Your pension guide. For members of Pace Complete. April 2015

Transcription

1 Your pension guide For members of Pace Complete April

2 0 Welcome to the pension guide for members of Pace Complete. Pace is the pension arrangement for Co-operative Group employees. This guide tells you how to join Pace Complete, what benefits you get as a member, and also how Pace is run. Page

3 0 Why should you have a pension? Retirement may seem like a long way off, but everyone needs money for when they stop working, so saving for retirement is important. A pension is a regular income that you get in retirement, and is paid for the rest of your life. The State Pension will only provide for your most basic needs, so the Co-operative Group offers you a flexible and affordable pension arrangement, called Pace, to help you save more for when you retire. Pace is easy to join, it probably costs less than you think and comes with some great extras, such as financial support for your family if you die. What s more, when you join Pace, the Group will also pay into your pension making it easier to save more for your retirement. Page

4 The highlights 0 This guide describes Pace Complete, which is the defined benefit section of Pace. There is a separate guide for Pace Essential and Pace Extra, the defined contribution sections, on the Group s pensions website, at What other benefits does Pace Complete give me? How much does it cost to join Pace Complete? What about tax? % of your Pay. Turn to page for more details. How does my pension build up in Pace Complete? Pace Complete is a career average revalued earnings (CARE) scheme. This means your pension is linked to your Pay and the number of years that you are a member. Each year, the pension that you have earned so far while you are a member is increased in line with inflation, up to a maximum of %, in order to protect its future buying power. Who manages Pace Complete? As well as a pension when you retire, Pace Complete gives your family benefits on death and financial protection if you become too ill to work. The Group Pensions Department manages Pace Complete on behalf of the Trustees, making sure that the correct contributions are paid in and that benefits are paid out on time. The Pace Trustees make sure Pace is run correctly. Their contact details are on page. You get tax relief on your contributions, and national insurance savings through what is called NICE Pensions (see page 0), so with these savings joining Pace Complete may cost less than you think. If there are any pension words you don t understand, you will find them explained on page. Page

5 What s inside? 0 Section Joining Pace Complete How do I join? Can I opt out of Pace Complete? If I opt out of Pace Complete, can I rejoin later? How do I know which section of Pace to join? Can I transfer another pension into Pace? Section Retirement benefits What is a pension? How does my pension build up? What happens to my benefits from a Former Scheme? Can I take a lump sum when my pension starts? When can I take my pension? Will my pension be increased in retirement? What happens if I also have benefits in Pace Essential or Pace Extra? What if I m already contributing to a personal pension? Leaving benefits What happens if I leave the Group before I take my pension? When can I take my deferred pension? Will my pension increase if I leave it in Pace Complete? What happens if I leave Pace while I am still employed by the Co-operative Group? What happens to my AVCs if I leave Pace before taking my benefits? Can I transfer my benefits out of Pace? How do you work out my transfer value? Section Section Being a member How much does it cost? What happens if I get a pay rise? If I join Pace, do I pay less tax? How much does the Group pay? What happens to my contributions? Is there a limit on how much I can pay into my pension each year? Is there a limit on how much I can pay into my pension during my lifetime? Pension Input Period What is NICE Pensions? Can I build up extra benefits? What happens if I am absent from work? What if I work part time? Section Ill-health benefits What happens if I have a long-term illness and cannot return to work? Pace Complete ill-health early retirement pension Death benefits What death benefits are paid if I die while I am a member? Who decides who will get my death benefits? What happens if I die after I have left Pace but before I have taken my pension? What if I die after I have taken my pension? Other information What happens if I get divorced? State benefits How Pace is run What if I have a complaint about Pace? What if I want financial advice? What happens if I am terminally ill? Section Section Find out more Some terms you should know Useful contacts Page

6 Section Joining Pace Complete How do I join Pace Complete? You can join Pace Complete once you have completed two consecutive years of service with the Group. To join Pace Complete, you must complete an application form. This form is on the pensions website or you can ask the Group Pensions Department to send you a copy. 0 Can I opt out of Pace Complete? Yes. You can opt out of Pace Complete at any time by completing an opt-out form. This form is on the pensions website or you can ask the Group Pensions Department to send you a copy. What pension options do I have in Pace? Pace has three sections: If I opt out of Pace Complete, can I rejoin later? No, you can t rejoin Pace Complete. However, you may join Pace s defined contribution sections, Pace Essential or Pace Extra, instead. If you are already a member of Pace Complete, and you decide you would rather build up benefits in Pace Essential or Pace Extra, then you should contact the Group Pensions Department. You will not be able to rejoin Pace Complete. You can find out more details about Pace Essential and Pace Extra on the Group s pensions website. Essential a low cost defined contribution section Extra a higher cost defined contribution section Complete a defined benefit section (open to employees who have two consecutive years of service with the Group) Page

