Contents

Overview

In this section we cover the benefits that are payable to you from the Plan.

There are also benefits that may become payable to your loved ones after your death. You can find more information about these benefits in the Benefits if I die section of this website.

In summary the Plan will provide you with:

  • An income for you in retirement (your Plan pension); and
  • The option to exchange some of your pension at retirement for a one-off cash sum.
  • Financial protection for your loved ones in the event of your death.

You can see how much pension you have built up in the Plan by logging into My Pension – your online pension account. Here you will also be able to use the online modellers to see how much this pension may be if you take it at different dates.

Alternatively, you may wish to consider transferring your benefits out of the Plan. This may provide you with different options at retirement. If you are a Deferred member, the Trustee also provides you with an online retirement options modeller which can help you to compare the alternatives available if you transfer out;

 Please remember to tell us if your contact details change, otherwise we will not be able to send you information about the Plan and your benefits. For more information about how to update your contact details, please take a look at the ‘How do I?’ section of this website.

Your Annual Benefit Statement

If you are still working for the Company and contributing to the Plan, you will receive a Statement each year which shows you:

  • How much pension you have built up in the Plan; and
  • An estimate of what pension you may receive when you reach age 65.

If you have stopped contributing to the Plan (because you no longer work for the Company or have chosen to opt-out of Plan) and have reached age 55, you will receive a Statement each year which shows you estimates of:

  • The pension that would be payable if you started to receive it immediately;
  • The pension that would be payable if you delay receiving until it can be paid unreduced (normally age 60); and
  • An estimate of the value of your benefits if you were to transfer them to another arrangement (see below).

You can access copies of your latest Statement by logging into My Pension – your online pension account.

It's time to decide

Approaching retirement is an exciting time. There are however some key financial decisions you need to make, which will affect you for the rest of your life!

The Trustee wants to help you make the most of the benefits you have built up in the Plan.

The first question you need to consider is whether you keep the benefits within the Plan or consider transferring them to another arrangement.

Watch our video which summarises the options available.

If you are a Deferred member aged 55 or over you will now receive a Deferred Benefit Statement each year. This will show you:

  • What your Plan pension would be if you choose to start receiving this now;
  • What your Plan pension would be if you choose to defer this to a later date (normally the earliest you can take your Plan pension without it being reduced for early payment); and
  • An estimate of your current transfer value. The amount that would be paid if you choose to transfer out of the Plan into another pension provider.

The Trustee has also made an additional online tool available for you to explore the options available to you if you wish to consider transferring your benefits out of the Plan. You can access this tool here. As this tool has been pre-loaded with details about your Plan benefits you will need to enter a username and password. You will find this on your Deferred Benefit Statement.

When can I receive my pension

You may be able to start receiving your pension as early as age 55 and you must start receiving your pension no later than age 75. The Plan is set up for members to start receiving their pension from age 60. If you choose to receive your pension earlier, it may be reduced as it is being paid sooner than expected.

You can check the earliest age you can receive your pension unreduced by logging into My Pension. If you are still employed by the Company and building your pension in the Plan (an Active member) you should discuss your options with your HR representative as the choices available to you may not be exactly as described here.

Options at retirement

When you retire you will have the option to exchange part of your pension for a tax-free cash lump sum - up to a maximum amount set by HM Revenue & Customs (HMRC). 

This lump sum is known as a “Pension Commencement Lump Sum (PCLS)”. 

The terms for exchanging pension income for a cash lump sum may be reviewed and altered by the Trustee from time to time.

It may be possible for you to exchange further pension for a lump sum, but this would be subject to tax.

Any pension quotations you receive from the Administration Team will show the maximum cash sum you could receive. You can also use the modelling tool on My Pension to find this information.

In certain circumstances you may be able to exchange your entire pension for a single cash payment. For example, if the value of the benefits you have built up in the Plan is below a limit set by HM Revenue & Customs. If this is an option that may be available to you, details will be included in any retirement quotation or Deferred Benefit Statement you receive.

You may also wish to consider what options would be available if you choose to transfer your benefits out of the Plan to another approved pension arrangement. We cover this in more detail below.   

Additional Voluntary Contributions (AVCs)

If you paid AVCs whilst you were an Active member these are held in a separate account and can be used to provide additional benefits at retirement. You will receive a Statement each year showing you the current value of your AVCs.

You can also use your AVCs to reduce the amount of pension you need to exchange to fund a PCLS, if you choose to receive one.

