BAE Systems 2000 Pension Plan Lump Sum AVC for Tax Year 2015/2016

Transcription

1 BAE Systems 2000 Pension Plan Lump Sum AVC for Tax Year 2015/2016 Each year, there is a project to invite members to pay a Lump Sum Additional Voluntary Contribution (AVC) from their March salary and bonus. This form should be used to make an Additional Voluntary Contribution (AVC) lump sum payment in March 2016 only. You can make a regular or one-off AVC at any other time by completing the 2000 Plan AVC Application Form which is available from the BAE Systems Pensions website. Paying the lump sum through Payroll The easiest method to pay the lump sum is for it to be deducted directly from your March salary by Payroll. In order to do this, we must receive your completed form by 12 February If you wish to pay a lump sum you need to follow the procedure below: Decide on the amount of lump sum that you would like to pay. The amount that you wish to pay must be within the overall maximum contribution limit of 100% of earnings, up to certain limits, including the need to cover National Insurance contributions and other regular deductions. Complete the appropriate sections of the Application to Pay AVC Lump Sum Form, sign it and return it to the Pensions Service Centre at the address shown on the form, or by to farnborough.pensions@equiniti.com. Please note we will be unable to action any request if the form is not signed. The Pensions Service Centre must receive your completed form by 12 February If the form is not received by this date we will have insufficient time to arrange for your lump sum to be deducted from your March salary. Only amounts up to the level of your March salary and bonus can be deducted through the Payroll system. If you wish to pay an amount in excess of this, you must send a cheque, as detailed below. Paying the lump sum direct to the Trustees by cheque If you miss the deadline or wish to pay an amount in excess of your March salary and bonus, it will be your responsibility to pay the lump sum by a personal cheque to the Trustees prior to 18 March Any payment by personal cheque will be for the gross amount with no tax relief, and it will be your responsibility to reclaim the tax from HM Revenue & Customs (HMRC) through your annual tax return. We will provide you with a letter to confirm that you have paid the contribution. Cheques should be made payable to Paymaster (1836) Ltd Re: BAE Systems 2000 Pension Plan. Please complete the appropriate sections of the Application to Pay AVC Lump Sum Form and return it to the address shown on the form. Lifetime Allowance If your total lifetime pension benefits are above the Lifetime Allowance ( LTA ) any excess may be subject to an additional tax charge when they are paid. For further information see your benefit statement, or the Plan Booklet. The current LTA is 1.25 million, which is broadly equivalent to a pension of 62,500 a year. From April 2016, the LTA is reducing to 1.0 million. If you think the value of your benefits may be close to or above the LTA either now or at retirement, you should consider seeking independent financial advice in order to determine the tax effectiveness of paying AVCs this year and in future years.

2 Annual Allowance Under HMRC rules, if your total annual money purchase contributions, the increase in your SBS fund value, and the annual increase in your defined benefit pension is more than the HMRC Annual Allowance ( AA ), any excess will be subject to tax at your marginal rate. See your benefit statement, or the Plan Booklet for more information. The period across which contributions are measured against the AA is called the pension input period. The Government announced in the Budget in July 2015 that all pension input periods will be aligned to correspond with the tax year and that special rules would apply for the 2015/2016 tax year. This means that there are two pension input periods for the 2015/2016 tax year. Any requests to pay an AVC Lump Sum will be tested against the special provisions and you will be notified if we find a problem. Valuing the SBS Fund for Annual Allowance purposes The Trustee is currently seeking clarification from HMRC regarding the method of valuing the SBS fund for Annual Allowance purposes and is currently taking a prudent approach reflecting Credited Interest earned as well as contributions paid. You should be mindful of this change when considering making a lump sum AVC into the SBS fund. Upon receipt of your form we will calculate your estimated Annual Allowance available and contact you if you may exceed this. Getting In Touch Should you have any questions regarding the AVC lump sum, you can telephone or the following contacts: Julie Cole ( ) julie.cole@equiniti.com Liz Driscoll ( ) liz.driscoll@equiniti.com Emily Sharp ( ) emily.sharp@equiniti.com We may need to contact you outside of standard office hours to confirm your instructions. We will not be liable for any lost investment opportunity if we are unable to contact you with any query. To assist us please supply all relevant contact details on the attached form as requested. The Trustees, the Company and the Pensions Service Centre are not permitted to offer you financial advice. If you wish to seek financial advice, you can visit to find out how to contact your nearest independent financial adviser and for details of how much their advice will cost.

