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Nearly two years ago, the Treasury reported on ill health retirement in the public sector and made a number of impo...
Nearly two years ago, the Treasury reported on ill health retirement in the public sector and made a number of important recommendations. Quite a number of those had already been picked up by the local government pension scheme.

The LGPS is ahead of other public sector schemes in this area as it includes the requirement for ill health retirement to be certified by an independent and qualified occupational health doctor. Nevertheless, there were some others that needed further consideration by the DTLR, the government department responsible for the LGPS, and a working party was set up to consider them. As a result of the working party's deliberations, the DTLR issued a discussion paper last month suggesting further changes. Comments are invited by 26 April 2002.

Among other things, the discussion paper examines:

-- Overcoming the 'cliff-edge' choice between work and retirement

-- Dealing with staff who cannot perform their duties efficiently because of ill-health, but who do not meet the scheme definition of permanent incapacity

-- Abatement - or otherwise - of post ill-health retirement earnings

-- Resolving confusion between employment type questions, such as incapacity and whether employment should be terminated, and pension questions, such as entitlement to benefit.

Options include simplifying the system; the possibility of an interim decision on retirement which could be revisited later; and whether, perhaps at an appeal stage, there should be a national panel of medical assessors to determine individual cases and establish some kind of case law.

The paper asks whether there should be income protection policies in ill-health cases, operating either alongside or instead of the LGPS provisions, especially where there is the prospect of a member of staff returning to some kind of work. An alternative is private medical insurance, although the paper acknowledges the difficulties posed by the cost of premiums.

There has been much criticism of individual cases, usually involving senior officers, who take ill-health retirement and then pop up, often almost immediately, in another well-paid job while keeping their pension. In response to this, the paper asks whether there should be the ability to review the award of pensions and reduce compensation in the light of changed circumstances. Such a review could allow compensation to be increased where this was justified in the light of the former employee's medical condition.

The DTLR paper raises important and interesting

issues and suggests some imaginative ways forward. Hopefully local government

will give these the consideration they deserve.

Tim Rothwell

Managing director, GWT Rothwell

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