nuvos ill-health retirement pension benefits - The Civil Service

nuvos ill-health retirement pension benefitsA brief guide to the benefits available

This booklet tells you about the pensionbenefits that we may pay if you areeligible for ill health retirement.It does not cover every aspect. The fulldetails are contained only in the rules,which are the legal basis of the scheme.Nothing in this booklet can override therules. In the event of any difference, therules will apply.Who are ‘we’?This booklet is produced by CabinetOffice, which manages the scheme.However, pension records are held byyour MyCSP Pension Service Centre onbehalf of organisations that operate CivilService pensions, and not by CabinetOffice. Your MyCSP Pension ServiceCentre will work out the amount ofpension if you retire because of illhealth. However, they do not decidewhether or not you are eligible for illhealth retirement; this is decided by youremployer on the adviceof the schememedical adviser. If you would like moreinformation after you have read thisbooklet, please contact your employerin the first instance.Contact details for your MyCSP PensionService Centre can be found on thewebsite:www.civilservice.gov.uk/pensionsNote: Where we have had to use technical terms, weshow them in bold and explain them at the back of thebooklet.2

Qualifying conditions and applying for anill health pensionWhat are the qualifyingconditions?You usually need to have worked foran employer that offers Civil Servicepensions (CSP) for at least two yearsbefore you can qualify for an ill healthpension. However, you may qualify ifyou transferred benefits in from anotheroccupational pension scheme or havean earlier period of service with a CSPemployer.You must have suffered a permanentbreakdown in health involving incapacityfor employment. In this context‘permanent’ means until you reachpension age.There are two levels (tiers) of pensiondepending on the degree of yourincapacity to work.Lower tierTo qualify for a lower tier pension youmust, in the opinion of the schememedical adviser, be permanentlyincapable of doing your own or acomparable job.Upper tierTo qualify for an upper tier pensionyou must, in the opinion of the schememedical adviser, be permanentlyincapable of any gainful employment.How do I apply for an ill healthpension?Either you or your employer can startthe application process for ill healthretirement, but your employer mustfirst investigate whether there are otheroptions which will enable you to carryon working. If you wish to apply for illhealth retirement, you must ask youremployer who will, in turn, ask you tocomplete a form. The form will askyou to give permission for the schememedical adviser to contact your doctorand any other medical specialists whohave been involved in your care.Your employer will pass the form on tothe scheme medical adviser along withinformation about your job, the detailsthey hold about your ill health andyour sickness absence record. For moreinformation about the assessment3

procedures please see the ‘Ill HealthRetirement Guide for Members’ on thewebsite:www.civilservice.gov.uk/pensionsunder publications.Can I appeal against the medicaladviser’s decision?Yes, you can appeal but there aretime limits. Ask your employer or yourMyCSP Pension Service Centre forinformation about the appeal process.You will normally need new medicalevidence to support your appeal.4If ill health retirementis grantedThe scheme medical adviser will send acertificate to your employer, confirmingthat you have met the conditions forill health retirement. The certificate willalso recommend which tier applies. Youremployer will then set the retirementdate, including any period of notice.The date can not be before the datethe scheme medical adviser issues thecertificate.Your MyCSP Pension Service Centrewill send you an estimate to show thelevel of pension benefits you can expectto get. They will also ask you to fill in aPersonal Details Form so that they cancheck that the information on yourpension record is correct. Your MyCSPPension Service Centre will not be ableto give authorisation to the pensionpayroll provider to pay your pensionuntil you have returned the PersonalDetails Form. You should note that HMRevenue & Customs require your nuvospension to be tested against the LifetimeAllowance before it is paid. your MyCSPPension Service Centre will thereforealso ask if your total pension income,

including any other pensions, may beabove £50,000 a year. There is moreinformation on this in the booklet “Yourpension and tax” which you can get fromyour MyCSP Pension Service Centre.Alternatively,you can find the booklet onthe website:www.civilservice.gov.uk/pensionsYour pension will consist of:• the total pension you have built up todate plus all the rises in line with thecost of living• any added pension you have bought,provided that you did not opt to buyit shortly before you are retired• any nuvos pension have bought bytransferring benefits from anotherpension arrangement, unless you areretired within two years of bringingin the transfer and we consider thatyou did not disclose a known healthcondition at that time• any nuvos pension you have boughtby a Club transfer. The value of thetransfer will be reduced if the schemewhich you transferred it from had apension age below 65• any linked pension you havetransferred from an earlier periodof service with an organisation thatoperates Civil Service pensions.(If the linked pension is from one ofthe Civil Service final salary schemes,it will be reduced to reflect the factthat it was based on a pension ageof 60.)Do I get a tax-free lump sum?You can choose to give up some of yourpension in return for a cash lump sum.This will be tax free, subject to limits setby HM Revenue and Customs. You willbe able to see the maximum lump sumyou can take on your pension estimate.You do not have to take the maximum.To help you work out how much youwould like to take, use the lump sumcalculator on the Civil Service website:www.civilservice.gov.uk/pensionsYou need to remember that you willhave to give up £1 of your pension foreach £12 of lump sum you want to take.5

