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GLOSSARY

Early retirement definition

Published by a LexisNexis Pensions expert

What does Early retirement mean?

Occurs when a member retires before his normal pension age and takes a pension before his normal pension age which may be reduced to reflect early payment. Retirement before age 55 is not permitted by HMRC, in respect of registered pension schemes, except in the case of certain high-risk jobs or in cases of ill-health.

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Obtaining a medical report during employment—checklist

Obtaining a medical report during employment—checklist This is a Checklist of the main issues that an employer will need to consider when seeking a medical report on a current employee during the employee’s employment: • What is the purpose of the report? See Practice Note: Medical reports—data protection issues and AMRA 1988—Purposes of medical report • Why is it necessary to obtain health information, and what is the justification for seeking a medical report—is there a specific feature of the role that requires it, or is it to assess general health for a demanding senior role? • What does the report need to cover—what does the employer need to know, avoiding being intrusive where it is not necessary or relevant? Is it possible to minimise the health information being processed by the employer by involving an occupational health (OH) service or professional? • Who will see the report, and when, and what they will use it for? • Who will prepare the report? ◦ If it is the employee’s GP...

Updating your rules to reflect A-day changes—checklist [Archived]

Updating your rules to reflect A-day changes—checklist [Archived] ARCHIVED: This archived Checklist sets out the issues that trustees would have had to consider when updating their scheme rules to reflect the legislative changes that came into force on 6 April 2006 (A-day). It is for background information only. For further information, see Practice Note: Updating your rules to reflect A-day changes [Archived]. A-day—an overview On 6 April 2006, the Finance Act 2004 (FA 2004) came into force introducing a new regime for the taxation of pension schemes in the UK. The key changes were: • the system of tax approval was replaced by registration with HM Revenue & Customs (HMRC) • instead of rigid caps and limits on the benefits that could be provided, a more flexible system was introduced whereby tax charges would be imposed on ‘unauthorised payments’ and where members' benefits exceed the annual and lifetime allowance Transitional provisions To avoid pension scheme liabilities suddenly increasing on the removal of the caps and limits previously in place,...

Discover our 6 Checklists on Early retirement

Ill-health early retirement—decision making and exercise of discretion

THIS PRACTICE NOTE APPLIES TO REGISTERED OCCUPATIONAL PENSION SCHEMESThe scheme rulesThe ill-health early retirement provisions of trust-based occupational pension schemes commonly confer decision-making powers on their trustees or sponsoring employers, or both. In some cases, the decision making will be limited to deciding whether the ill-health test set out in the scheme rules is satisfied. In other cases, the ill-health provisions may have a discretionary element in terms of deciding whether to grant an ill-health pension to a member.The definitions and scope of the ill-health provisions will vary between schemes an issues may arise in interpreting those provisions properly. For further information, see Practice Note: Ill-health early retirement—Interpreting the scheme rules.The relevant decision maker must consider each application on a case-by-case basis.The ill-health ruleOn receipt of an application for ill-health early retirement, the decision maker must first consult the relevant provisions in the scheme's governing documentation. It is essential to ascertain who decides whether a member is granted ill-health early retirement benefits.To ensure that an ill-health pension from a registered...

Ill-health early retirement—interpreting the scheme rules

STOP PRESS: On 28 March 2024, the Pensions Regulator (TPR)’s new General Code of Practice came into force, through the Pensions Act 2004 (General Code of Practice) (Appointed Day, Amendment and Revocations) Order 2024, SI 2024/431. The General Code merges and updates ten of TPR’s existing codes of practice into a single code made of ‘51 shorter, topic-based modules’. TPR say this new format will make it easier for governing bodies to find TPR’s expectations and certify whether they meet them. The ten codes of practice affected are those relating to reporting breaches of the law, early leavers, late payment of contributions, trustee knowledge and understanding, MNTs/MNDs, internal controls, dispute resolution—reasonable periods, DC governance and public sector governance.Among other things, the General Code of Practice includes a module on trustee remuneration and sets out TPR's expectations on administration and maintaining an effective system of governance (ESOG), as required by the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, SI 2018/1103 (which implement IORP II). Scheme governing bodies will be expected to...

