Example of ill health retirement

Example 1

Lisa is about to be retired on ill health. She is aged 45, so has 22 years left to her Normal Pension Age (age 67).

There is NO prospect for her of gainful employment before Normal Pension Age.

She is therefore being retired under Tier 1 conditions.

Her benefits will be based on any membership prior to 1 April 2014 plus the value in her pension account with an enhancement to replace the pension she would have built up by age 65.

Example 2

Donna is about to be retired on ill health. She is aged 45, so has 22 years left to age 67.

There is NO prospect for her of gainful employment in the short term, but there IS a prospect of gainful employment before age 67.

She is therefore being retired under Tier 2 conditions.

In this case her enhancement is 25% of the membership she would have built up by age 67.

Current membership: 20 years

Membership she would have built up to age 67 had she continued working x 25%: 5.5 years