Ill health early retirement benefit

Designed to help companies de-risk, budget and plan ahead for the unpredictable liability of early retirement payments if a pension scheme member retires early due to permanent ill health.

A lump sum payment is made to the trustees of the pension scheme for each valid claim. The pension scheme trustees arrange for the ill health pension payments to be made to the member.

For policies of 100 active members or more

Who can be insured?

Employees who are active members of the pension scheme.
Employees must join the pension scheme as soon as they are eligible.

For cover, eligible employees can be grouped into separate categories and there can be different benefit basis between categories.

What’s the maximum amount covered?
  • £2 million or the strain cost to the pension scheme if that is lower.
  • The strain cost is the extra cost to the pension scheme as a result ofan employee who's covered retiring early due to ill health.
  • You can also partially cover the strain cost as an option.
How long does cover last for an employee that's covered?
  • Cover for a employee of the pension scheme ends when a payment has been made following a valid claim.
  • The benefit will usually end at the normal pension scheme age under the pension scheme rules. Alternatively, it can be age 65 or the state pension age.
  • If an employee is absent due to illness or injury, we’ll continue cover up to the benefit end date.
  • If an employee is absent for another reason, such as a sabbatical, we’ll continue cover for up to one year or when they return if sooner.

Make a claim

Please submit a claim within 90 days of deciding that an employee who's covered qualifies for early retirement due to ill health.

Contact us

Employer queries

0345 072 0751

Lines are open from 9am to 5pm Monday to Friday.

We may record and monitor calls.