Discover our 64 Practice Notes on Early retirement

Medical report during employment (employer’s doctor)—application for report

Medical report during employment (employer’s doctor)—application for report [insert date] [insert name and address of doctor] Private and confidential Dear [insert doctor’s name] Request for medical report on [insert employee’s name and date of birth] We are writing to apply for a report on the medical condition of our employee, [insert name]. [Name of employee] has worked with us since [insert date] as a [insert job title][ and we enclose a copy of their job description]. We need this report on [Insert name of employee] in order to [assess their fitness for and likely return to work AND/OR establish if there is any underlying health reason for their frequent absences from work AND/OR plan the work in their department, and assess the impact of their absence from or resumption of duties on workflow and resources AND/OR assess the effect of their condition on their day-to-day activities AND/OR consider the range of reasonable adjustments we may need to make AND/OR consider any short-term measures we can put in place...

Policy and procedure—sickness and attendance (short form)

Policy and procedure—sickness and attendance (short form) 1 Policy 1.1 We are committed to ensuring that our employees attend work whenever they are fit for work. However, we also recognises that people do become ill and, where this is the case, will, through consultation with you and medical advisers when appropriate, manage such absence with the ultimate aim of getting you back to work as soon as possible, with appropriate and reasonable assistance from us to achieve that aim. This policy sets out the expected steps in managing sickness and attendance but we may use a different procedure or take additional steps as required in individual cases. 1.2 Certain parts of this policy are contractual requirements with which you must comply. This policy is not otherwise contractual, does not form part of any employee’s contract of employment and we may amend it at any time. 1.3 This policy applies to all employees and workers except agency workers, consultants, self-employed contractors[, volunteers] [, interns] and casual workers....

Dive into our 20 Precedents related to Early retirement

What potential claims may be available to a part-time employee when their application for voluntary redundancy is not accepted, but a full-time colleague's application is accepted?

What potential claims may be available to a part-time employee when their application for voluntary redundancy is not accepted, but a full-time colleague's application is accepted? Voluntary redundancy As a matter of good practice, an employer should always consider ways of avoiding compulsory redundancy. One of the ways in which this can be done is by seeking applicants for voluntary redundancy, or severance. For further information, see: • Practice Note: Redundancy—fair procedure: individual consultation in particular the section entitled: Consider ways of avoiding redundancy • Redundancy—individual consultation checklist for employers • Precedent: Letter—Redundancy (2) request for volunteers for redundancy (individual consultation) The employer should ensure that selection for redundancy, and for volunteers for redundancy, does not amount to: • indirect discrimination (or any other form of prohibited conduct under the Equality Act 2010 (EqA 2010)), or • any other form of less favourable treatment, eg of part-time workers For further information, see Practice Note: Redundancy policies and procedures, in particular the section entitled: Measures to avoid or minimise redundancy....

Can an employer compulsorily retire an underperforming older worker?

Can an employer compulsorily retire an underperforming older worker? Since the abolition of the default retirement age and the repeal of the statutory retirement provisions in 2011: • compulsory retirement is prima facie direct age discrimination under section 13(1) of the Equality Act 2010 (EqA 2010), and • retirement is no longer a potentially fair reason for dismissal of an employee Forcing an employee to retire will therefore risk a possible age discrimination claim and an unfair dismissal claim. If the primary aim is to avoid such risks, the employer will have to wait for the employee to voluntarily retire at the time the employee chooses to do so. For further information on the employment law issues relating to retirement generally, see Practice Note: Retirement. Employer justified retirement age Retirement of the underperforming employee is, however, possible if the employer has an employer justified retirement age (EJRA). Age discrimination is unique. Unlike other forms of direct discrimination under EqA 2010, direct age discrimination can be objectively...

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Private Client weekly highlights—31 July 2025

This week’s edition of Private Client highlights includes: (1) government publishes HMRC’s Transformation Roadmap; (2) application granted to seal Will of former IRA agent (Johnson v His Majesty’s Attorney-General); (3) Trust deed held to be a transaction to defraud creditors (Khawaja v Stefanova); (4) notice of enquiry to nominated partner held to be valid (Sovereign Corporate Ltd (as the Nominated Partner of Coronation Film Partners Llp) v HMRC); and (5) Successful Inheritance Act claim by adult child excluded from parent’s Will (Isaacs v Green (as personal representative of the Estate of Sybil Rachael Isaacs deceased)).