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A guide to ill-health retirement (IHR)

Updated: Feb 27

If you are unable to work due to ill health, your employer will need to seek advice from an independent occupational health physician (OHP) as to whether to proceed with the ill health retirement process.


For you to be able to claim your workplace pension under the ill health retirement scheme your employer and the pension scheme will need to be satisfied that you are no longer capable of undertaking gainful employment* or undertake your job until your normal pension age.


*Gainful employment means at least 30 hour per week for a period of at least 1 year.


Employees are normally under the care of occupational health prior to the request for IHR assessment. However, if it has been a while since you have been seen by an occupational health clinician then you may be reviewed by the OHP first, prior to your case being passed to an OHP who has not been involved in your care.


The IHR assessment process is a paper exercise and will not require you to attend any form of assessment process, it involves the independent OHP reviewing all the relevant evidence including any previous clinical notes and reports written by the occupational health nurse or physician, along with any requested information from your GP or specialist consultant.


If the OHP feels that you satisfy the criteria for your workplace pension then OHP will then choose one of three options:


Tier 1 – in this case the OHP believes it is unlikely that you are capable of gainful employment before your normal pension age.


This will enable you to claim the pension you have already built up without any reduction for early payment, plus the pension you would have built up from the leaving date to your normal pension age.


It is payable for the rest of your life


Tier 2 - in this case the OHP believes it is unlikely that you are capable of gainful employment within 3 years of leaving, but you are likely to be capable of gainful employment before your normal pension age.


This will enable you to claim the pension you have already built up without any reduction for early payment, plus 25% of the pension you would have built up from the leaving date to your normal pension age.


It is payable for the rest of your life.


Tier 3 – in this case the OHP believes you are likely to be capable of gainful employment within three years of leaving, or before your normal pension age, if earlier.


This will enable you to claim the pension you have already built up without any reduction for early payment. The pension is paid temporarily and will stop if:

  • You pension has been paid for 3 years.

  • You start gainful employment.

  • You become capable of gainful employment.

You should ensure that you speak with your employers pension officer and/or your pension provider or a financial advisor about the specific benefits of the scheme in which you are enrolled as soon as reasonably practicable, and ideally prior to entering the IHR process.


Want to find out more about ill-health retirement? View our ill-health retirement webinar here.

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