Ill health retirement
If you need to retire early due to your health, we're here to guide you through the process to access your pension early.
If you are permanently unable to work due to health problems, you might be able to take your pension early. This is known as an ‘ill-health’ pension.
Facing the possibility of stopping work due to your health can be difficult. To help with life after work, you can apply to take your pension early.
It can take time to approve ill-health pensions, often up to 6 months. Some cases are straightforward, but some are complex, and we might need independent medical advice. We will try and keep you informed as much as we can throughout the process.
What should I do if my health is affecting my work?
First, talk to your Archdeacon, Bishop, your diocese, or where relevant - your employer about your concerns. They will try and find ways of helping you continue your duties.
They will usually refer you to an occupational health adviser who will offer advice and guidance on how your condition can be managed.
If it is clear you cannot carry out your duties and your condition is likely to be permanent, contact us and apply for an ill-health pension.
Do I qualify for an ill-health pension?
To approve ill-health pensions, we need to assess whether you meet the definition of ‘incapacity’, set by General Synod. We do not have discretion over the definition.
The definition is ‘You have a medical condition that prevents you from performing the duties of your office, and this is likely to be permanent’.
How am I assessed against the definition of incapacity?
To assess you, we need to review:
- Relevant medical reports from your GP or medical specialist
- Your occupational health report
- Supporting evidence from your Bishop or Archdeacon
Gathering this information is the most time-consuming part of the process. You can help speed this part up by asking your GP to send us your reports as quickly as they can.
If your situation is not straightforward, we might need help from our independent medical advisers. They might need to talk to your GP or medical specialist, or they may need to meet you to carry out a short medical examination. They will only do this if they need more information to give their opinion. The examination should be local to you.
What if I cannot fill out my forms?
If you are unable to fill out your forms, someone can fill these out for you. The person needs to have a Lasting Power of Attorney for you.
When you return the forms, please remember to include a copy of the Power of Attorney.
What if there are medical fees?
If we need to ask your GP or medical specialist to send us medical reports or send us extra information on your condition, they may charge for this. We will pay all fees.
Will my health be reviewed?
In most cases, yes. We will contact you every 3 years to ask whether you are able to do any remunerated work. We might contact you more regularly, depending on the nature of your situation.
Once you reach “normal pension age” we will stop reviewing yourhealth. This is either age 65 or 68, depending on when you joined the pension scheme.
What if I can work again?
If your condition improves and you can work again, full-time or part-time, in any role, we will ask how much remuneration you are receiving. If your income (your pension plus any earnings) exceeds a limit, we will reduce your pension by 50p for every £1 you earn above this.
Once you get to age 65 or 68, we will stop reviewing your pension and if you work beyond this, we will not reduce your pension.
How do I pick a retirement date?
If we approve your ill-health pension, start discussing a retirement date with your Archdeacon, Bishop, Responsible Body or employer.
Your retirement date must be within 6 months of the date we approve your ill-health pension, otherwise you need to apply again.
We can extend this if you are waiting for retirement housing with the Pensions Board. Once we have confirmed your retirement, we will send you final pension and lump sum figures, plus a few extra forms.
STEP 1:
As soon as we learn about your need to retire due to your health, we'll send you an ill health retirement quote.
STEP 2:
Fill these out as soon as you can. If you tell us you might need housing support, our housing team will be in touch with you to start conversations.
STEP 3:
Send us as much medical evidence as you can, including any occupational report and GP or specialist reports.
STEP 4:
We'll contact your GP if we need more information, and then check you against the definition of incapacity.
STEP 5:
If we need to, we'll ask for an independent professional medical opinion, and we may need a further medical assessment.
STEP 6:
We will approve or decline your application.
What can I do with my pension?