7 Section Joining Pace Complete 0 How do I know which section of Pace to join? Read the pension options factsheet for a summary of the main differences between the three sections of Pace. If you need more details, you should also read the pension guide for members of Pace Essential and Pace Extra, which is available on the Group s pensions website. If you cannot decide, then you might find it helpful to speak to an independent financial adviser. You can find one local to you by looking at this website: Can I transfer another pension into Pace? No, individual transfers into Pace are not permitted. What if I m already contributing to a personal pension? You can pay into Pace and also pay into a personal pension at the same time. You will also get tax relief on any payments you make into a personal pension up to certain limits (see Section, page for more information about tax). However, the Group will not pay contributions into any personal pension you may have. At a glance You may join Pace Complete once you have worked for the Group for two consecutive years. If you opt out of Pace Complete, you can t rejoin it later. You may join Pace Essential or Pace Extra at any time. Page

8 Section Being a member This section explains how much it costs to be a member of Pace, the different ways of paying your contributions, and what happens to the money you pay in. 0 How much does it cost? If I join Pace, do I pay less tax? % of your Pay (for Pace Complete). The minimum contribution to Pace Essential and Pace Extra is less than this you can find out more on the Group s pensions website. You get tax relief on your contributions to Pace. So every 0 you pay into Pace only costs you. (One way of explaining it is that some of the money that you would have paid to the Government as income tax gets paid into Pace instead.) Most members will pay their contributions through NICE Pensions (see page 0). What happens if I get a pay rise? Contributions are worked out as a percentage of Pay, so your and the Group s contributions will automatically increase. These figures assume you pay tax at the basic % rate. If you are a higher rate taxpayer (up to certain limits), the benefit to you may be even greater. Pace Complete is contracted-out of the State Second Pension (SP), so you pay reduced national insurance contributions. Also, contributions are usually paid through a salary sacrifice arrangement called NICE Pensions, which means you make further national insurance savings (see page 0 for more detail). At a glance You pay % of your Pay into Pace Complete. Your employer currently pays % of Pay. You get tax relief on your contributions to Pace. Pay Also called pensionable earnings. This is your basic pay, plus overtime and any other payments that are pensionable, excluding any bonus payments. Pension Input Period For the purposes of the Annual Allowance, each assessment year is defined as the pension input period, or PIP. For Pace, the PIP runs from April to April. Please see the pension tax rules factsheet for more information. Page

9 Section Being a member 0 How much does the Group pay? The Group pays the balance of cost of providing members benefits in Pace Complete. If Pace Complete needs more money in order to pay the benefits that have been built up by members, then the Group may need to pay more into Pace Complete. But, if Pace Complete has enough money to provide the benefits as they fall due, the Group may pay in less. Currently, the Group pays in % of Pay, plus extra contributions to cover the funding shortfall between the assets (value of investments) of Pace Complete and the amount needed to provide the benefits as they fall due. Details of the Group s current contribution rates are included in the members report issued each year. What happens to my contributions? All contributions from employees and the employer are pooled, and invested with the objective of paying all members benefits as they fall due. The fund is one of largest in the UK and invests in a wide range of assets around the world. The Trustees have in place a responsible investment policy, which can be found, along with more details, on the Group s pensions website, at Is there a limit on how much I can pay into my pension each year? The Annual Allowance is a limit set by the Government for how much tax-free money you can pay into a pension in any one year. For / the Annual Allowance is 0,000. There is more detail in the pension tax rules factsheet, which you can find on the pensions website. Is there a limit on how much I can pay into my pension during my lifetime? The Lifetime Allowance is a limit set by the Government on the total value of retirement benefits you can build up in a registered pension scheme before you have to pay extra tax. For / the Lifetime Allowance is. million. There is more detail in the pension tax rules factsheet, which you can find on the Group s pensions website. Page

10 Section Being a member What is NICE Pensions? NICE Pensions is a salary sacrifice arrangement run by the Group, that lowers the cost of saving for a pension and actually increases your take-home pay (that is, the pay you get after you have paid pension contributions, income tax and national insurance from your pay). Most people will automatically pay into Pace using NICE Pensions. 0 With NICE Pensions, you don t actually pay any contributions into Pace. The Group pays them for you! In exchange, you agree to reduce your basic pay by an amount that is equal to what your pension contributions would have been. So, if you earn,000 a year, and you pay % into Pace (,00 a year), your basic pay after NICE Pensions would be,000 -,00 =,00. Now, this is the clever bit: because your basic pay is smaller, you pay less national insurance and that means your take-home pay actually ends up being more than if you weren t in NICE Pensions. See the example on the next page. NICE Pensions does not affect any other employee benefits or statutory payments, such as life assurance, overtime, sick, redundancy and holiday pay or bonuses, which are all worked out according to your pay before the NICE Pensions reduction is applied. The benefits you receive from Pace are also unaffected by NICE Pensions. Is everyone better off paying contributions through NICE Pensions? Most employees will benefit from NICE Pensions. However, there are some people for whom NICE Pensions is not suitable; this includes people who earn close to the National Minimum Wage and people who earn close to the national insurance and tax thresholds (around per week for / tax year). If you fall into either of these two categories, the Group will assess your earnings levels, and if salary sacrifice is unsuitable for you, you will automatically be taken out of NICE Pensions and you will pay your pension contributions by payroll deduction. You will, however, automatically be included in NICE Pensions should NICE Pensions become suitable for you in the future. At a glance NICE Pensions stands for National Insurance Contribution Efficient Pensions. Under NICE Pensions you may benefit from national insurance savings. This helps to reduce the cost of paying into Pace. NICE Pensions is the name of the way contributions are made to Pace. It is not a separate arrangement NICE Pensions operates automatically to make contributions to your pension more cost effective. If you wish, you may opt out of NICE Pensions. Can I opt out of NICE Pensions? You can opt out of NICE Pensions and pay contributions directly from your pay, if you prefer. You can do this at any time by contacting the Group Pensions Department. You can find out more about how NICE Pensions works, by reading the NICE Pensions factsheet on the pensions website. Page 0

