RPSM08400060 - Employer Pages: Pension Age: What happens if the employee is suffering from ill-health?

What happens if the employee is suffering from ill-health?

If a member is suffering from ill-health and has had to give up work as a result, your scheme rules may allow them to take their benefits immediately despite their age. There are two ways in which benefits may be paid.

If the scheme administrator receives evidence from a registered medical practitioner and is satisfied that the member is (and will continue to be) incapable of carrying on their occupation either through mental or physical illness, HMRC legislation allows a lump sum and pension to be paid on ill-health grounds For further details see RPSM08200070 (Member Pages, I am suffering from ill health)

If the scheme administrator receives evidence from a registered medical practitioner that the member is suffering from serious ill-health, the scheme rules may allow the member to commute their pension fund into a lump sum. The term “serious ill-health” means that the member’s expectation of life is less than one year. For further details see RPSM09300110.

Once the relevant medical evidence has been obtained and the benefit entitlement has been agreed, the scheme administrator may proceed to pay the benefits in accordance with the scheme rules.