We’ve updated our website and related forms to clarify how stepping down in the Career Average arrangement works in relation to ill-health retirements.

The amended forms can be reviewed below:

Stepping Down Election for Career Average Scheme members (PDF, 423 KB) (This link opens in a new window)

 Ill-health retirement application (PDF, 845 KB) (This link opens in a new window) 

Ill-health Medical Information Form (PDF, 575 KB) (This link opens in a new window)

The Stepping Down election for Career Average members relates to a person who has a step down in salary rate as a result of an ill-health condition. The member and their employer / occupational health team are invited to complete this form, setting out the details of the medical reasons for the decision to take a different role with a reduction (step down) in salary rate. Provided there is a link between the member’s ill-health at the point of stepping down and at ill-health retirement, if the member is awarded ‘total incapacity enhancement’ then the enhancement will be based on the person’s notional salary rate prior to the stepping down, revalued in line with the relevant Pensions Increase factors.

The election only applies to members in the Career Average arrangement as members who are still in the Final Salary arrangement already receive an element of protection on account of the final average salary definition of the best of either: the salary over the last 365 days service; or the average of the best consecutive 3 years average salary in the last 10 years before leaving service. If such a member took a reduction in salary in order to better manage an ill-health condition, any ill-health retirement in the next 7 years will use the salaries earned in the 3 years prior to that reduction.

Updated guidance on ill-health retirement can also be found here: Ill-health retirement guidance (PDF, 567 KB) (This link opens in a new window). Please note ill-health Stepping Down in the Career Average arrangement is completely different to the old stepping down election which applied to members of the Final Salary arrangement up to 2006. Under the old stepping down provision, a two part calculation would be undertaken in respect of service before and after a person’s reduction in salary. In these cases, the employer certified that the reduction in salary was as a result of the ‘efficient discharge of the employer’s functions.’ This old provision, however, is no longer available to Final Salary members.