Any pension quotations you receive will include information about your AVCs and the options available to you. You may have also paid ‘In Plan’ AVCs. These are treated differently to normal AVCs. ‘In Plan’ AVCs purchase additional pension in the Plan. Similar to your normal Plan pension, this is calculated based on your Final Pensionable Salary. If you pay ‘In Plan’ AVCs, any Statement you receive will show the percentage of your Final Pensionable Salary your ‘In Plan’ AVCs have purchased.   

Flexible Retirement

The Plan Rules allow for members, with the agreement of both the Company and the Trustee to start receiving some of your benefits, whilst leaving the remainder deferred within the Plan to take at a later date. This is often referred to as ‘Flexible Retirement’ 

Following the High Court ruling on 26 October 2018, regarding how to adjust benefits to reflect gender inequalities in Guaranteed Minimum Pensions (GMPs), the Trustee has decided not to consent to any new flexible retirement requests at the current time.

For more information on the High Court ruling click here.

Transferring out

Whilst you are a Deferred member you can transfer your benefits out of the Plan. This option will not be available once you start receiving your pension.

If you are interested in obtaining a transfer value illustration, please take a look at the ‘How do I?' section of this website.

It is a legal requirement for you to take impartial financial advice before transferring out of the Plan to a DC arrangement if your transfer value (excluding AVCs) is greater than £30,000.

You can find a list of independent financial advisers approved by the Financial Conduct Authority (FCA) at register.fca.org.uk.

Options available if you transfer out

You may be able to access different options in relation to your benefits if you convert your ‘safeguarded’ benefits to ‘flexible’ benefits by transferring them out of the Plan to a defined contribution (‘DC’) arrangement.

Transferring out to a DC arrangement may, depending on the terms of the receiving scheme, give you the opportunity to choose to receive your benefits in a different way to the Plan.

The specific options and terms of those options available to you from any such scheme will vary and depend on the terms of the receiving scheme. However, we have provided a high level summary of the potential key options below, which may be available.

Deferred members age 55 and over only The Trustee has arranged for you to have access to a modelling tool provided by Aon, the Trustee’s actuarial advisers. This tool will be loaded with your actual Plan benefits and allows you to explore further each of the options mentioned above. You will need your unique login details to access this online tool. This is included on your Deferred Benefit Statement. You can access this online tool here.

Divorce and dissolution of a Civil Partnership

If you are going through a divorce, or the dissolution of a civil partnership, you will normally need to provide details of all your pension savings as part of agreeing any financial settlement.

Our Plan Administrator can provide you with a pack that provides all the information you are likely to require. To start the process, contact them and let them know you need a Divorce Pack. This will ensure you, and your solicitor, have all the information you need. Don’t forget, if your personal circumstances change update your Expression of Wish details.

Limits and taxation

The Plan is a registered scheme for HM Revenue & Customs’ (HMRC) purposes. As a registered scheme, it enjoys several tax advantages. Consequently, HMRC impose limits on the amount of pension savings you can make each year and build up over your working life.

The limits are twofold:

  • How much you can add to your total pension savings each year – The Annual Allowance. For the 2021/22 tax year the standard Annual Allowance is £40,000
  • The total you can save build up over your lifetime as pension savings – The Lifetime Allowance. For the 2021/22 tax year the standard Lifetime Allowance is £1,073.000.

Depending on your personal circumstances the actual limits that apply to you may be different to those shown above.

For example, you may be subject to a lower Annual Allowance if:

  • Your total taxable earnings is greater than £200,000 per year; or
  • You accessed some of your pension savings from either a Money Purchase or Defined Contribution Scheme.

If you are an Active member of the Plan your Annual Benefit Statement will include details of how much of your Annual Allowance you have used by building up further benefits in the Plan.

If you are a Deferred member, your Plan pension may continue to increase each year, these increases do not count towards your Annual Allowance.

If you exceed either the Annual Allowance or Lifetime Allowance you may need to pay additional tax.

You can find more information on these limits by visiting the HMRC website. If you think you may have exceeded one or both of these limits you should consider contacting either a financial adviser or tax specialist.

Please remember, these limits apply to all your pension savings.

The State Pension

Most members are likely to be eligible to receive the State Pension. The amount you receive will depend on the National Insurance contributions you have paid over your entire working life.

For more information on State Pensions please visit the HMRC website.