Retiring early from Pensionable Service on medical grounds

If you cannot work due to ill-health, you may retire at any age with an immediate pension (paid without the application of early retirement factors), subject to certain conditions and with the consent of the Trustees and the Company. There are two levels of benefits payable, depending upon the severity of your illness.

• Chronic ill-health
  is defined as a physical or mental condition which, in the opinion of the Trustees, permanently prevents you from undertaking any regular work for the Company or any other employer.
  
  A pension for chronic ill-health is calculated on the following basis:
  A Scheme Pension will be calculated as shown in your Scheme booklet.
  
  plus either
  
  If you have completed less than 10 years Pensionable Service:
  50% of your prospective pension*
  
  or
  
  If you have completed 10 or more years Pensionable Service:
  66.67% of your prospective pension*
  
  
• Incapacity
  is defined as a physical or mental condition which, in the opinion of the Trustees, permanently prevents you from carrying out the primary duties of your normal occupation.
  
  A pension for incapacity ill-health is calculated on the following basis:
  A Scheme Pension will be calculated as shown in your Scheme booklet and will be reduced by an early retirement factor unless the Trustees and the Company agree otherwise.

*Your prospective pension will be based on the number of years from retirement to Normal Retirement Date, your Final Basic Salary at retirement and your prospective pension percentage as defined in the Rules based on 1.67% and will be adjusted by the Longevity
Adjustment Factor.


Notes
The Trustees have the power to reduce, suspend or terminate a chronic ill-health or incapacity pension if, in their opinion, this is justified by a subsequent change in your circumstances.  

If you are a member admitted on the basis of restricted terms, your pension payable on retirement due to chronic ill-health may be based on your pension earned to date only, with no account being taken of any prospective pension. If you are affected by restricted terms this will have already been notified to you. Your pension will be calculated as described above, except that it may be reduced for early payment by an amount agreed between the Trustees and the Company.

Any transferred-in benefits or AVCs will also be payable. AVCs can normally be taken as a tax free lump sum. Alternatively it will be converted into a Scheme pension using the Pension Rate applicable when you retire. Alternatively, you may purchase a pension (which is called an annuity) from an external provider eg an insurance company and the Trustees have appointed Hargreaves Lansdown to help you choose an appropriate annuity if you wish to consider this option. More information about this service can be downloaded below and you can click here to go to their website.Hargreaves Lansdown will help you to investigate if your state of health could lead to you benefiting from enhanced annuity terms.


Further details of the ill-health early retirement process can be obtained from your local HR or Occupational Health.

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Hargreaves Lansdown flyer

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28/02/2012

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