Ill Health • Local Pensions Partnership Administration

Compulsory ill-health retirement and early payment of deferred pension on ill-health grounds

The arrangements for ill-health retirement under the 2015 Scheme are complex and the following can only be a general guide. There is a set order of procedure and before any decision can be made the Police Pension Authority must put specific questions to a duly qualified medical practitioner selected by them (the “Selected Medical Practitioner” (SMP). The SMP will consider your ability to:

Run, walk reasonable distances, and stand for reasonable periods;
Exercise reasonable physical force in restraint and retention in custody;
Sit for reasonable periods, to write, read, use the telephone and to use (or learn to use) IT;
Make decisions and report situations to others;
Evaluate information and to record details;
Understand, retain and explain facts and procedures.

In determining whether your condition is permanent (likely to continue until Normal Pension Age, (NPA) or death whichever is sooner) it will be assumed that you are receiving appropriate medical treatment for it. This does not include treatment that the Police Pension Authority decides is reasonable for you to refuse.

The SMP’s determination will be based on a medical examination (unless there are very exceptional circumstances). Even if you are assessed as permanently medically unfit for the performance of the ordinary duties of a member of the police force, it does not automatically mean that you will be retired on ill-health grounds. The Police Pension Authority will consider your specific medical condition and overall capabilities to see whether there are any alternative duties that you could undertake whilst remain a member of the police force.

There are two levels of ill-health retirement:

If you are permanently medically unfit for the ordinary duties of a member of the police force, you may be entitled to a lower tier ill-health pension.
If you are permanently medically unfit for the ordinary duties of a member of the police force and in addition you are permanently medically unfit for any regular employment, you may also be entitled to an enhanced upper tier ill-health pension. For this purpose ‘regular employment’ means employment for an annual average of at least 30 hours per week.

If, when you joined the police force or rejoined the 2015 Scheme after opting out, the Police Pension Authority determined (following medical examination) that you were ineligible for ill-health benefits, you cannot receive an ill-health pension if you are required to retire on ill-health grounds.

Referral to Selected Medical Practitioner (SMP)

When considering whether to retire you on grounds of ill-health, your Police Pension Authority must follow set procedures and will take all relevant information into account. As part of this process, the Police Pension Authority must refer the following questions to the SMP:

a) Whether you are medically unfit for the ordinary duties of a member of the police force;
b) Whether such medical unfitness is likely to be permanent;
c) Whether you are also medically unfit for engaging in any regular employment otherwise than as a member of the police force; and
d) Whether such medical unfitness is likely to be permanent.

The Police Pension Authority must also refer the appropriate questions to the SMP when considering whether to revise a benefit.

The questions put to the SMP are answered in the form of a report to the Police Pension Authority, which it will take into account in reaching its decision. You will be given a copy of the report.

Lower tier ill-health pension

If the SMP decides you are permanently medically unfit for the ordinary duties of a member of the police force, but not permanently medically unfit for any Regular employment, and there are no suitable alternative duties that you could undertake within the police force (taking into account both your medical condition(s) and capabilities), the Police Pension Authority will decide whether or not to retire you on those grounds.

If you are an Active Member and the Police Pension Authority decides to retire you, you will be entitled to a lower tier ill-health pension payable immediately if:

You have at least two years’ Qualifying Service and are permanently medically unfit for the ordinary duties of a member of the police force; or
regardless of whether you have 2 years’ Qualifying Service, if you are permanently medically unfit as a result of an injury received without your own default in the execution of duty; and
You are eligible for ill-health benefits.

A lower tier ill-health pension is calculated in the same way as a retirement pension payable at NPA, but without subtracting the early payment reduction. The amount of your accrued pension at the date of retirement is not enhanced. You will be able to commute part of your ill-health pension for a lump sum if you wish. You may also have other rights in the 1987 Scheme or the 2006 Scheme.

