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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:
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.
If you are still working for the Company and contributing to the Plan, you will receive a Statement each year which shows you:
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:
You can access copies of your latest Statement by logging into My Pension – your online pension account.
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:
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.
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.
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.
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.
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.
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.
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.
You may be able buy a different type of pension (known as an ‘annuity’) on the open market.
There are lots of different types of annuities available so you can choose the shape of retirement income that best suits your circumstances. For example, if you are single or a smoker, you may be able to buy a pension which provides you with a higher income than the Plan would provide.
You may be able take all your benefits as cash, either as one lump sum or instalments. Remember: if you take it as one lump sum, the amount in excess of 25% would be taxed as income – which could push you into a higher tax bracket.
Alternatively, you may be able to take a series of cash instalments and the first 25% of each payment would be tax-free with the remainder taxed as income.
You need to decide how to invest the balance of your drawdown account and there is also the risk that you could run out of money before you die. However, you are not tied to drawdown – you may be able to buy a pension with the remainder of your account in the future.
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.
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.
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:
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:
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.
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.
Prior to April 2016, the State Pension was made up of 2 elements:
As a member of the Plan you were ‘contracted out’ of the additional State Pension whilst in pensionable service prior to April 2016. This meant you and the Company paid a reduced rate of National Insurance and you will not have accrued any additional State Pension whilst you were an active member of the Plan. In return, the benefits you accrued in the Plan were designed to ensure you receive a minimum level of pension from the Plan.
If you were a member of the Plan before April 1997, being contracted out meant your pension accrued before April 1997 was subject to a Guaranteed Minimum Pension (GMP). This GMP will not come into payment until your GMP payment age, which is 60 for women and 65 for men. If you retire before your GMP payment age, your Plan pension is calculated taking this GMP into account, so you should not expect to see a step up in your Plan pension at your GMP payment age. Instead, part of your Plan pension will be replaced by GMP from GMP payment age, which may impact the increases you receive in payment.
From April 2016 the Government removed the option to ‘contract out’ and introduced a new State Pension. Your National Insurance record before 6 April 2016 is used to calculate your ‘starting amount’. This starting amount is part of your new State Pension. If this starting amount is below the new State Pension, National Insurance contributions paid after 6 April 2016 will result in you accruing more State Pension. Because the Plan was contracted out prior to April 2016, your starting amount will include a deduction called the Contracted Out Pension Equivalent (COPE). In most cases, this COPE will be equal to the additional State Pension you would have earned had you not be contracted out. Your Plan pension at April 2016 is likely to be higher than this COPE, but this is not guaranteed and if you were a member of 2 or more contracted out Schemes the COPE amount shown is based on all your schemes. If you have a Guaranteed Minimum Pension (GMP) in the Plan, your GMP may be lower than your COPE as GMP is only in respect of Plan service before April 1997 whereas your COPE is in respect of all the years you were contracted out prior to April 2016. More details of your COPE can be found on the COPE page of the Government website.
You can obtain a forecast of what your new State Pension is likely to be by visiting the ‘Check your State Pension forecast’ page of the Government website.
For more information on State Pensions please visit the HMRC website.