Protect your clients 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 your clients de-risk, budget and plan for this unpredictable liability.
- Permanent ill health could affect any of their 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 the employer or the pension scheme
- The liability could be as much as 10x an employee's salary and is ultimately payable by the employer
The impact on your clients' scheme
- Unpredictable. Early retirement costs will vary depending on the person's age, salary and length of service
- Expensive. With a defined benefit 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 on an immediate extra contribution by your client
With a defined contribution pension scheme, the whole cost of enhancing the member's pension will fall on your client.
- Helps your clients to manage the extra cost on their pension scheme caused by an employee retiring early due to ill health
- Offers the flexibility to choose the level of cover needed
- 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 that can be made in a year
- Has a clear claims process
Find out more
- Download our PDF file: Ill health early retirement benefit brochure PDF size: 400KB for a summary of how this policy could help
- Download our PDF file: Ill health early retirement benefit technical guide PDF size: 773KB for details on what we can and can’t cover and how we assess claims for payment