Retirement on Grounds of Ill Health

Early retirement benefits may be provided on, or after, age 50 if the member has left service.  However, if retirement is caused by ill-health, retirement benefits may be paid immediately, regardless of the employee's age.

 

If a member wishes to draw down their pension fund on grounds of ill health, the member will be required to have a Medical Declaration Form completed and signed by their Medical Consultant (not GP) confirming they meet the following definition of ill health:

“Ill Health means physical or mental deterioration which is serious enough to prevent the individual from following his / her normal employment or which very seriously impairs his / her earning capacity.  It does not mean simply a decline in energy or ability”.

 

However, drawing down your pension fund on grounds of ill health may or may not be the best solution and the member should therefore seek advice from either their Irish Life Advice Team point of contact or their own independent advisor.

 

Salary Protection Scheme:

The member should also check to see if they are a member of their organisation’s Salary Protection Scheme, which will continue to provide the member with an income and will make pension contributions into their pension fund until the earlier of:

  • the member recovers and returns to work;
  • the insurer decides that the member is fit to return to work based on medical evidence or after the Functional Assessment Test;
  • The member resides outside the member states of the European Union for more than 13 weeks in any 1 year period (unless agreed otherwise with the Insurer in advance).
  • the member is age 60, which is the ceasing age of the Salary Protection Scheme.
  • the member dies.

Refer to the Salary Protection Scheme Booklet for further information.
 

If you are in ill-health, there is no obligation on you to take early retirement, i.e., to take benefits from your pension scheme now. Depending on your circumstances, there may be good reasons to do so or not to do so.   However, if you think you meet the above definition of “Ill Health” and your Medical Consultant will sign the Medical Declaration Form confirming you meet the ill health definition, and you wish to proceed on this basis, Irish Life can issue you with retirement options on the basis of:

  • Retirement on normal grounds; and
  • Retirement on grounds of ill health.

You can then make an informed decision in respect of what is the best retirement option for you.

 

It should be noted if you retire early or on grounds of ill health, your pension fund may be lower than if you had continued as a member until normal retirement age i.e., age 65, because:

  • You and your employer will have contributed less pension contributions.
  • The pension contributions paid to date will have been invested for a shorter time.

 

 

Life Cover:

Members should be aware that their death in service benefit will also cease once you draw down your pension, i.e., either early retirement or retirement on grounds of ill health.  Please refer to your Pension Scheme Member Booklet for further information on your death in service benefit.

 

Who to Contact if you wish to Retire on Grounds of Ill Health:

Having regard to the above, if a member is considering retiring on grounds of ill health, please email fedvol@irishlife.ie with your name, member number and scheme number and arrangements will be made to issue you with your retirement options on both normal and ill health retirement grounds, so you can make an informed decision in respect of what retirement option is best for you.

 

Please also review the Trustees' procedures for dealing with an Ill Health Application.

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