When will I get my first payment?If you choose to have a lump sum, thepensions payroll provider will send it tothe bank or building society account youput on your Personal Details Form. Thepensions payroll provider will pay yourlump sum as quickly as possible, althoughno particular date can be promised. Itwill normally be paid within a few days ofyour leaving date if the pension payrollprovider has received the informationin good time. You should complete andreturn your Personal Details Form andany other information promptly.Pensions are normally paid monthly inarrears (at the end of the period in whichthey are due). Your pension paymentswill be made by direct credit to youraccount. This ensures that your bankaccount is credited on the day eachpayment is due.For more information on how the pensionis paid and to find details of the pensionspayroll provider, see Appendix A.What if I am too ill ever to workagain?If you meet the criteria for an upper tierpension your MyCSP Pension ServiceCentre will, in most cases, enhance(increase) your pension as if you hadcontinued to work to 65. They willwork out the enhancement by dividingyour pension by the number of yearsyou were contributing to nuvos, andmultiplying that amount by the numberof years from your date of retirementto your 65th birthday. However, yourpension cannot be more than 75% ofyour pensionable earnings, which maylimit the amount of enhancement youreceive.ExampleGerard has to retire on ill health termsat the age of 55 after 20 years in nuvos.His pension at that point is £7,500 a year.The scheme medical adviser confirmsthat Gerard is unlikely to be able to workagain, so his pension is enhanced by£3,750 (£7,500/20 x 10), giving him a totalnuvos pension of £11,250 a year.6

Do my dependants get anenhanced pension?Your dependants’ pensions will beworked out in the normal way, so ifyou receive an upper tier pension, anypensions for your dependants followingyour death will be worked out byreference to your enhanced pension.However, the amount of enhancementmay be limited so that the pensions foryour dependants would not be greaterthan those which would have beenpayable if you had died in service. Thereis more information about dependants’pensions in the booklet ‘nuvos retirementbenefits’ which you can get from ourwebsite.What if I become too ill to workafter I have already drawn part ofmy pension on partial retirementterms?If you have already drawn part of yourpension on partial retirement terms youmay be retired on ill health terms butyou will receive only a lower tier ill healthpension, even if you meet the criteria foran upper tier pension.Are there special arrangements ifI am terminally ill?If you are terminally ill, with a medicallyassessed life expectancy of less than 12months, you can apply to exchange yourpension benefits for a lump sum, to bepaid immediately. The lump sum will befive times your pension. This will notaffect how any dependants’ pensions areworked out. However, you should thinkcarefully before choosing to exchangeyour pension for a lump sum on thesespecial terms, and you may wish to takefinancial advice. The total amount ofpension and lump sum available to youand your dependants may be higher ifyou do not opt for these special terms.You should note that if you are are-employed pensioner or on partialretirement, the lump sum will notinclude any pension already in payment.What if I die shortly after illhealth retirement?If you die within five years of starting totake your pension, and have not optedto exchange your pension for a lumpsum under the special terms for terminal7

ill health as described above, the schemewill pay a lump sum representing thebalance of five years’ pension (includingany added pension you had bought) tothe person or people you have named.ExampleGerard has been diagnosed as terminallyill, so he can apply to take a lump sum of£56,250 (5x 11,250) instead of his pension.He opts to take his pension in the usualway and chooses to take the maximumamount of tax free cash, £48,214. Thisleaves him with an annual pension of£7,232.When he dies 6 months later theamount of death benefit lump sumworks out as £32,544 (5 years’ pension of£7,232 per year less 6 months’ pensiontaken).I have a provisional pensionaward. What does this mean?If the scheme medical adviser is unableto decide whether or not the nature ofyour incapacity meets the criteria for apension, they may make a provisionalaward at whichever tier is the mostappropriate to your condition at thetime. If your award is provisional, thescheme medical adviser will also statewhen they will review it. This can beany time up to five years from theaward decision. At the time of review,the scheme medical adviser will eitherconfirm the original award or changeit. If the scheme medical adviserrecommends your pension should bereduced or removed, the pensionspayroll provider will give you threemonths’ notice before they changeyour pension payments. If the schememedical adviser recommends anincrease in your pension, the pensionspayroll provider will backdate theincreased payments to the date of thereview.Can I appeal against the schememedical adviser’s decision toreduce a provisional pension orupper tier pension?Yes, you may do so; though note thatthere are time limits. You should askthe pensions payroll provider forinformation about the appeal process.You will normally need new medicalevidence to support your appeal.8

