Ill health retirement and your pension for transitional members

This guidance addresses the main queries concerning ill health retirement for members of the 2015 NHS pension scheme who also have membership in the 1995 or 2008 sections of the scheme.
Location: UK
Audience: SAS doctors Consultants GPs
Updated: Tuesday 31 March 2020
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Retiring from the 2015 scheme with 1995/2008 benefits

If you are unable, through illness, to work in your present job and your condition is permanent (up until your state pension age), you may be able to retire early and take your pension benefits without actuarial reduction. This is known as a tier 1/lower tier award.

If, in addition to the above, you are unable to do any regular employment of a similar duration to your current duties you may be able to retire early and take your pension benefits without actuarial reduction and with an enhancement. This is known as a tier 2/upper tier award.

Your accrued 1995/2008 section benefits will be payable based on final salary linking/current dynamising factors (unless you have had a break in pensionable service of five years or more).

You will also receive the accrued value of your 2015 scheme benefits if you qualify as tier 1/lower tier.

You will receive the accrued value of your 2015 scheme benefits plus an enhancement based on 50% of your prospective service to your state pension age (tier 2/upper tier).

 

1995/2008 benefits and tier 2/upper tier

Your benefits won’t be enhanced if you qualify for tier 2.

Your previous benefits will be payable based on the service (for officers) or pay (for practitioners) built up prior to moving to the 2015 scheme.

If you have not had a break in service of 5 years or more:

  • any officer benefits will continue to be linked to your salary up to retirement
  • any practitioner benefits will be dynamised up to retirement.

If you have had a break in service of 5 years or more:

  • any officer benefits will be based on the pay you received leading up to the break
  • any practitioner benefits will be dynamised up to the break.

Any tier 2/upper tier enhancement applies only in relation to the benefits accrued in the 2015 scheme.

 

Less than two years in the 2015 scheme

You will still qualify for ill health retirement.

So long as you have at least two calendar years membership in total between both your previous scheme and the 2015 scheme, you can apply to retire on health grounds.

The following conditions also need to be met:

  • you retire from pensionable employment due to illness or injury
  • you are permanently (up to your state pension age) incapable of efficiently carrying out the duties of your employment because of illness or injury - tier 1/lower tier pension
  • you are additionally permanently (up to your state pension age) incapable of engaging in regular employment of like duration to your current duties because of the illness or injury - tier 2/upper tier pension
  • you are under your state pension age.

 

Tier 2/upper tier ill health enhancement

Your accrued 2015 service will receive a membership enhancement of 50% of your prospective membership to your state pension age. For example, if your state pension age is 67 and you are now aged 47, and you are granted tier 2/upper tier ill health retirement you will receive a 10 years enhancement to your 2015 benefit accrual.

To allow for any part-time working you may have had the enhancement will apply as follows: accrued 2015 pension x (calendar length service in the 2015 scheme + enhancement of 50% of your prospective service to state pension age).

 

Added years payment

If you are an active 2015 scheme member who has terminated an added years contract (to age 60) in advance of your application for ill heath retirement, you will be credited with the amount of added years purchased at termination of the contract.

This will not be actuarially reduced. The position will be the same if you have had a break of 12 months or more resulting in your contract terminating.

Read more about this in our ill health retirement guidance

 

Additional pension purchase

On ill health retirement you will be credited with your full intended purchase if:

  • you have been contributing to the contract for more than 12 months
  • have not had a break in pensionable service of 12 months or more between last being a member of the 1995/2008 section and first joining the 2015 scheme.

If you have had a break of 12 months or more between leaving the 1995/2008 section and joining the 2015 scheme, the additional pension contract cannot continue on joining the 2015 scheme.

The benefits of that contract will be paid based on the amount of the purchase that had completed prior to the break.

If the contract has been in place for less than 12 months, you will receive a refund of the contributions paid.

 

Leaving the 2015 scheme and in NHS employment

You will be required to meet tier 1/lower tier criteria in order to receive the payment of your accrued 2015 scheme benefits as well as your accrued 1995/2008 section benefits.

 

Leaving the 2015 and 1995/2018 pension schemes

You will be required to meet tier 2/upper tier criteria in order to receive the payment of your accrued 2015 scheme benefits as well as your accrued 1995/2008 section benefits.

 

Rejoining the 2015 scheme following tier 1/lower tier ill health retirement

If your previous benefits were accrued in the 1995 section, you will not be able to rejoin the 2015 scheme.

The exception to this is if you retired on tier 1/lower tier health grounds and return to NHS employment before age 50.

If your previous benefits were accrued in the 2008 section, you will be able to rejoin the 2015 scheme provided you are under age 75 and have not accrued 45 calendar years' service.

 

Rejoining the 2015 scheme following tier 2/upper tier ill health retirement

Rejoining the 2015 scheme is not possible following tier 2/upper tier ill health retirement.

The exception to this is that your tier 2/upper tier ill health pension is replaced by a tier 1/lower tier ill health pension. This will only be the case if your previous benefits were held in the 2008 section.