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How to… avoid ill-health disputes

1. Check your scheme rules

Look at the rules, rather than a booklet summary. How will a member qualify for ill-health early retirement? To what extent must a member be ‘incapacitated’, and how is that defined? Is a member who meets a qualifying test automatically entitled to a pension, or is this discretionary?

2. Seek additional information if needed

Take a proactive approach to ensuring that you have the information you need. Check for any gaps in the medical information provided on an IHER application and consider whether you need further evidence from an appropriate adviser or specialist to help you reach your decision.

3. Who should make the decision?

It’s easy to get this wrong. Often the rules will say that medical advice is required, but it is rare for a scheme to give a doctor the job of actually deciding whether or not the member meets the incapacity condition. Usually, this will be a trustee decision, after having considered medical advice. If that is your rule, you should come to your own conclusion, considering all the evidence and applying it to the criteria laid down in the rule.

4. Ask the right questions

Make sure the medical advice you receive enables you to answer the precise test of incapacity in the rules. A clear briefing to the medical adviser on the scheme’s requirements and the time period the opinion has to cover will help ensure that the opinion is accurate and reliable. Consider also asking the adviser to confirm whether the member meets the severe ill-health condition (for tax purposes).

5. Take into account all relevant factors

Consider and balance all the available evidence, attach appropriate weight to each element and try to resolve inconsistencies – you may prefer one medical opinion, so long as this does not go against the weight of available evidence. Ensure you understand the duties a member is required to carry out at work if this forms part of the rule: in practice, these may differ from the job description.

6. Consider departing from guidelines

As always, you should consider each case on its merits, including whether, in a particular case, the circumstances require you to depart from any guidelines or policy you may have developed. Bear in mind that guidelines can sometimes be out-of-date or inaccurate, and may reflect practices that have developed over time without proper reference to the scheme rules.

7. Work with the member

It can be helpful to give individuals concerned the opportunity to see and comment on evidence first, such as medical reports or factual evidence about the nature of the member’s job. Doing so can help ensure that all relevant facts come to light and that the process is satisfactory for all parties.

8. Some cases require an urgent decision

There may be situations in which it is right for a decision to be taken urgently, on the basis of whatever information is available (eg where a member is terminally ill and may elect under the rules to exchange an entire pension for a lump sum). Undue delay in such a case might amount to maladministration.

9. Communicate well

Ensure that the member is kept informed of progress – remember that the member may find the process confusing and/or stressful. Provide enough information for the member to understand how you reached your decision and what factors carried weight. Ensure that the explanation is accurate.

10. Record your decisions

Don’t just note the final decision – also record the information gathered and the factors considered, as well as the full reasons for the decision. If you have a policy or guidelines, make a note that you have checked these and state whether these were followed.

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