Explanation of the North Yorkshire Pension Fund (NYPF)

Transcription

1 Explanation of the North Yorkshire Pension Fund (NYPF) Annual Benefit Statement at 31 March 2017 for active members This document is for illustration purposes only. Please refer to your own Annual Benefit Statement for your pension benefit values. It is important that you read the notes below carefully so that you understand how your pension benefits have been calculated. The Local Government Pension scheme (LGPS) changed from a Final Salary Pension scheme to a Career Average Revalued Earnings (CARE) scheme on 1 April If you were a member of the Scheme on 31 March 2014, you automatically joined the new CARE scheme on 1 April You will continue to build up benefits in the LGPS (for as long as you continue to contribute). The figures projected in your statement are based on pay figures supplied by your employer, these are shown at the top of your statement. Pensionable Pay for year ending 31 March 2017 (used to calculate Career Average pension built up in 2016/17, as shown in Section 3) Final Salary Pay for year ending 31 March 2017 (used to calculate any Final Salary pension benefits accrued to 31 March 2014, as shown in Section 4) Career Average Pay Pensionable pay in the CARE scheme is the actual amount of pay on which you have paid pension contributions between 1 April 2016 and 31 March CARE pay includes: Basic Pay Shift Allowance Bonuses Standby Allowances All overtime This figure may also include an element of assumed pensionable pay (APP) for certain types of absences: Child related leave Reserve forces service leave Sick leave on reduced/zero pay APP is the pay you would have normally received if you had been working Final Salary Pay If you were a member of the LGPS prior to 1 April 2014 you have accrued pension benefits in the Final Salary part of the pension scheme. If no figure is shown on your statement it is because you joined the pension scheme after 31 March Pensionable pay in the Final Salary scheme is the amount of pay on which you have paid pension contributions between 1 April 2016 and 31 March In all cases the figure quoted above will always be your whole time equivalent. i.e. if you are part-time this is your full time equivalent pay. Final Salary pay includes: Basic Pay Shift Allowance Bonuses Standby Allowances Contractual Overtime Your employer will have returned a notional pay figure if you have had any of the following types of absence in 2016/17: Child related leave Reserve forces service leave Sick Leave You should contact your employer if you think either of your pay figures are wrong.

2 Explanation of the North Yorkshire Pension Fund (NYPF) Section 1: Personal Details Section 1 shows the personal details we hold for you, if any of the information is wrong please let us know as it could affect your pension benefits. Section 1: Personal Details Date of Birth Partnership Status Payroll Reference Number Post Number Date Joined Scheme in Employment Employer Section of Scheme at 31 March 2017 If you have more than one post in the pension scheme this will be the date you first joined the Scheme in this employment only. This is your current employer in relation to this employment only. Since there have been two sections to the CARE scheme, Main & 50/50. The section you were in as at 31 March 2017 is shown here. This statement only shows benefits for this job, if you have more than one post you will receive a separate statement for each. Useful information From members have had the option of either contributing towards the main section of the CARE pension scheme or pay half contributions in return for half the normal pension, this is known as the 50/50 section of the scheme. The 50/50 section is for use during time of financial hardship. More information can be found at 2

3 Annual Benefit Statement at 31 March 2017 for active members Section 2: Summary of Total Benefits at 31 March 2017 This page shows your benefits as at 31 March CARE pension and Final Salary pension benefits (if you were a member of the scheme prior to 1 April 2014) have been added together. A breakdown of each type of benefit is shown in Sections 3 & 4. Section 2: Summary of Total Benefits at 31 March 2017 Your benefits accrued at 31 March 2017 Benefits payable on your death in service (at 31 March 2017) Annual Pension Automatic Tax Free Lump Sum Death in Service Lump Sum Annual Survivor s Pension This is the value of your total estimated pension benefits as at This is an estimate of the automatic Final Salary lump sum. It is based on service up to and your current pay. This will be nil if you joined the Scheme after This is an estimate of the lump sum due if you die in service. The lump sum is three times your CARE pay (see Section 3 below to check your CARE pay). This is an estimate of the pension payable to your spouse or eligible partner if you die in service. If you are not married or we don t know whether you have a spouse or partner this figure will be nil. Other useful information If you are a man who is (or was) married, membership up to 31 March 1972 is reduced to 89% of its full length unless you are paying extra contributions to offset the reduction. The LGPS changed from a Final Salary scheme to a CARE scheme on Visit the LGPS member s website for more information including how your pension builds up each year and when you can take your pension. Death in Service Lump Sum If you die and you have other benefits in the LGPS (such as a deferred pension or a pension in payment) these will be taken into account when working out the death in service lump sum. The higher of the death lump sums may be payable rather than two payments. Annual Survivor Pension If you die in service a survivor s pension is payable to a spouse, registered civil partner or, subject to certain qualifying conditions, an eligible cohabiting partner and also to eligible children. This pension is payable immediately after your death and will increase every year in line with the cost of living. 3

