Ill Health Early Retirement Process

 

The process

 

If you're suffering from ill health you may be able to take your retirement savings through 'ill health retirement'. If you're under the normal retirement age of the Telefónica Pension Plan and suffering from ill health you may be able to retire sooner on the basis of 'ill health early retirement'. We can also consider requests to retire on the grounds of 'serious ill-health retirement' where life expectancy may be less than one year. In these circumstances a lump sum may be payable instead of your retirement benefits. 

 

This page explains the process you would need to follow to request a form of ill health retirement. Please note, due to the complexity of these cases the process can be lengthy with some cases taking a reasonable period of time to reach a conclusion. We will work as quickly as possible to reach a final decision. If you're a current employee then please speak with your line manager before making any application for ill health retirement.

 

To be considered for a form of ill health retirement both HMRC and the Company need to make sure you meet the associated ill health definition:

 

  1. Where you’re suffering a physical or mental impairment where a registered medical practitioner is of the opinion that you’re incapable of carrying on any form work.
  2. Evidence you have ceased to carry on your occupation (or about to cease your occupation).

 

To help us understand whether you meet the above criteria we often require an up-to-date Occupational Health (OH) report. We can support you in obtaining one of these reports by referring you to our Occupational Health team. If you already have a recent copy of an Occupational Health report from your previous employer you may not need to complete another report.

 

Once all of the appropriate evidence has been collated it will be reviewed by the Employer. It will be the Employer's decision as to whether they will consent for you to retire on the ground of 'ill health'. Any approval will then be passed to your administrators (Standard Life for Defined Contribution (DC) and LCP for Defined Benefit (DB)). Your administrator will then be able to provide you with the associated information whilst explaining the different options available.

 

What is the tax treatment under 'ill health retirement'?

 

If you're granted 'ill health retirement' no additional contributions can be made to your Telefónica Pension Plan. You will also not receive any Defined Benefit (DB) accrual (since you will have no DB benefits before or after retirement). In this instance there would be no special treatment in relation to the annual tax allowance or Lifetime allowance.

 

Under Serious ill health retirement you may be able to take your whole Defined Contribution pension pot tax free if all of the following apply to you:

 

  • You’re expected to live for less than a year because of serious illness.
  • You’re under 75 (if you’re over 75 you pay Income Tax on the lump sum).
  • You don’t have more than the lifetime allowance of £1 million in pension money. 

 

Neither the Pensions Team nor our administrators are able to give you any individual tax advice so please seek individual tax advice if you wished to discuss your specific circumstances. The administrators will, however, be able to provide you with an overview of the different options available. You may also wish to update your Expression of Wish form. Please click here  to dowload a form.

 

Who can I contact for more information?

 

For any questions relating to the ill health early retirement process, to find out more on the potential options that may be available or to find out how to submit a request please select the below links. Alternatively, you can contact our administrators Standard Life or LCP, see the Contact us page for more details.  

 

The process - an overview

 

The process - a more detailed overview of our Occupational Health process