3 APPLICATION TO PAY AVC LUMP SUM FORM 2015/2016 TAX YEAR If you wish to pay an AVC lump sum through your payroll, please complete sections 1, 2, 4 and 5 of this form and return it to the Pensions Service Centre by post or by 12 February 2016 at the latest. The address for the Pensions Service Centre is: PO Box 1194, Crawley, West Sussex, RH10 0FZ. Farnborough.pensions@equiniti.com If you wish to pay an AVC lump sum by cheque, please complete sections 1, 3, 4 and 5 of this form and return it with your cheque to the address below by 18 March 2016 at the latest. The address for cheque payments is: AVC Project Team, Equiniti, One Discovery Place, Columbus Drive, Southwood West, Farnborough, Hampshire, GU14 0NZ. Section 1 Plan name Member name NI number Date of birth Membership number BAE Systems 2000 Pension Plan Section 2 You can elect to pay the lump sum either solely from any bonus payment you may receive, or alternatively from both your bonus and salary for March As you may not know your bonus amount before submitting this form, you may specify an amount in pounds or state a percentage of bonus to be deducted. Any amount to be deducted from your salary must be stated in pounds, a percentage is not permitted. Any amount selected must be after taking into account normal deductions such as National Insurance contributions, any regular AVC s already requested, and other regular deductions. Please complete the appropriate sections below. (1 or 2, and if applicable 3) Or 1) Percentage of my March bonus (whole % only) % 2) Amount of my March bonus (whole only) And 3) Amount of my March salary (whole only)

4 Section 3 I wish to pay a lump sum AVC by cheque. I understand that the cheque will represent the gross amount and it will be my responsibility to reclaim the tax from HMRC through my annual tax return. Please enter the amount below. (whole only) Cheques should be made payable to Paymaster (1836) Ltd Re: BAE Systems 2000 Pension Plan. Section 4 Please complete this section to advise how your AVC lump sum is to be invested. Members of the BAE Systems 2000 Pension Plan can have their AVC lump sum invested with the Selected Benefits Scheme or with Standard Life. You should ensure that you are familiar with the current method of valuing the SBS fund before you make your choice. Please indicate your choice below. Selected Benefits Scheme (If SBS selected, please go straight to section 5) Existing Standard Life AVC Members Standard Life AVC Scheme (If SL selected please complete the relevant sections below as well as section 5) Your lump sum AVC will be invested as per your current investment instructions. I acknowledge that my AVC lump sum will be invested in the same funds as my existing AVC payments Signed Date / / New Standard Life AVC Members Please complete this section to advise how your AVC lump sum is to be invested with Standard Life. Please refer to the Standard Life Investment Choices Guide for more information on the fund choices from Standard Life, which you can download from More detailed information about the funds is available by contacting the Standard Life Helpline on or via If you do not indicate a choice of investment(s), your AVC lump sum will be invested in the Cash Lifestyle Profile. Complete one of a, or b. a) I wish my AVC lump sum to be invested in the Cash Lifestyle Profile

5 b) I wish my AVC lump sum to be invested as set out below: Fund name Fund Code Asset Class of Fund SL Pension Managed Fund FA Multi Asset SL Pension Property Fund FM Property SL Pension Mixed Bond Pension Fund (formerly called the Fixed Interest Fund) SL Pension UK Equity High Income Fund SL Pension Deposit and Treasury Fund (formerly called the Managed Cash Fund) SL Blackrock Aquila Over 15 Year Gilt Fund SL Blackrock Aquila 50:50 Global Equity Fund SL Blackrock Aquila HP UK Equity Fund Standard Life Investments Global Absolute Return Strategies Fund FP Bonds 88 G4 ND JO JP YX Cash Bonds Multi Asset SL Pension Ethical Fund G7 Multi Asset SL HSBC Amanah Fund JB SL Pension International Equity Fund FO Total 100% % to be invested (Fund split should be in whole % only) The normal Target Retirement Age for all investments is 65. If you wish to specify a Target Retirement Age for your AVCs other than 65, then please tell us here Target Retirement Age (New Standard Life AVC members only) Section 5 (To be completed by all members) Signed Date / / We may need to contact you regarding your AVC lump sum payment; please provide the following information: address Work telephone number Home telephone number Mobile telephone number All applications will be acknowledged by . Where no is available, acknowledgement will be made by telephone. If you do not receive a personal confirmation of receipt from us within five days then please contact us.