Pension Shortfall due to ill health

[armanimick]

Dear Experts

Can you offer me any advice please. I suffered a cerebral haemmorage October and recovering very well. I am left with emotional lability and memory problems and am currently off sick.

I have worked for my company as P.A. for 22 years and belong to their final salary pension scheme. I am 57 in September and have 3 years to go before I draw a full pension. Due to the pressures of the role it seems unlikely I can return to this job so approached the scheme administrators through my employers to find there is no provision for early retirement on grounds of ill health.

If I leave it is classed as early retirment and I am penalised i.e get half the lump sum and half the annual pension regardless of having 3 years left before I would get full entitlement.

I know I can go back for a few days eventually but I am lucky to be alive and therefore happy to change my lifetstyle. Rather concerned though it will mean what I have worked for can be taken away like this.

Is there anything anyone can suggest so I can protect my pension please or do I simply have to come to terms with it.

Appreciate any financial advice on this front please.

Many thanks...

[bednobs]

if you are too unwell to work, then you could go onto benefits until retirement then take your pension

[buildersmate]

This sounds like the scheme is administered by a third-party pension provider (rather than by the company itself).
I'm somewhat surprised that the scheme provider has no such scheme for medical retirees, but I guess they are playing hard-ball.
Perhaps as you have been a long-serving employee your company might be prepared to get involved in 'doing a deal' with the pension provider to put pressure on them.
I wonder whether the pensions ombudsman gets involved in looking at these sorts of cases.

[armanimick]

Thanks Builders Mate... the company is a big corporate and does things by the book... My boss has said he'd ask on my behalf but as he is "ruled" by HR, their response is if we do it for one we have to do it for everyone so no one gets "special treatment" Trustees are people who work for the company plus others, I was going to write and ask for consideration but expect same answer. Went in to meeting yesterday to hear they are employing someone to "cover" me until they get the medical report, guess they are planning on taking disciplinery action as I seem to have become a liability... So much for so called work mates" I know the law to some extent but just want to get out without compromising pension, after all its all I have till state pension kicks in...

Thanks for your post

[factor-fiction]

I wonder whether you have been given the correct information. Yes, pension schemes apply an actuarial reduction for taking your pension early, but in my experience this is typically 5% p.a. so if you take it at age I'd expect the reduction to be maybe 15% rather than the 50% figure you mention.
As bednobs says, there will be no actuarial reduction if you retire now but wait until you are 60 before drawing it.

[armanimick]

Thank you. I've asked for a pension statement so I will knoPw exactly andni will also ask if I can leave it alone for 3 years and try to get maximum payout rather than a reduction for the sake of a few years...