11 Section Being a member 0 Can I build up extra benefits? NICE Pensions example This example is based on the tax and national insurance rates for /: Sonia earns,000 a year. She is a member of Pace Complete and has a contribution rate of % of her Pay. Sonia pays tax at the standard rate (%). % of Sonia s salary =,00 a year, which is a contribution of.0 each pay period..0 The pension contribution shown on Sonia s pay slip.. the actual amount Sonia s pay is reduced by Yes, you can pay Additional Voluntary Contributions (AVCs). AVCs are contributions you can make over the standard (%) contribution rate. Your AVCs build up in a defined contribution account, and you can choose to invest them in a range of funds that have been made available to Pace members. When you retire, you can use the money in your AVC account to provide extra benefits. Under current tax rules, you can take up to % of the value of your pension (including AVCs) as a tax-free lump sum and you can use the remainder to provide an income or taxable lump sum. As AVCs are a defined contribution benefit you can, if you want to, transfer your AVCs at retirement in order to access other options such as a variable income or a series of cash payments. These options are not available directly from Pace. You can decide how much to pay and you can also vary your AVCs. You also benefit from tax relief on your AVCs (up to a certain limit). Your AVCs will be deducted from your pay, rather than being paid through NICE Pensions. If you want to pay AVCs, fill in the start AVCs form on the pensions website. You can find out more about paying AVCs by reading the AVC fund guide for Pace Complete members on the Group s pensions website. The difference is made up of:.0 national insurance savings. tax relief Page

12 Section Being a member 0 What happens if I am absent from work? Family leave Family leave means maternity, paternity, adoption or parental leave. If you are on family leave, you will still be a member of Pace Complete and will be covered for the death-in-service benefits that are described on page. Your contributions to Pace Complete will be based on the actual pay you receive. However, your pension will still build up based on your full pay (the pay you were getting before you took family leave). If you do not receive any pay while on family leave, your contributions to Pace Complete will stop and you will not build up pension during this time. When you return to work, you may be able to pay any unpaid contributions and build up pension for that period. Please contact Payroll on your return to work, if you wish to pay any missed contributions. Ill health If you are too sick to work, you may qualify for ill-health benefits from Pace Complete. Please turn to Section, page for more details. Other periods of absence If you are on a career break or absent from work for any other reason than those described above, and you do not receive any pay during this time, your contributions to Pace Complete will stop and you will not build up any pension during this time. You will, however, continue to have a death-in-service benefit of x salary for as long as you remain employed by the Group. At a glance You can pay more into Pace if you want to build up a bigger pension read the AVC factsheet for more information. While you are on family leave, and so long as you continue to be paid and make contributions to Pace, you will build up pension during your absence. If you work part time, your benefits are based on your part-time pay. When you return to work, you may be able to pay any missed contributions and build up pension for that period. Please contact Payroll on your return to work if you wish to pay any missed contributions. What if I work part time? In Pace Complete, your pension is based on your pay throughout your membership. Your pension will be worked out in the same way as for members who work full-time (see page ), but it will be based on your part-time pay. Page

13 Section Retirement benefits 0 This section explains how your retirement benefits build up in Pace Complete and when you can take them. How does my pension build up? For each Scheme year (or part year) that you pay into Pace Complete, you earn a block of pension equal to.% (or /0th) of your Pay, payable at age. To protect the buying power of your pension, it is given an inflationary increase each year (up to a maximum of %). Your pension at age is the total of all the blocks of pension you have built up, plus these increases. What happens to my benefits from a Former Scheme? If you were a member of any one of the Former Schemes that merged in April 0 to become Pace, any pension built up in that Scheme before that date will be paid by Pace, in addition to the pension you build up in Pace Complete. See page under Terms you should know. Can I take a lump sum when my pension starts? Based on current tax rules, you can take up to % of the value of your pension as a tax-free cash lump sum. You will then receive a smaller pension. What other options are there? Big pension changes were introduced from April that give members of defined contribution pension schemes more flexibility and choice in how they use their pension funds on retirement. In order to access these flexibilities (such as taking your entire fund as a lump sum or as a variable income) you would need to transfer your benefits to a defined contribution pension scheme that can allow you to do this. If you are interested in this option, you should ask the Group Pensions Department for a transfer value. You should seek financial advice before going ahead with a transfer and in some circumstances, the Trustees will require you to confirm you have taken independent financial advice before paying the transfer. At a glance Your pension is worked out using a set formula: Pay 0, for each year that you are in Pace Complete. Your pension is given an inflationary increase each year. You can take part of your benefits as a tax-free cash lump sum. The normal pension age for Pace Complete is, but you can retire from age with the Group s consent. If you have benefits in Pace Essential/ Extra, these will be paid in addition to your pension from Pace Complete. Pension A pension is an amount of money paid to you, usually each month, for the rest of your life. You can start taking your pension, with the Group s consent, at any time after age, and you can choose to carry on working even while you are being paid a pension. Page

