Protect your business from unexpected ill health early retirement payments.
Pension schemes can face large and unexpected costs when a member retires early because of ill health.
Our Ill Health Early Retirement Benefit is an insurance policy that is designed to help you de-risk, budget and plan for this unpredictable liability.
- Permanent ill health could affect any of your employees at any time
- Many schemes promise to pay a pension to members retiring early due to ill health
- The unexpected liability could place a financial strain on you or your pension scheme
- Could be as much as 10x an employee's salary and is ultimately payable by you
The impact on your scheme
- Unpredictable. Early retirement costs will vary depending on the person's age, salary and length of service
- Expensive. With a defined pension scheme:
- The pension will begin earlier than expected and so could be paid for longer
- There is usually no reduction in pension received for early payment
- The employee may be entitled to the future years of pensionable service
- A sudden additional liability could severely impact the stability of a scheme's funding and The Pensions Regulator could insist that you make an immediate extra contribution
With a defined contribution pension scheme, the whole cost of enhancing the member's pension will fall on you.
- Helps you to manage the extra cost caused by an employee retiring early due to ill health
- Offers the flexibility to choose the level of cover you need
- Includes purpose-built tools to make it easier to set up a policy
- Is suitable for pension schemes with at least 100 active members
- Does not limit the number of claims you can make in a year
- Has a clear claims process
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