Example 1
A 45 year old member retires from the 2015 Scheme on grounds of lower tier ill-health after being found to be permanently medically unfit for the ordinary duties of a member of the force. S/he has an accrued pension of £15,000 per year at the point of retirement. Her/his accrued pension of £15,000 will be payable immediately without reduction.

At retirement, the member has the option to commute pension for lump sum at a rate of £12 of lump sum for every £1 of pension given up. The commutation lump sum cannot be larger than 25% of the value of the member’s pension.

Enhanced upper tier ill-health pension

If the SMP decides you are permanently medically unfit for the ordinary duties of a member of the police force and also permanently medically unfit for any regular employment, the Police Pension Authority will decide whether or not to retire you on the grounds of permanent medical unfitness.

If you are an Active Member and the Police Pension Authority decides to retire you, you will be entitled to an enhanced upper tier ill-health pension and a lower tier ill-health pension payable immediately if:

You have at least two years’ Qualifying Service and are permanently medically unfit for regular employment; or regardless of whether you have 2 years’ Qualifying Service, if you are permanently medically unfit as a result of an injury received without your own default in the execution of duty; and
You are eligible for ill-health benefits.

To compensate for the lost opportunity of working until NPA, an enhanced upper tier ill-health pension is payable, calculated as follows:

If your aggregate period of service (If you have service in the 2006 Scheme then it is a combination of the 2006 Scheme service and service in the 2015 Scheme otherwise it is just the period of service under the 2015 Scheme) is less than 5 years, your annual rate of an enhanced upper tier ill-health pension will be the lesser of:
(a) Total accrued earned pension x 3; or
(b) (Final Pay / 55.3) x (Assumed period of pensionable service to NPA / 2)

Please note that the assumed period of pensionable service to NPA is referred to as ‘prospective service’.

Example 2
A 25 year old Active Member with 3 years of service retires on grounds of enhanced upper tier ill-health after being found to be permanently medically unfit for any regular employment. S/he earns £23,000 per year and has an accrued pension of £1,200 per year. His/her prospective service is calculated as the difference between his/her NPA and his/her age at retirement (25). His/her enhanced upper tier pension will be the lesser of £1,200 x 3 = £3,600 (as per calculation (a) above) and (£23,000 / 55.3) x (60 – 25 / 2) = £7,278 (as per calculation (b) above).

His/her total pension payable immediately is therefore equal to £4,800 per year (= £1,200 + £3,600).

If your aggregate period of service (If you have service in the 2006 Scheme then it is a combination of the 2006 Scheme service and service in the 2015 Scheme otherwise it is just the period of service under the 2015 Scheme) is 5 years or more, the annual rate of your enhanced upper tier ill-health pension will be:

Final Pay Assumed period of pensionable service to NPA X 55.3/2

Example 3
A 35 year old Active Member with 7 years of service retires on grounds of enhanced upper tier ill-health after being found to be permanently medically unfit for any regular employment. S/he earns £35,000 per year and has an accrued pension of £5,000 per year. His/her prospective service is calculated as the difference between his/her NPA and his/her age at retirement (35). His/her enhanced upper tier pension will be (£35,000 / 55.3) x (60 – 35 / 2) = £7,911 per year.

His/her total pension payable at retirement is, therefore, equal to £12,911 per year (= £5,000 + £7,911).

If you serve or have served part-time whilst an Active Member, any enhancement will not be on a full-time basis but will be proportionately reduced to reflect that some or all of your service whilst an Active Member has been part-time.

Example 4
A 30 year old Active Member worked part-time (at 40% hours) for 3 years then worked full-time for a further 3 years. The member retires on grounds of enhanced upper tier ill-health after being disabled for any regular employment. S/he currently earns £30,000 per year and has an accrued pension of £2,400 per year.

His/her service which forms his/her built up pension is 4.2 years (3*40% + 3).

His/her aggregate period of service is 6 years (part-time service counts as full-time service for this purpose).

His/her prospective service is calculated as the difference between his/her NPA and his/her age at retirement (30), with proportionate reduction in line with the amount of his/her service that has been part-time over his/her career (4.2 years out of a potential 6 years’ service).