14 Section Retirement benefits How Pace Complete works Year : Your pension builds up based on your Year Pay. 0 Year : Your pension builds up based on your Year Pay. Plus you get an extra share your Year pension is revalued (increased) by inflation from April each year, up to a maximum of %. Year : Your pension builds up based on your Year Pay. Plus you get an extra share your Year and Year pension are revalued (increased) by inflation from April each year, up to a maximum of %. This continues until you take your pension at normal pension age or leave Pace Complete. Meet Sonia. When she joined Pace Complete her Pay was,000. Each year her pension is calculated as follows: Pay x /0 (accrual rate) = pension Year pension:,000 x /0 =. In Year Sonia s Pay increased to,000. In Year Sonia s Pay increased to,000. Year pension =,000 x /0 = 0 Year pension:,000 x /0 = 00 The pension she built up in Year is increased by inflation, which is, for example, %. This is added to Year s total which is increased by inflation, which is, for example, %.. + % =.. + % =. This is added to the pension built up in Year. Sonia s total pension at the end of Year : =,. Year total = 0 +. =. If Sonia retired at normal pension age () at the end of Year, her Pace Complete pension would be,. a year. Page

15 Section Retirement benefits 0 When can I take my pension? The normal pension age for Pace is. You have some options regarding when you take your pension, as described below. Can I retire early? Yes. With the Group s consent, you may retire early, at any time from age. (Some employees who were formally in the CIS pension scheme may be able to retire earlier than this. Please ask the Group Pensions Department for details.) If you retire early, your pension will be reduced to take account of the fact that it will be paid for longer. Can I retire later than age? Yes, but only if you remain employed by the Group. What happens to my pension if I continue working after? If you continue working for the Group after age, you can currently choose from the following three options: Continue building up pension until you leave service Stop paying contributions to Pace Complete and receive your pension immediately Stop contributing to Pace Complete and delay payment of your pension until a later date. This must be by the date you leave service. Please note, if you are under State Pension Age and you stop contributing to Pace Complete, and if you meet the criteria set by the Government for automatic enrolment, you may be enrolled into Pace Essential. Can I take my pension and continue working? Yes, from age you may be able to take your pension and continue working for the Group. If you decide to do this, please note that: You will not be able to build up any more pension in Pace Complete, but you will be able to join Pace Essential or Pace Extra Your death-in-service benefit will be x salary (the cover available to nonmembers), unless you join Pace Extra Your pension will be taxed under Pay As You Earn (PAYE). Will my pension be increased in retirement? After retirement, your pension will continue to increase each year in line with inflation, up to a maximum of.%. If you were a member of a Former Scheme (see page ), the increase that will apply to the part of your pension built up in the Former Scheme may be different. What happens if I also have benefits in Pace Essential or Pace Extra? When you retire you may have benefits in more than one section of Pace. You do not have to take Pace Complete benefits at the same time as your Pace Essential/Extra benefits. However, if you paid AVCs while you were a member of Pace Complete, they must be taken at the same time as your Pace Complete benefits. Your Pace Essential/Extra pension is calculated and paid in a different way to your Pace Complete pension see the pension guide for members of Pace Essential and Pace Extra on for more details. Page

16 Section Ill-health benefits Pace provides two levels of ill-health pension if you become too ill to ever work again. 0 What happens if I have a long-term illness and cannot return to work? In this case, you may be able to apply to retire early (before age ) and receive an unreduced ill-health pension. To qualify for an ill-health pension, you must have been a member of Pace for at least five years. This includes membership of Pace Essential or Pace Extra, as well as membership of the Former Schemes and Acquired Schemes (see page for details of Former Schemes and Acquired Schemes). You will also need the consent of the Trustees, who will consider medical evidence and decide whether you qualify for an ill-health pension, and what level of pension would be payable. At a glance If you cannot work due to illness, you may be able to take your pension early, without it being reduced. Depending on the severity of your illness, your pension may receive a boost from Pace. What happens if I am terminally ill? If you are terminally ill, and with consent of the Trustees who will consider medical evidence, you may be able to exchange all of your ill-health pension for a one-off, usually tax-free, lump sum payment. Your family will still get any pension they are entitled to in full (see Section ). Page

