-2008 scheme membership, so they will receive 1/60ths pension and no automatic lump sum.
What do we need in order to process an ill-health retirement?
So that we can process an ill-health retirement, please can you send us the following:
- A completed PEN007B leavers form
- Copy of the IRMPs certificate
- Copy of the notice letter
- P45 (if available) – this should be sent in order for income tax deductions from the pension to be assessed.
You can view our ill-health presentation from 2015 at :