4 Explanation of the North Yorkshire Pension Fund (NYPF) Section 3: Career Average Pension Benefits as at 31 March 2017 This is the total value of your Career Average benefits only as at This is the actual pay that you received in the main section from to The payable from date is your Normal Pension Age. Pension bought through an Additional Pension Contract. This is the actual pay that you received in the 50/50 section from Section 3: Career Average Pension Benefits as at 31 March 2017 (payable from ) Pensionable Pay for year ending 31 March 2017 in Main Section Pensionable Pay for year ending 31 March 2017 in 50/50 Section Amount of pension built up in year 2016/17 Main Section Pay / 49 = 50/50 Section Pay / 98 = Additional Pension bought Transfers in Total Career Average Pension built up in 2016/17 Total Career Average Pension at 31 March 2017 Career Average Pension built up from 1 April 2014 to 31 March 2016 Decrease for the cost of Total Career Average Pension + living (deducted 1 April 2016) + built up in 2016/17 = Total value of your Career Average Pension as at 31/3/2017 This is the total pension you have built up in the CARE part of the Scheme up to Total CARE pension you built up to had a cost of living decrease applied on in line with the Consumer Price Index (CPI) this was -0.10%. Total CARE pension built up in the Scheme between and This is the total pension you have built up in the CARE part of the pension scheme up to

5 Annual Benefit Statement at 31 March 2017 for active members Career Average Benefits how are they calculated? The LGPS changed to a CARE benefits scheme on 1 April At the end of each financial scheme year that you are a member of the CARE scheme, a pension equal to a 49th of your pensionable pay will be added to your pension account (a 98th will be added for any period in the 50/50 section). Inflation adjustments will be taken account of to ensure that your pension account keeps up with the cost of living. The figures in this section show the actual values you have built up so far in the CARE scheme. Other useful information Normal Pension Age If this is linked to your State Pension Age, your Normal Pension Age may change if your State Pension Age changes. You can draw your benefits before your Normal Pension Age (any time between 55 and 75) but actuarial reductions would normally be applied for early payment, so the figures quoted may be reduced if you take them before your Normal Pension Age. If you draw your pension benefits after your Normal Pension Age an actuarial increase will be applied. If you are over your Normal Pension Age at 31 March 2017, any actuarial increase is included in these figures. Pensionable Pay for year ending 31 March 2017 in Main Section If this field is blank on your statement, you have only been in the 50/50 section of the Scheme. Pensionable Pay for year ending 31 March 2017 in 50/50 section If this field is blank on your statement, you have only been in the main section of the Scheme. Cost of Living decrease applicable from 1 April 2016 The CARE pension you have built up in the Scheme to 31 March 2016 had a cost of living reduction applied on 1 April 2016, this was in line with the Consumer Price Index (CPI) and was -0.10%. The CARE Pension that you built up in 2016/17 was added to your pension account to give the total value of your CARE pension as at 31 March Underpin The following may apply to you but is not included in the amounts shown in this section of the statement. The underpin applies to you if you were: an active member on 31 March 2012, and you were within 10 years of your protected (Final Salary scheme) Normal Pension Age on 1 April 2012, and you haven t had a continuous break in active membership of a public service pension scheme of more than 5 years (after 31 March 2012), you ve not drawn any benefits in the LGPS before protected Normal Pension Age, and you leave with an immediate entitlement to benefits. The underpin will not apply to you if you elect to opt out of the Scheme before your protected Normal Pension Age. If you are covered by the underpin a calculation will be done at the date you cease to contribute to the Scheme, or at your protected Normal Pension Age if earlier, to check that the pension you have built up (or, if you have been in the 50/50 section of the Scheme at any time, the pension you would have built up had you always been in the main section of the Scheme) is at least equal to that which you would have received had the Scheme not changed on 1 April If it isn t, the difference will be added into your pension account when you draw your benefits. 5