His/her enhanced upper tier pension will be (£30,000 / 55.3) x (60 – 30 / 2) x (4.2 / 6) = £5,696 per year.

His/her total pension payable at retirement is equal to £8,096 per year (= £2,400 + £5,696).

Reduction of ill-health pension due to your default

The whole of your ill-health pension may be reduced by up to a half if you substantially contributed to your medical unfitness by your own default.

Review of medical unfitness

A Police Pension Authority may in its discretion review your medical unfitness following ill-health retirement, in line with set procedures. It will be assumed that you have been receiving appropriate medical treatment for your condition (unless the Police Pension Authority considers it was reasonable for you not to have done so).

If you are receiving payment of a lower tier ill-health pension only and you have not reached NPA then the Police Pension Authority may periodically review whether your medical unfitness has ceased or significantly worsened. This review may be carried out at any time the Police Pension Authority chooses. If following such review the SMP determines that you have ceased to be medically unfit for performing the ordinary duties of a member of the police force then your ill-health pension will cease. Your Police Pension Authority may give you notice to rejoin the police force at a rank no lower than the one you held before your ill-health pension became payable. Your lower tier ill-health pension will then cease to be payable either on the last day of the 3 month period following notice to rejoin the police force or the day you rejoin the police force, whichever is sooner.

If you are receiving payment of a lower tier ill-health pension and your condition worsens within 5 years after the date you were retired on medical grounds, you may be reassessed (upon periodic review or upon notification to your Police Pension Authority that your condition has worsened) and become entitled to an enhanced upper tier ill-health pension if the SMP determines that you are permanently medically unfit for engaging in any regular employment.

If you have a progressive medical condition the 5 year limit will not apply. (These conditions are specified in the 2015 Regulations).

If you are receiving payment of a lower tier ill-health pension and an enhanced upper tier ill-health pension and you have not reached your SPA then the Police Pension Authority may periodically review whether your medical unfitness has ceased or significantly improved. These reviews may be carried out at intervals of no less than 5 years as determined by the Police Pension Authority.

If following such review the SMP determines that you have ceased to be medically unfit for engaging in regular employment then you will cease to be entitled to an enhanced upper tier ill-health pension. However, you will remain entitled to payment of a lower tier ill-health pension unless, upon review, the SMP also determines that you have ceased to be medically unfit for performing the ordinary duties of a member of the police force and your Police Pension Authority gives you notice to rejoin the police force. Where an SMP decides that your medical unfitness for performing the ordinary duties of a member of the police force would have ceased if you had received normal appropriate medical treatment, and if your failure to have such treatment is due to your own wilfulness or negligence, you will be warned that a continued wilful or negligent failure to have treatment may result in the termination of your ill-health pension.

If you are receiving payment of a Deferred Pension on grounds of ill-health and you have not reached your SPA then the Police Pension Authority may periodically review whether your medical unfitness has ceased. These reviews may be carried out at intervals of no less than 5 years as determined by the Police Pension Authority. If following such review the SMP determines that you have ceased to be medically unfit for engaging in regular employment then you will cease to be entitled to a Deferred Pension.

Refund of contributions

A refund of contributions is payable if you have less than two years’ Qualifying Service and you retire on grounds of permanent medical unfitness. The refund amount will not be less than your total pension contributions. The refund is taxable.

Early payment of deferred pension on grounds of ill-health

If you are a Deferred Member of this Scheme and you become permanently medically unfit for any regular employment, any Deferred Pension to which you are entitled will be paid to you with effect from the earlier of the date on which you asked your Police Pension Authority to refer the questions to the SMP or the date on which your Police Pension Authority referred those question on its own initiative. This will be without Actuarial Reduction.

Injury benefit

If, as a result of incurring an injury on duty, you are permanently medically unfit for performing the ordinary duties of a member of the police force, and you have left the service, you will be entitled to an injury benefit under the Police (Injury Benefit) Regulations. This benefit is separate from those provided under the 2015 Scheme.