If we approve your ill-health early retirement, we will offer you two options: 1. a pension for life with a tax-free lump sum 2. the option of giving up part of your pension and taking more tax-free lump sum
Pension for life, plus a tax-free lump sum We will pay you a pension for life. This gives you the security of knowing what your income will be each month and better still, we will increase this every year in line with inflation, up to a cap.
When you die, we will continue to pay two-thirds of your pension to your husband, wife or civil partner so you can be comfortable knowing they will also be covered.
More tax-free lump sum and reduced pension We can pay you more tax-free lump sum. This can help with moving costs or to put towards other plans for your retirement.
But, to get this you need to give up some of your pension, meaning your income in retirement will be less.
If you have paid Additional Voluntary Contributions (AVCs), you can use this towards your tax-free lump sum to save you giving up part of your pension.
You don’t have to keep your pension with us. Having more flexible ways to access your money can really help if you are in poor health. You might want to get more money up front and even leave money to your loved ones.
You can transfer your Clergy pension and take advantage of different ways of accessing your money.
A pension transfer means giving up your Clergy pension in return for a sum of money, which is called a ‘transfer value’. This could be a large amount of money.
If you are interested in one of these options, you need to speak to a financial adviser first to help you decide whether they are right for you.
Will my pension be enhanced?
Yes. As you are retiring earlier than you expected to, we will enhance your pension. The enhancement depends on how much service you have already completed, and how much service you could have completed if you remained in service until age 68.
The formula we use to work out your enhancement is: (A / T) x P
A = Completed service to the date of retirement
T = Total prospective service from the date of joining CEFPS to normal pension age
P = Prospective service from the date of retirement to normal pension age
Your ill health pension is not reduced for early retirement.
As an example, if someone had already completed 21 years service, and could have continued for another 10 years before reaching age 68 (giving a total prospective service of 31 years), then:
A = 21, T = 31, P = 10. Therefore, the additional enhanced service would be 6.77 years.
What if my ill-health is serious and my life expectancy is short?
If your life expectancy is less than 12 months, get in touch with us immediately. If medical evidence supports your short life expectancy we can pay the full value of your pension as a lump sum. This is called a “serious ill-health” pension.
If you are under age 75, we can pay the whole amount to you tax-free. We need to test this against your Lifetime Allowance. This is the limit on how much pension you can save during your working life before paying tax. If the value of your pension takes you over your Lifetime Allowance, the amount you exceed it by is taxed. If you are over age 75 the lump sum is taxed as income.
What can I do if my application is unsuccessful?
If your application does not meet the definition of incapacity, we cannot approve an ill-health pension.
If this happens, you can:
- send us further medical evidence to support your application
- appeal to us to review our decision - we have a process you can follow
- appeal to the Pensions Ombudsman to review our decision
If we do not approve your application and your health deteriorates, you can apply again.
Help with retirement housing
We understand retirement can pose housing challenges for Clergy, above and beyond those other pensioners may experience.
If you are worried about where you might live, or whether you can afford a retirement property, we might be able to help you with our Church retirement living offer.
We offer two types of housing: • Community living • Rental
If we approve your ill-health application, and you have at least 5 years stipendiary service, you are eligible for any of our housing options.
Community living We offer seven community living schemes spread around the country with the aim to enable you to live as independently as possible within a Christian community.
Rental We offer a wide range of retirement properties throughout England and Wales which you can rent for as long as you want. The rent is subsidised.
We offer a joint and sole agreements. We will take care of all repairs and maintenance which are a landlord’s responsibility, so you do not have to worry about doing these yourself or paying for it.
Other Housing Options Sometimes finding the right retirement home will mean looking at range of different options, not just within the Pensions Board but also with other providers.
Our team can help put you in touch with a range of other housing providers (including ones that specialise in home ownership), depending on your individual circumstances.
What should I do if I’m interested? Start talking to our Housing team as soon as you submit your application for ill health retirement. You can have an initial chat with us to kick start your housing plans. After this, we will come and meet with you face-to-face to fully understand your retirement plans and needs.