Our research paper provides an international overview of ill-health and disability pensions. Contact us to receive a copy of the full paper or to request a meeting to discuss the research or receive a tailored briefing relevant to your organisation.
Abstract
Ill-health and disability pensions are becoming a major pressure point for both public and occupational schemes. The paper reviews incidence causes and financial impact across Europe, North America, Australia and beyond.
Mental health conditions are now the leading cause of new disability awards in much of Northern and Western Europe, often accounting for a third to half of new claims. In contrast, musculoskeletal (MSK) disorders dominate in the United States, while Canada and Australia report a higher mental health share. Cancer, cardiovascular and neurological conditions remain significant contributors worldwide.
The financial consequences are substantial. For DB schemes, each ill-health case can add liabilities of around £150,000+ when pensions come into payment 15 years early. For DC members, retiring ten years early can halve eventual pension income.
Patterns vary across regions, reflecting system design, eligibility rules and workplace factors. Partial benefit structures in Europe broaden coverage but reduce average payments; stricter US rules produce fewer but costlier awards; and lump-sum approaches in Latin America create challenges for long-term adequacy.
For pension boards, these trends underline the importance of active governance: monitoring incidence, updating actuarial assumptions, ensuring robust claims processes, and supporting rehabilitation. Addressing these challenges is essential for sustainability and fair outcomes.
How Haines Global Pensions can help you
We support boards, trustees and employers in understanding and managing the impact of ill-health and disability on pensions. We can help by:
- Reviewing and updating actuarial assumptions for ill-health incidence.
- Stress-testing funding outcomes under different health and workforce scenarios.
- Benchmarking international practice to inform scheme governance and risk management.
- Working with trusted experts in our network to advise on claims processes, wellbeing and rehabilitation approaches that complement pension strategy.