IF YOU RETIRED DUE TO ILL HEALTH
If you retired early and receive an ill-health pension, there are a couple of points to note:
Monitoring your earnings and health
The Group Trustee is required to monitor the earnings and health of those pensioners in receipt of an ill-health pension, usually up until they reach the age of 55. These reviews are used to assess whether any changes are required to the benefits in payment to take account of improvements in the health of a member, higher earnings, or both.
If this applies to you, you will receive a letter and short questionnaire from Railpen each year or at the monitoring interval notified to you when you retired. This is part of the procedure the Group Trustee is required to follow under the Rules of the ESPS. The questionnaire should be fully completed and returned to Railpen.
Lump sum payable on death in retirement
You should also note that there is a different calculation for the lump sum payable on death in retirement. If a pensioner dies within five years of retiring, a lump sum equal to the balance of payments is payable at the Group Trustee's discretion.
The total of any tax-free lump sum benefit paid to you at the time of your retirement and all pension payments made (excluding any pension increases you have received since retiring) will be subtracted from the notional lump sum. If there is a difference remaining, it will be payable as a lump sum.