17 Section Ill-health benefits 0 Pace Complete ill-health early retirement pension There are two types of ill-health retirement: Partial ill-health pension If your medical condition is permanent and you are unable to do your normal job, now and in the future, you may be able to take your pension early. Your partial ill-health pension will be equal to the pension you have built up in Pace at the date of your early retirement. Total ill-health pension If your medical condition is permanent and you are unable to do any paid work except for remedial activity, now and in the future, you may be able to take your pension early. Your total ill-health pension will be equal to the pension you have built up in Pace at the date of your early retirement, plus an additional pension based on the years you had left until your normal pension age. This pension won t be reduced. You may be able to take some or all of your pension as a tax-free lump sum. You may be able to take some or all of your pension as a tax-free lump sum. The partial ill-health option is not available to members who have left Pace Complete. Any periods where you have received no pay due to illness will be excluded from the pension calculation. Any periods where you have received no pay due to illness will be excluded from the pension calculation. Page

18 Section Death benefits This section tells you about the benefits that Pace Complete gives to your family on death before or after retirement. 0 What death benefits are paid if I die while I am a member? If you die in service while you are paying into Pace Complete, the following benefits are payable: A lump sum (death-in-service benefit) x salary value of any AVCs A pension for your partner, payable for life 0% of the pension you had already built up in Pace 0% of the pension you would have built up if you had stayed in Pace Complete, based on half of the period between your date of death and age, and your average pay. A pension for your children % of your partner s pension (split between your children, if there is more than one). If you do not have a partner, the Trustees may pay a pension to any dependant(s), which may include your children. Please note: your partner s pension may be reduced if he or she is 0 or more years younger than you. Your children s pensions will be based on your partner s pension, before any reduction. The level of death-in-service benefit may be restricted or in some cases may not be payable. You will be notified if this is the case. Page

19 Section Death benefits 0 Who decides who will get my death benefits? Pace is run by a Board of Trustees (see Section, page ). When a member dies, the Trustees decide who should get benefits from Pace. This is to ensure that the payment does not attract Inheritance Tax. Because the Trustees need to decide who the benefits should be paid to, it is very important that you tell the Trustees how you would like them to be paid. You can do this by completing and returning a nomination form (which you can find on the pensions website) to the Group Pensions Department. It is also important to keep your nomination form up to date as your circumstances change. The Trustees will usually follow your wishes, but they are not bound by them. If you do not have a partner, the Trustees may pay a pension to any dependant(s), which may include your children. Partner Your husband, wife, registered civil partner or any dependant with whom you have been living in a relationship that the Trustees consider to be similar to marriage, and had been so at the date of your death for a continuous period of six months or more. What happens if I die after I have left Pace but before I have taken my pension? In this case, your partner will be entitled to 0% of your deferred pension (the pension that you left in Pace). This will include any inflationary increases that have been added to it, but it will be reduced if your partner is 0 or more years younger than you. Children s pensions are not payable, and if you do not have a partner, the Trustees may pay a pension to any dependant(s). If you have no dependant(s), the Trustees will pay a refund of contributions plus interest to a beneficiary. Children Your children under age, including stepchildren who are financially dependent on you when you die, and any legally adopted children. The Trustees may also pay a benefit to a child who is under age and in full-time education or training approved by the Trustees. At a glance Membership of Pace Complete includes a death-in-service lump sum equal to x salary. Pensions are payable to your family. Remember to update your nomination form so the Trustees know what your wishes are. This is available on the pensions website. Salary For the purpose of working out your death-in-service benefit, salary means your pay in the months prior to the date of death, or your basic annual salary at the date of death, if higher. Page

20 Section Death benefits 0 What if I die after I have taken my pension? If you die after you have taken your pension, Pace will pay the following benefits to your family: A pension for your partner, payable for life 0% of your pension (before you took any of it as a lump sum) A pension for your children % of your partner s pension (split between your children, if there is more than one) A lump sum (which is only paid if you die before your pension has been paid for five years) The balance of your pension payments in this five-year guarantee period. If you do not have a partner, the Trustees may pay a pension to any dependant(s), which may include your children. If this is paid, a children s pension will not be payable. Please note: your partner s pension may be reduced if he or she is 0 or more years younger than you. Your children s pension/s will be based on your partner s pension before any reduction. Page

21 Section Leaving benefits This section tells you what happens to your benefits if you leave Pace, or if you leave the Group. 0 What happens if I leave the Group before I take my pension? If you leave the Group, you will stop building up benefits in Pace. You will no longer qualify for death-in-service benefits from the Group. The options you have will depend on how long you were a member of Pace (including Pace Essential or Pace Extra), as explained below: If you were a member of Pace for less than three months If you were a member of Pace for between three months and two years If you were a member of Pace for more than two years You will receive a refund of your own contributions with interest, less deductions (equal to tax and any national insurance savings you received while you were a member). It will not include any contributions paid by the Group. You will have a choice between: You will have a choice between: A refund (as described on the left) Transferring your benefits to another registered pension scheme If you paid your contributions through NICE Pensions, your refund will be paid from Payroll. If you did not pay your contributions through NICE Pensions, then your refund will be paid from Pace. or Transferring your benefit to another registered pension scheme. If you do not choose to transfer within three months of being told what your options are, a refund will be paid to you. or Leaving your benefits in Pace Complete until you retire (known as deferring your pension ). Page