Does my pension carry onfor life?If your pension is lower tier and is notprovisional, it will continue for the restof your life.If you receive an upper tier pension thescheme medical adviser will reviewyour case every five years or any timeup to five years as they recommend.This is called a periodical review. If yourcondition improves so that you nolonger meet the conditions for an uppertier pension, we will reduce your pensionto the lower tier. The pensions payrollprovider will give you three months’notice before they reduce your pension.Your pension will not be reduced belowthe lower tier rate even if you makea complete recovery. We will stopreviewing your pension once you reachpension age.we do not expect you to be fit to bere-employed.If you are re-employed by anorganisation offering the Civil Servicepension arrangements, your pensionwill be abated (reduced) if your annualrate of pensionable earnings and yourpension together come to more thanyour pensionable earnings in the twelvemonths immediately before yourpension came into payment.Further informationYou can find out more informationabout nuvos on our website,www.civilservice.gov.uk/pensionsIf you do not have access to the website,or cannot find what you need to know,you should contact your MyCSP PensionService Centre or, after your retirement,the pensions payroll provider.What if I am re-employed?If you are receiving a lower tierpension, you may be able to rejoin theCivil Service pension arrangements,depending on the rules in force at thetime. If your pension is at the higher rate,9

Technical termsAdded pension is an amount of extrapension that you can buy.Club transfer is a transfer from anotherpension scheme in the Public SectorTransfer Club, such as the NHS PensionScheme.Comparable job means another job inyour grade or pay band, which may bedifferent from the job you have beendoing.Final salary (scheme) is a scheme wherethe benefits are generally worked outbased on the member’s final pensionableearnings and pensionable service.Lifetime allowance A limit on the totalvalue of all pension benefits (except theState pension) that you can take withoutpaying additional tax. The value ofbenefits is assessed at the time that youtake your pension.Linked pension is pension based onprevious service in the Civil Servicepension arrangements which you hadchosen to link to your current earnings.MyCSP Pension Service Centre holdsyour pension record and administersyour pension on your employer’s behalf.Your MyCSP Pension Service Centreauthorises the pensions payroll providerto pay pension benefits.Partial retirement allows you to drawyour nuvos pension whilst you continueto work for your Civil Service pensionsemployer. You will only be allowed to dothis if you have reduced your earnings byat least 20%, for example by moving topart time working or downgrading.Pension age is the earliest age at whichyou can choose to leave and receiveimmediate payment of your pensionwithout it being reduced for being paidearly. Pension age in nuvos is currently65.Pensionable earnings are earnings thatcould count towards your pension. Theycan include non-cash items, for example,uniforms or accommodation.Pensions payroll provider is the agentthat pays lump sums and pensions onbehalf of Civil Service Pensions. (SeeAppendix A.)Scheme medical adviser offers guidanceon medical issues relating to ill healthretirement applications.10

Appendix APension payment processThe pensions payroll provider for CivilService Pensions is Capita.Capita will pay the pension monthly,on a designated payment date, inarrears. They will tell you what themonthly payment date will be, eitherbefore or with the first payment of thepension. When a payment date falls ona weekend or an English bank holiday,the payment date will be the precedingworking day. The amount due for part ofa month is worked out proportionatelyaccording to the number of days in thefull pension month.Capita will not send you a monthlypayment advice note; they will only sendyou an advice note when the amount ofyour pension or your tax code changes.The note will show the monthly grossamount payable and the tax that will bededucted from next month’s payment.The net amount may vary slightly due tothe effect of the PAYE tax tables.Capita contact details are:CapitaPO Box 215, Mowden Hall,Darlington,Co. DurhamDL3 9GTTelephone 0870 1699 700Email csp.enquiries@capita.co.ukWhat about income tax?Pensions are assessed as earned income.Capita will deduct income tax usingthe tax code notified by HM Revenueand Customs. The deduction may beprovisional until Capita receives theproper code.Capita has no part is deciding your taxliability or code, so you should direct anyenquiry about your tax code to:Civil Service PensionsHMRCCustomer Operations PO 4000CardiffCF14 8HRTelephone 0845 300 0627Capita will send you form P60 each yearto show the amount of pension paid andtax deducted in the previous tax year.11

www.civilservice.gov.uk/pensionsThis leaflet has been produced by MyCSPon behalf of the Cabinet Office.© Crown copyright December 2012Printed by St Ives Direct NIHR