Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Ill-health early retirement definition

What does Ill-health early retirement mean? Ill‑health early retirement describes payment of occupational pension benefits before a member’s normal pension age/date on medical grounds, typically where ill health or disability makes the member permanently incapable of continuing their job. The expression is descriptive and used across pension and employment contexts. In practice, the controlling criteria are set by scheme rules and the tax framework. In the UK, early payment before the normal minimum pension age is only authorised for tax purposes where a registered medical practitioner certifies incapacity to carry on the member’s occupation and the member has ceased that work; separate rules apply to “serious ill‑health”...

Ill-health early retirement in UK registered occupational pension schemes: interpreting scheme rules, pre/post A‑Day tests, medical evidence, trustee/employer roles, Ombudsman case law and unauthorised payment risks

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE RELATES TO REGISTERED OCCUPATIONAL PENSION SCHEMES

A key feature of registered occupational pension schemes is their capacity to offer ill-health (often referred to as 'incapacity') benefits to members. These benefits are particularly significant where members are required to leave employment ahead of their normal pension date (NPD) as a result of serious illness...

This Practice Note considers the range of issues that may arise when construing the rules of a registered occupational pension scheme, including issues of interpretation and application, for the purpose of deciding whether ill-health benefits ought to be awarded to a member. For further detail on the considerations relevant to trustees of occupational pension schemes and/or employers who are required to make decisions in relation to members’ ill-health early retirement requests, see Practice Note: Ill-health early retirement—decision-making and exercise of discretion...

Nature of ill-health early retirement benefits

Ill-health early retirement benefits are calculated strictly in line with the scheme rules. Benefits provided by defined benefit occupational pension schemes are frequently—though not invariably—more generous in comparison with 'normal' early retirement benefits...

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Wyn Derbyshire

gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also...

Web page updated on 21/05/2026

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