6 Explanation of the North Yorkshire Pension Fund (NYPF) Section 4: Value of Final Salary Pension Benefits as at 31 March 2017 This is the total value of your Final Salary benefits only as at 31 March The Final Salary scheme ceased on 31 March If you joined the Scheme after this date this section on your Annual Benefit Statement will be blank. The payable from date is your Normal Pension Age. Section 4: Value of Final Salary Pension Benefits as at 31 March 2017 (payable from ) Final Salary Pay Annual Pension (for pre 1 April 2014 membership) Automatic Tax Free Lump Sum This is the pay that you received from to If you are part time this figure has been uprated to a full time equivalent. This is the estimated Final Salary pension that you have built up in the Scheme which is based on your membership up to This figure was calculated using your pay from to This is an estimate of the automatic Final Salary lump sum. It is based on service up to and your current pay. This will be nil if you joined the Scheme after

7 Annual Benefit Statement at 31 March 2017 for active members Final Salary Benefits how are they calculated? If you were a member of the LGPS prior to 1 April 2014 you have accrued pension benefits in the Final Salary part of the pension scheme. Your Final Salary pension benefits are worked out using your pensionable service up to 31 March 2014 (this is when the Final Salary scheme changed to a CARE scheme) and your current pay. Current pay is the pay that you received (excluding non -contractual overtime) between 1 April 2016 and 31 March If you are part time your service has been adjusted to account for the part time hours but your pay has been uprated to a full time equivalent. When you retire your Final Salary benefits will usually be worked out on the pay that you have received in your final year in employment. As we won t know what your final pay figure will be until you retire (which may be many years away) we will always use a current pay figure to calculate your Final Salary benefits. Final Salary Annual Pension For each year of membership built up to 31 March 2008, you receive a pension of 1/80th of your full time equivalent final salary pay. This figure will also include any Added Years that you are buying/have bought. If your Added Years contract is on-going, the proportion that you have bought up to 31 March 2017 is included in these figures. For each year of membership built up from 1 April 2008 to 31 March 2014, you receive a pension of 1/60th of your full time equivalent final salary pay. This figure will also include any Added Years/ Additional Regular Contributions that you are buying/have bought. If your Added Years/Additional Regular Contributions contract is on-going, the proportion that you have bought up to 31 March 2017 is included in these figures. Final Salary Automatic Tax Free Lump Sum For membership built up to 31 March 2008, you get an automatic tax free lump sum of 3 times your Final Salary pension. For membership built up from 1 April 2008 to 31 March 2014, there is no automatic lump sum for membership built up after March At retirement, you can give up some of your pension to increase your existing lump sum, or to create a lump sum if you don t get one automatically (i.e. if you joined the Scheme after 31 March 2008). Other useful information The Normal Pension Age in the Final Salary scheme was between 60 & 65 depending on membership in the Scheme. Your Final Salary Normal Pension Age may be lower than your current Normal Pension Age as this is now linked to your State Pension Age. You can draw your benefits at any time between 55 and 75. If you claim your pension before your Final Salary Normal Pension Age then actuarial reductions will usually be applied for early payment. So the figures quoted may be reduced if you take them before your Normal Pension Age. If you draw your pension benefits after 65 an actuarial increase will be applied. The figures quoted include any actuarial increase that would be paid on these benefits if you retire at your current Normal Pension Age. If you are aged over 65 at 31 March 2017 any actuarial increase up to 31 March 2017 is included in these figures. The increase is based on current actuarial factors which might change in the future. The factors in force now are lower than they were in This means your projected benefits at Normal Pension Age may be slightly lower than last year if you have a lot of final salary membership and a state pension age after 65. These factors are provided by the Government Actuaries Department (GAD) at a national level and are not locally decided. 7

8 Explanation of the North Yorkshire Pension Fund (NYPF) Section 5: Projections if you remain contributing to the Scheme until your Normal Pension Age (NPA) This is the total estimated value of your Career Average pension benefits earned up to normal pension age plus any Final Salary benefits that you accrued up to 31 March 2014 assuming your pensionable pay stays the same. If there is no information in Section 5, you have already reached your normal pension age and therefore benefits cannot be projected beyond 31 March 2017 (as we don t know when you ll claim your benefits), the benefits you could have claimed at 31 March 2017 are shown in section 2. Section 5: Projections if you remain contributing to the Scheme until i.e. to your Normal Pension Age (NPA) Normal Pension Age Pension at NPA: (Including projected Career Average Pension to NPA = and Projected Final Salary Pension to NPA = ) Automatic Tax Free Lump Sum at NPA Projected survivor s annual pension if you remain in the Scheme to NPA: (Including from the Career Average Scheme and from the Final Salary Scheme) This shows the level of pension you may receive if you remain in the same section (main or 50/50) of the scheme and contribute until your Normal Pension Age. This is an estimate using current pay. The date shown is your current Normal Pension Age; this is the date that you can draw your benefits without any actuarial reductions. If this is linked to your State Pension Age, your Normal Pension Age may change if your State Pension Age changes. This shows the estimated pension for a spouse or eligible partner (if you die in service). If you are not married or we don t know whether you have a spouse or partner this figure will be nil. This is an estimate of the Final Salary lump sum you have built up on service up to based on your current pay. This will be nil if you joined the LGPS after

