Independent Review of Police Officer and Staff Remuneration and ...

5 Health and fitness
Comparisons with other pension schemes – Local Government Pension Scheme
5.4.39 The local government scheme is open to a range of local government officials, including police
staff outside London. The terms and conditions are set out in the Local Government Pension
Scheme Regulations 1998. The current Local Government Pension Scheme (LGPS) was
introduced from 1 April 2008.
5.4.40 An individual may be required to retire on medical grounds if he or she is permanently
disabled. The local government pension scheme has three tiers of ill-health retirement benefits.
These were introduced more efficiently to direct benefits at those most in need. The benefits are
highest for those who, irrespective of age, are medically assessed as less likely to work again
before the scheme’s normal retirement age of 65. There are three tiers 382 :
• Tier One: Those with no reasonable prospect of being capable of undertaking gainful
employment before the age of 65 receive an ill-health pension based on what their
membership would have been had they continued in employment until they were aged 65.
• Tier Two: Those unlikely to be capable of gainful employment within three years of
leaving their employment, but likely to be able to undertake gainful employment before the
age of 65, receive enhanced benefits of 25% of their prospective membership to the age of
65 on top of their accrued membership 383 .
• Tier Three: Those likely to be capable of undertaking gainful employment within three
years of leaving, or before the age of 65, if that is earlier, receive ill-health benefits based
on their accrued membership. There is no enhancement. This ill-health pension can only be
paid for a maximum of three years, stops if the member obtains gainful employment, and is
subject to review after 18 months. At the review, a further medical assessment is needed to
establish whether the member remains incapable of gainful employment.
5.4.41 When a Tier Three pension is stopped, it becomes payable again at 65, but the member can
decide to take reduced benefits at or from 60 or, with the former employer’s consent, at or
from 55. If the member dies whilst his pension is stopped, a lump sum death grant of five times
his pension, less the amount of any pension and lump sum already paid, is payable.
5.4.42 A Tier Three pension can be upgraded to a Tier Two pension in certain circumstances and with
a further medical assessment. The employer cannot revise the award if the original Tier Three
ill-health pension has been stopped for three years or more, or if the member has reached age
65. The ill-health retirement framework provides certain protections for those who were active
members and aged 45 or over at 1 April 2008, and for those whose conditions have meant they
have had to reduce their hours of work.
5.4.43 A local government employee who sustains an injury or contracts a disease at work may be
entitled to an injury allowance. Like injury awards for officers, these are separate from the
LGPS benefits and are paid by the employer.
Civil service pension
5.4.44 The civil service pension schemes are open to those working in the civil service including, for
historical reasons, police staff working in London.
5.4.45 Under the civil service classic pension scheme, ill-health retirement can be applied for either
by the member in question or the employer, although the employer must first investigate
options to allow the member to continue working. The member is then assessed by a medical
adviser for eligibility for a pension. An ill-health retirement pension is paid if the scheme’s
medical adviser is satisfied that the member can no longer do his job because of illness, the
breakdown in his health is likely to be permanent and he has at least two years’ service.
382 Local Government Pension Scheme, October 2011, www.lgps.org.uk
383 Gainful employment is defined as paid employment for not less than 30 hours in each week for a period of not less than
12 months
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