22 Section Leaving benefits 0 When can I take my deferred pension? If you leave your pension in Pace, you can take your pension between age and (with the consent of the Trustees). Please see Section for details of how your pension will be paid. Will my pension increase if I leave it in Pace Complete? Yes, your pension will be increased each April following the date you leave until the date it is paid, to help protect it against inflation (up to a maximum of % a year). If you are a member of a Former Scheme, the rate of increase that will apply to the Former Scheme part of your pension may be different than above. What happens if I leave Pace while I am still employed by the Co-operative Group? You will have the same options as described on page. You will remain eligible for death-inservice benefits ( x salary) as long as you remain employed by the Group. Please note: if you leave Pace Complete, you will not be able to rejoin it at anytime. However, you can join Pace Essential or Pace Extra and you may be automatically enrolled into Pace Essential, as described in Section, page. What happens to my AVCs if I leave Pace before taking my benefits? If you choose to receive a refund, as described on the previous page, your AVC fund value will also be refunded. Note that the refund from your AVCs will include any investment growth (or losses) this is slightly different to your ordinary contributions which do not include any investment growth (or losses). If you decide to transfer your benefits out of Pace, your AVC fund value, including any investment growth or losses, will be transferred as part of your transfer value. If you decide to leave your pension in Pace, your AVCs will remain invested until you decide to take your benefits from Pace. You will be able to continue to manage your AVCs online and change your investment choices if you want. Can I transfer my benefits out of Pace? Yes. You have a statutory right to transfer your benefits to another registered pension scheme after you have left Pace, subject to the Pace Scheme rules. If you are interested in this option, you should ask the Group Pensions Department for a transfer value. How do you work out my transfer value? The transfer value is worked out by the scheme actuary in a way that is set out by the Government. The transfer value is guaranteed for three months from the date it is calculated. After that, it will be recalculated and could increase or decrease, depending on market conditions. If you want to transfer to a defined contribution (DC) scheme you will need to take independent financial advice and may be required to provide written confirmation from your adviser before the transfer can go ahead. Page

23 Section Other information Other information What happens if I get divorced? State benefits If you get divorced from a marriage or registered civil partnership, your Pace benefits will be included as part of your assets. What are the State pension arrangements? The State provides two different kinds of pension: 0 What actually happens to your benefits depends on how the total assets of the marriage are split as part of the divorce settlement. If the Court orders the pension benefits to be shared between the couple, there are three options: Your pension rights can be offset against other assets Part of your pension rights can be earmarked and paid to your ex-spouse (which includes a civil partner) when you retire The value of your pension rights can be divided at the time of divorce (pension splitting). In this case, your ex-spouse s or civil partner s share will generally be transferred to another pension arrangement. Basic State Pension This is a flat-rate pension paid to everybody who has paid enough national insurance contributions during their working life. State Second Pension (SP) This is a top-up to the Basic State Pension, which is based on your actual or deemed earnings on which standard rate Class national insurance contributions are paid or treated as having been paid. Further details of State benefits, including how to find out how to obtain a forecast of your State pension, can be found on If you want more information, please contact the Group Pensions Department. Page

24 Section Other information 0 When are State pensions payable? State pensions are payable from State Pension Age. Your State Pension Age will depend on when you were born. Generally, your State Pension Age will be between and but there are some exceptions to this. There is a calculator on the gov.uk website that will tell you what your State Pension Age is likely to be ( State pensions and State Pension Ages are set by the Government and can change. Will I receive a State pension? You will receive a Basic State Pension if you have paid sufficient national insurance contributions over your working lifetime. You currently need qualifying years on your national insurance contribution record to qualify for a full Basic State Pension. If your number of qualifying years is less than, you will receive a proportionately lower Basic State Pension. Pace Complete is contracted out of the State Second Pension (SP). This means that you pay lower national insurance contributions while you are a member. In return, you will not build up pension in SP while you are a member of Pace Complete (although this depends on your overall income level while you were contracted out). On the other hand, Pace Essential and Pace Extra are contracted in to SP, so you will earn a pension from this part of the State scheme during your membership of Pace Essential and Pace Extra. However, you will pay full rate national insurance contributions. At a glance Membership of Pace does not affect your entitlement to the Basic State Pension. While you are a member of Pace Complete, you will not build up a State Second Pension. Use the gov.uk website ( to check your State Pension Age and to obtain a forecast of your State pension. Page