9 Annual Benefit Statement at 31 March 2017 for active members Other useful information In the past the LGPS had a standard normal pension age of 65 with benefits available earlier for some long-serving members. Many of us will now have at least two different normal pension ages for different parts of our benefits. The earliest age at which you can leave employment to take your pension benefits is age 55. You can do your own estimates on your online record which will show any reductions that apply at different ages. Normal Pension Age The Final Salary Pension and Automatic Tax Free Lump Sum shown in this section are based on any service that you had prior to 1 April 2014 (this is known as the Final Salary scheme ). Your Normal Pension Age in the Final Salary scheme may have been lower than your current Normal Pension Age. If this applies to you, the Final Salary Pension and Automatic Tax Free Lump Sum shown include an actuarial increase for the period between your Normal Pension Age in the Final Salary scheme and your current Normal Pension Age (in the CARE scheme). The increase is based on current actuarial factors which might change in the future. The factors in force now are lower than they were in This means your projected benefits at Normal Pension Age may be slightly lower than last year if you have a lot of final salary membership and a state pension age after 65. These factors are provided by the Government Actuaries Department (GAD) at a national level and are not locally decided. Pension at Normal Pension Age Including projected CARE Pension to NPA Your projected CARE benefits are based on the section of the Scheme that you were in at 31 March 2017 (see Section 1). The amount has been calculated using the CARE pensionable pay figure(s) for year ending 31 March 2017 (Section 3). It assumes that this pay figure (or combined pay if you have been in both sections of the Scheme during 2016/17) will remain constant to your current Normal Pension Age. It does not include any future pay inflation or cost of living adjustments i.e. the projection is shown in today s money terms. The projected CARE benefits include the full amount of any Additional Pension Contributions or Shared Cost Additional Pension Contributions being bought. Projected Final Salary Pension to NPA Your projected Final Salary benefits have been calculated using the final salary pensionable pay figure for the year ending 31 March 2017 (Section 4). It assumes that this pay figure will remain constant until your current Normal Pension Age. It does not include any future pay inflation i.e. the projection is shown in today s money terms. The projected Final Salary benefits include the full amount of any Added Years or Additional Regular contributions being bought. Automatic Tax Free Lump Sum at Normal Pension Age For membership built up to 31 March 2008, you get an automatic tax free lump sum of 3 times your Final Salary pension. For membership built up from 1 April 2008, there is no automatic lump sum. At retirement, you can give up some of your pension to increase your existing lump sum, or to create a lump sum if you don t get one automatically (i.e. if you joined the Scheme after 31 March 2008). You do not need to decide on your lump sum options before retirement, but as a guide, every 1 of pension you give up will secure 12 of lump sum. The maximum amount of pension that you can convert will be provided by North Yorkshire Pension Fund when they receive notification of your intended retirement from your employer. In accordance with HM Revenue & Customs (HMRC) regulations, you must claim your pension benefits before your 75th birthday. Final Salary benefits stopped accruing on 31 March As your projected Final Salary benefits do not include any future pay inflation, the Final Salary benefit amounts will be the same as the amount shown in Section 4 (unless you have an on-going Added Years or Additional Regular Contributions contract, in which case, the full amount will be included in the projection to Normal Pension Age). Projected survivor s annual pension if you remain in the Scheme to NPA The survivor benefits are calculated based on the Final Salary survivor benefits accrued to 31 March 2014 (if any), plus any Added Years that you are buying/have bought plus any Additional Regular Contributions that you are buying/have bought that include a survivor s benefit, plus the survivor benefits due under the CARE scheme. It assumes that you remain an active member of the Scheme to your Normal Pension Age and that your pensionable pay will remain constant until your current Normal Pension Age. It does not include any future pay inflation or cost of living increases i.e. the projection is shown in today s money terms. If you are single (or your Partnership Status is recorded as single), the Annual Survivor s Pension field on your statement will be blank. If you have declared that you have a cohabiting partner (shown as Declared Partnership in Section 1), the survivor s pension is based on your membership in the Scheme after 5 April 1988 (unless you have elected to pay additional contributions for your pre 6 April 1988 membership). If you are married or in a civil partnership (or your Partnership Status is recorded as Married/Civil Partnership), the survivor s pension is based on all of your membership. Pensions are also payable to eligible children. 9

