If you have an employee who is in the LGPS and they become incapable of performing the duties of their current post due to ill health or infirmity, they may be eligible for a release of their pension benefits. Likewise, if you have an ex-employee who becomes incapable of performing the duties of a post they held with you while in the LGPS, they can also apply to you for release of their pension benefits on ill health grounds.

The decision following an application for ill health retirement rests with the employer, however, it is important that the employer follows the process correctly, to deal with applications efficiently and not to leave themselves liable for disputes arising from maladministration.

The 'employers guide to ill health retirement' attached to this page is designed to help safeguard the interests of the employee (or the ex-employee), and the employer. The document sets out the duties of the employer and will help you to avoid unnecessary delays and disputes.

Seriously ill employees

If you learn that one of your employees in the LGPS is seriously or terminally ill and life expectancy is limited, you should seek guidance from us as soon as possible.

The employment status at the date of death may greatly affect the amount of financial benefit the family or beneficiaries would receive. It may be more beneficial if the employee is in receipt of their pension when they die, therefore you may need to begin discussing ill health retirement.

With the consent of your employee, we can supply prospective quotes for the employer to ascertain which is more financially beneficial to the family; death in service, or death in receipt of their LGPS pension. 

Potential impact of taking no action

Inactivity or delay on the part of the employer at this crucial time can have a significant impact on your employee or their family or beneficiary. It's important that your employee is aware that they have a key decision to make about their pension. Where an employer does not support their employee in providing information about their pension options, an appeal against an employer's inaction may be considered as maladministration.

Links to useful documents

Document about Employers guide to ill health retirement - PDF Employers guide to ill health retirement (274KB)

Derbyshire Pension Fund's employer guide to ill health retirement.