25 Section Other information How Pace is run 0 How is Pace set up and run? Pace is a registered pension scheme, whose details have been given to the Registrar of Occupational and Personal Pension Schemes. Pace is run by the Trustee Board, in accordance with the Trust Deed and Rules (the Rules) and in the interests of all members. The Trustee Board is currently made up of 0 Trustees, who are responsible for ensuring that Pace is managed effectively, that it complies with a wide range of legal and regulatory requirements and that it is able to pay all your benefits when they are due. The Trustees appoint professional advisers, including actuaries, legal advisers, investment managers and auditors, to help them. Of the 0 Trustees, there are three professional independent Trustees. The Co-operative Group (the Group) appoints three as Employer Nominated Trustees. Contributing members of Pace elect up to three Trustees, and pensioner members elect one Trustee. These four are known as Member Nominated Trustees. Money paid into Pace Complete is held in a trust, which means that the assets are entirely separate from the assets of the Group. Money paid into Pace Essential and Pace Extra is also held in a trust in individual retirement accounts for each member. Responsible investment policy The Trustees have requested that the investment managers take account of any environmental, social, or governance factors that they consider appropriate in carrying out their mandates, and to adopt a practice of engaging in discussions on such matters with those companies in which they invest. Investment managers are required to provide regular reports of such actions to the Trustees. The Responsible Investment policy is reviewed regularly, and commits the Trustees to disclosing the following information on the pensions website: Statement of Investment Principles, including the Responsible Investment policy Scheme s annual Report and Accounts Top 00 direct equity holdings Summary of voting records and engagement activities by investment managers (contained in an annual Report on Responsible Investment ) An annual statement of compliance with the Financial Reporting Council s UK Stewardship Code (also available from the FRC s website). In recognition of the development of its responsible investment policy, Pace has been awarded the highest Platinum ranking by the UK Sustainable Investment and Finance Association (UKSIF). Pace is one of only three UK private sector schemes to have achieved this. Page

26 Section Other information 0 Can Pace be closed or changed? The Group can give notice that it wishes to close Pace at any time. It can also, with the Trustees consent, change the Rules that govern how Pace is set up, including employee contributions requirements. If Pace is closed, the Trustees will use the assets for the benefit of members in accordance with the Rules and general pensions law. What information does Pace hold about me? In order to run Pace, the Group, the Trustees and their advisers need to hold and process information about you. This information is held both manually and on computer and may include sensitive data, such as your medical details. You can get further information by writing to: The Data Protection Manager The Co-operative Group FREEPOST MR Manchester MBA What if I have a complaint about Pace? Any problems with Pace can usually be sorted out by asking the Group Pensions Department for more information. If you are not satisfied with the response you receive, there is a formal dispute resolution procedure that can be used by anyone who has rights in Pace. For details and relevant forms, you can contact the Secretary to the Trustees, through the Group Pensions Department. What if I want financial advice? By law, no one connected with Pace can give you financial advice. If you would like financial advice before making any decisions about your membership of Pace, you should speak to an independent financial adviser (IFA). You should bear in mind that an IFA will charge for any advice given. To find an adviser in your area, visit The Money Advice Service is a free independent service set up by the Government, which provides unbiased money advice and can be found at or by calling At all times this personal information will be held and processed in accordance with the Data Protection Act. This Act gives you the right to inspect your record on request. This may involve payment of a small fee. Page

27 Section Other information Find out more 0 The pensions website, at contains lots of useful information about Pace. You can access lots of useful tools on the site, to help you to manage your pension. For example, you can go online to: Start paying AVCs or change your AVCs Obtain a nomination form to indicate who you would like to receive your lump sum benefits in the event of your death. You can find out more about Pace by clicking on Documents. This area of the website contains: Factsheets, giving you more information about various topics, including AVCs, NICE Pensions, and the differences between Pace Complete and Pace Essential/Extra Pace annual reports If you do not have access to the internet, you can request copies by phoning the Group Pensions Department. Their contact details are on page. While you are a contributing member, you will be sent an annual pension estimate, a member s newsletter and a statement about Pace s funding position. Newsletters A copy of the Trust Deed and Rules. Page