10 Explanation of the North Yorkshire Pension Fund (NYPF) Section 6: Current Nomination of Lump Sum Death Benefit This is the person or persons that you have nominated to receive your lump sum death benefit in the event of your death, along with the percentage of the benefit that you would like them to receive. Section 6: Current Nomination of Lump Sum Death Benefit Name of Nominee % of Benefit If no nomination details are shown you have not nominated anybody to receive your lump sum death benefit. By completing a nomination form your lump sum death benefit is usually excluded from any calculation of Inheritance Tax. If you die within 10 years of retirement, a smaller lump sum death benefit is payable. Please note that the NYPF retains absolute discretion as to whom any death grant is paid to. Changing your nomination To register a nominee(s) or to change your nomination details, please download a form from the NYPF website or contact the Pensions Section. 10

11 Annual Benefit Statement at 31 March 2017 for active members Section 7: Annual Allowance at 31 March 2017 Section 7: Annual Allowance at 31 March 2017 Annual Allowance for Pension Input Period (PIP) of 2016/2017 is a maximum of 40,000 (please read the explanatory notes for further information). Pension Input Amount (PIA) for 2016/2017 PIP for this post The Annual Allowance is the amount by which the value of your pension benefits may increase in any one year without you having to pay a tax charge. The pension savings year runs from 6 April 2016 to 5 April 2017 and is called the pension input period. The Annual Allowance is currently capped at 40,000 but you may have a reduced limit known as the Tapered Annual Allowance if your taxable income is above 110,000. You will be contacted separately if you have exceeded the standard Annual Allowance limit in 2016/17. If your taxable income is over 110,000 then you will need to assess whether you have a tax liability. Please see for more information. 11

12 Explanation of the North Yorkshire Pension Fund (NYPF) Annual Benefit Statement at 31 March 2017 for active members Additional Information Increasing Your Benefits Additional Pension Contributions (APCs) You can buy extra pension by paying APCs. You can choose to pay regular payments over a period of time or pay a one-off lump sum. The maximum amount of additional pension you can buy from April 2017 is 6,755 (this figure will increase each year in line with the cost of living). This provides a pension for you but not for any dependants. APCs replace Additional Regular Contributions (ARCs), however if you have an existing ARCs contract this will continue. Please visit the NYPF website for further information. Additional Voluntary Contributions (AVCs) As an alternative to additional pension (or even in addition to) you can pay AVCs via the Prudential, NYPF s chosen in-house AVC provider. AVC benefits may be taken as tax-free cash, subject to HMRC limits, or can be used for pension only, or a combination of tax-free cash and pension. Any pension that you buy in the LGPS is index linked. The following points show how income tax relief on AVCs can help pay for your retirement: If you pay tax at 20%, 100 of AVCs only costs you 80, for the 2017/2018 tax year If you pay tax at 40%, 100 of AVCs only costs you 60, for the 2017/2018 tax year Please visit the NYPF website for further information. A summary of the main features of an AVC can be found here. If you are already paying AVCs they are not reflected in your Annual Benefit Statement; full details will however, be provided in a separate AVC benefit statement issued by the Prudential. If you are thinking of increasing your benefits in this way, please contact the Prudential on Employer Contribution Rates Your employer pays the vast majority of the costs to cover your future benefits. For details of your employer s contribution to the NYPF visit the home page of the NYPF website where you will find Employer contributions in the Latest Updates area. Contact the North Yorkshire Pension Fund - pensions@northyorks.gov.uk Website - Telephone - Pensions help and information line Post North Yorkshire Pension Fund County Hall Northallerton DL7 8AL Opening Times: 8:30am to 5pm (4:30pm on Friday) Other Formats If you require this statement in a different format such as: large print, Braille, audio or need help understanding it in your first language, please call (01609) or pensions@northyorks.gov.uk Data Protection The Data Protection Act 1998 requires us to keep information about you securely. It also requires us to keep accurate information and keep it up to date. You can help us to do this by telling us when the details we hold about you change. We also have a duty to protect the public purse; in order to do so we share information with other public organisations to tackle fraud.