UKAEA Pensions

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Ill-health retirement

What if I have to retire early owing to ill-health?

Your United Kingdom Atomic Energy Authority pension scheme benefits may be paid to you before your normal retirement age if you develop a medical condition which the scheme medical advisers confirm will stop you from being able to work again during the period up to your normal retirement age. There is a process which is strictly applied and includes criteria which must be met in full before ill-health retirement with early payment of pension benefits can be approved.

If I am retired early on grounds of ill health will I receive any enhancement to my pension scheme service?

If your employer and the Pension Scheme managers agree that ill health retirement benefits under the scheme can be paid, you may receive an increase to your scheme service on which your benefits are calculated. The amount of the increase in service and therefore the pension benefits from the scheme will vary depending on your scheme service and whether you have a permanent or fixed term contract. For example if you have 5 or more years of scheme service (or you have purchased Earlier Qualifications for Benefits) your scheme service will be increased.

Where service is increased under the scheme rules you will be required to pay a contribution to provide for a pension for your spouse in respect of the increased service. This amount is deducted from your retirement lump sum.

What benefits will I receive on ill-health retirement and what amount of increased service will I be awarded?

The following two tables provide details of the benefits available from the United Kingdom Atomic Energy Authority pension scheme. If your employer has separate arrangements for the payment of extra benefits for ill-health retirement you should speak to your employer.

Table 1 Qualifying for Benefits

Qualifying ServiceBenefits
5 or more years Immediate payment of pension and lump sum with increased service
At least 2 but less than 5 years Immediate payment of pension and lump sum. Service is not increased.
Less than 2 years Refund of basic contributions

If you have purchased Earlier Qualifications for Benefits you will be treated as if you have 5 Years qualifying service for ill health retirement benefits


Table 2 Increase in Service

Your Scheme ServiceService used for Pension enhancement
At least 5 but less than 10 years Reckonable service is doubled but limited to the amount of service you could earn from the date of leaving to age 65
10 years or more Either
  The service increase is the amount of reckonable Service which would bring your service to 20 years at the last day of service but limited to the amount of service you could earn from the date of leaving to age 65.
  Or
  The service increase is 6 2/3 years but limited to the amount of service you could earn from the date of leaving to either your 60th or 65th birthday depending on your normal retirement age
There is also an overriding limit of 40 years of reckonable service.
Would my pension be increased?

Ill health retirement pensions receive the same percentage increase as other United Kingdom Atomic Energy Authority scheme pensions. See Pensions Increases for more details.

What if I am a member of the AVC Scheme or Shift Pay Pension Plan and I am medically retired?

As a member of the AVC Scheme or the Shift Pay Pension Plan you would be able to receive the benefits from these arrangements at the time you receive ill-health retirement benefits from the United Kingdom Atomic Energy Authority final salary scheme.

Can I take the whole of my ill health retirement benefit as a pension lump sum?

Normally the benefit payable is a pension and lump sum. The United Kingdom Atomic Energy Authority scheme guarantees to pay 5 years’ worth of pension including the value of the lump payment. In cases of serious ill health (where your doctor confirms that your life expectancy is likely to be less than 12 months) you can choose instead to receive a lump sum payment equal to 5 times the value of the annual ill-health retirement pension less an amount equal to the ill health retirement lump sum and, where appropriate, the amount of any guaranteed minimum pension (GMP) payment. If you qualify and choose to receive this exceptional payment you would forego your entitlement to a pension from the scheme.

The Guaranteed Minimum Pension (GMP) referred to is the amount of pension which we must pay and is based on service between 6 April 1978 and 5 April 1997 when the United Kingdom Atomic Energy Authority scheme was contracted out of the State Second Pension (S2P).