IHERB

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.

The issue

• 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.

Our solution

• 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  for a summary of how this policy could help
• Download our  for details on what we can and can’t cover and how we assess claims for payment