28 Some terms you should know 0 Accrual Rate This is the rate at which pension builds up in a defined benefit pension scheme. It is a fraction, for example /0. In Pace Complete your pension builds up each year using your Pay and an accrual rate. Acquired Schemes The following pension scheme members who were invited to join Pace from October : United, Yorkshire, Sheffield, Leeds, Plymouth, Brixham, Britannia and Lothian. Somerfield members could join from November. Average pay Defined contribution (DC) (Pace Essential and Pace Extra) This is a type of pension arrangement where the pension you receive at retirement is based on the contributions paid into your account and investment returns. At retirement, you use your account to provide an income or a lump sum. Dependant Someone who (in the Trustees opinion) is, or was at the time of your death, wholly or partly financially dependent on you. Former Scheme Also called revalued pensionable earnings. This is the annualised average of your pay, with inflationary increases applied to it. Either, the Co-operative Group (CWS) Limited Pension Fund (known as the Co-operative Group Pension Fund), the CIS Employees Pension Scheme, or the Co-operative Bank Pension Scheme. Children Former Scheme member Your children under age, including stepchildren who are financially dependent on you when you die, and any legally adopted children. The Trustees may also pay a benefit to a child who is under age and in full-time education or training approved by the Trustees. A member who was in the employment of an employer and building up benefits as a member of a Former Scheme as at April 0. Separate information has been provided to Former Scheme members with details of how their Former Scheme benefits are treated. Defined benefit (DB) (Pace Complete) The Group This is a type of pension arrangement where your benefit is linked to your pay and the length of your membership in the scheme. Final Salary and Average Earnings schemes are types of DB arrangements. Co-operative Group Limited, the Co-operative Banking Group and all Participating Employers of Pace. If you want to know whether your employer participates in Pace, please contact the Group Pensions Department. Normal pension age. Pay Also called pensionable earnings. This is your basic Pay, plus overtime and any other payments that are pensionable, excluding any bonus payments. Partner Your husband, wife, registered civil partner, same sex spouse or any dependant with whom you are in a relationship that the Trustees consider to be similar to marriage for a period of at least six months. Pensionable earnings Your pensionable earnings are made up of the parts of your earnings that you and the Group are required to pay contributions on. Some elements of your Pay, such as car allowance, are not included in your pensionable salary. See the definition of Pay above. Pensions website The pensions website at Registered pension scheme This is any scheme registered with HMRC. This includes occupational schemes, personal pension schemes, but excludes State Pension schemes. Salary For the purpose of working out your death-in-service benefit, salary means either your Pay in the months prior to the date of death, or your basic annual salary at the date of death, if higher. Service The length of time you have worked for the Co-operative Group ( the Group ). Trustees PACE Trustees Limited. The Trustees are the legal owner of the assets of Pace. Information on your Trustees can be found in Section under How is Pace set up and run? Page

29 Useful contacts 0 You can find out more about Pace and the options available to you on the pensions website for Co-operative Group employees: Co-operative Group Pensions Department For general enquiries about Pace Complete, or information about your own benefits, please contact the Group Pensions Department: Group Pensions Department Department 0 Angel Square Manchester M0 0AG Helpline: 0 00 (local rate) Pensioner welfare: 0 0 (local rate) Fax: 0 staffpensions@co-operative.coop Calls to 0 numbers will be charged at local call rates from a BT landline. Call charges from other companies and mobiles may vary and you may want to check this with your service provider. PACE Trustees Limited This is the trustee body which is responsible for managing Pace. PACE Trustees Limited Angel Square Manchester M0 0AG Legal & General For general enquiries about Pace Essential or Pace Extra, please contact Legal & General: Legal & General Trustee Services Team City Park The Droveway Hove BN PY Tel: 0 0 Fax: 0 cooppensions@landg.com Website: Whenever you contact Legal & General, please quote your national insurance number, which can be found on your payslip. If you are writing to Legal & General, you will need to refer to Pace or the Co-operative Group. Page

30 0 The Pensions Advisory Service (TPAS) The Pensions Regulator Department for Work and Pensions (DWP) This is an independent organisation that provides free information, advice and guidance on all pension-related matters. The Pensions Regulator regulates work-based pension schemes in the UK. It works with trustees, employers, pension specialists and business advisers to protect members benefits and encourage high standards in running pension schemes. You can find details of your local Jobcentre Plus office either on the internet or in your local phone directory. The Pensions Advisory Service Belgrave Road London SWV RB Tel: enquiries@pensionsadvisoryservice.org.uk Website: The Pensions Ombudsman If you have a problem with Pace that cannot be resolved through the normal dispute resolution procedure, you can ask for the matter to be referred to the Pensions Ombudsman. The Pensions Regulator Napier House Trafalgar Place Brighton BN DW Tel: Tel: Website: GOV.UK You can find more information on pensions and retirement planning, including State pensions and State Pension Age. Website: customersupport@tpr.gov.uk Website: The Pensions Ombudsman Belgrave Road London SWV RB Tel: enquiries@pensions-ombudsman.org.uk Website: Page

31 Important note 0 This guide is not intended to be a legal promise to members, as it is only a summary of the terms and conditions of Pace and reflects the pensions and tax legislation at the time the guide was written. If there is any conflict between this guide and the Rules, the Rules (as amended from time to time) will be overriding. If you want to see a copy of the Rules, or have any questions concerning the contents of this guide, please contact the Group Pensions Department. If you were a member of either the Co-operative Group Pension Fund, the CIS Employees Pension Scheme or The Co-operative Bank Pension Scheme on April 0 (a Former Scheme), any pension built up before that date in a Former Scheme will be payable in addition to the pension you build up in Pace. Separate information has been provided to Former Scheme members, with details of how these benefits will be treated. If you need any further information, please contact the Group Pensions Department. Large format available This summary is available in large print and as an audio file. Please contact the Group Pensions Department to request a copy. 0/ Page