Ill health early retirement benefit

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.

  1. The issue

    • 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.

  2. 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.

  3. Our solution

    • Helps you to manage the extra cost caused by a member 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.

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 you.

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.