ELECTRONIC DATA SYSTEMS RETIREMENT PLAN. Plan Booklet. Applicable to Rolls-Royce Section Members

Transcription

1 ELECTRONIC DATA SYSTEMS RETIREMENT PLAN Plan Booklet Applicable to Rolls-Royce Section Members May 2016

2 CONTENTS Page 1. INTRODUCTION DEFINITIONS ELIGIBILITY AND ENTRY INTO THE PLAN CONTRIBUTIONS RETIREMENT BENEFITS PENSION AT NORMAL RETIREMENT DATE EARLY RETIREMENT AFTER NORMAL RETIREMENT DATE CASH OPTION PAYMENT OF PENSIONS BENEFITS ON DEATH IN SERVICE IN RETIREMENT AFTER LEAVING LEAVING THE PLAN ADDITIONAL VOLUNTARY CONTRIBUTIONS STATE PENSION BENEFITS ADDITIONAL INFORMATION ABSENCE FROM WORK WHAT HAPPENS IF I AM A PART-TIME WORKER? WHAT ELSE SHOULD I KNOW?... 17

3 1. INTRODUCTION This booklet describes the benefits provided by the Electronic Data Systems Retirement Plan ( the Plan ) for members who are included in the Rolls-Royce section. The Plan offers a comprehensive package of retirement and death benefits for you and your family. The Plan provides an income for you in retirement and valuable financial security for you and your family while you are a member of it. The Plan is set up under trust, which means that assets are kept completely separate from those of the Company. This booklet (which applies from May 2016) is intended to give an outline of the terms of the Plan as laid out in the Trust Deed and Rules, together with additional information about its administration and your rights under the Plan. We hope you find it straightforward and informative. It cannot cover everything that is in the Trust Deed and Rules. If you wish to you can inspect the Trust Deed and Rules by contacting EDS Pensions Administration (see page 20 for contact details) or by looking on the member website at Should there be any discrepancies between this booklet and the Trust Deed and Rules the latter will prevail. You should note that if you have transferred benefits from any other scheme then any special terms would have been notified to you. If you need any information on these you should contact EDS Pensions Administration. This booklet also describes the State Pension Scheme on page 16, since in planning for your retirement you should take account of State pension benefits in addition to benefits from the Plan. You should also note that because of recent legislation: (a) (b) (c) you may have to take independent advice (i) before you consider a transfer to another scheme to flexibly access any of your benefits, or (ii) take up any option (if available) to convert any benefits into flexible benefits in relation to any benefits under the Plan that may be on a money purchase basis the value of any pension will depend on several factors including the amount of contributions paid, any cost of exercising any right to transfer the benefits, any charges payable, the age at which the benefits can be accessed, performance of investments and any cost of converting the benefit into an annuity; and if appropriate there is a free and impartial Government service that helps you understand retirement options called Pension Wise. Pension Wise does not recommend any products or tell you what to do. Tel: Individual circumstances change. To ensure that your benefit entitlement is correctly recorded, please keep EDS Pensions Administration (see page 20 for contact details) updated on any changes in your circumstances, for example, if you move house, get married or have a child. Please take time to read this booklet and keep it in a safe place in case you need to refer to it again. If you require any further information or assistance about the Plan, you are welcome to contact EDS Pensions Administration. Alternatively you may find the information you need on the member website at See Further Information section on page 20 for contact details. PLEASE KEEP THIS BOOKLET IN A SAFE PLACE FOR FUTURE REFERENCE 1

4 2. DEFINITIONS Annual Allowance (AA) The maximum value an individual s pension benefits can increase in a year. If exceeded, a tax charge will be payable. The AA is set at 40,000 for 2016/2017 but is reduced for those with higher incomes (generally 150,000 and above) by 1 for every 2 of income over 150,000 until the allowance reaches 10,000. The increase in value of benefits is established by the increase in their capital value (being calculated as 16 for each 1 increase in pension). Capital Value The value of your pension benefits for the Lifetime Allowance. To calculate the Capital Value of your benefits under the Plan you multiply the pension you will receive on retirement by 20. If you have paid any AVCs you add in the value of these. Child For Plan purposes, a Child is a child of the member (including a stepchild dependent on you or a legally adopted child) who is under the age of 18 (or 23 and receiving full-time education or full-time vocational training). Company HP Enterprise Services UK Ltd and any subsidiary or associated company whose employees are included in the Plan. EDS Earnings Cap The maximum earnings figure on which contributions can be paid or benefits calculated. For the tax year 2016/2017 the EDS Earnings Cap is 150,600. The EDS Earnings Cap may not apply to you if you have transferred in from a Previous Scheme or if it did not apply to you. Final Pensionable Salary The greater of: the annual rate of basic salary at Normal Retirement Date or earlier date of retirement or leaving, and the highest annual average of total basic salary in any consecutive period of 36 months in the last 10 years prior to Normal Retirement Date or earlier date of retirement or leaving less in each case the Lower Earnings Limit applicable to the same period but ignoring the increase in the Lower Earnings Limit at the beginning of the tax year immediately preceding the date of determination of Final Pensionable Salary. Final Pensionable Salary will be subject to the EDS Earnings Cap. Guaranteed Minimum Pension (GMP) That part of your pension (and any pension paid to your spouse) which approximates to the pension you would have earned under the State Earnings-Related Pension Scheme (SERPS) if you had not been contracted-out of SERPS. Lifetime Allowance (LA) The maximum value of an individual s pension benefits from all sources. If exceeded, a tax charge will be payable. The LA is set at 1 million for 2016/2017. The value of pension benefits is their Capital Value. 2

5 2. DEFINITIONS (cont d) Lower Earnings Limit An amount fixed by the State at the beginning of each tax year. It is approximately equal to the single person s basic State pension. For the tax year 2016/2017 the Lower Earnings Limit is 5,824. Normal Retirement Date Your 65 th birthday. Pension Accrual Rate The rate at which you accrue benefit. Your Pension Accrual Rate under the Plan is 1.70% per annum except for any period where you contribute at 6.60% it shall be 1.45%. Pension Commencement Lump Sum (PCLS) A lump sum, currently tax free, which you can elect when your pension is paid to you upon retirement. Pensionable Salary The annual rate of your basic salary from time to time, less the Lower Earnings Limit in force on the same date. For the purpose of determining contributions in section 4 of this booklet, Pensionable Salary is determined at the date of joining and on each 6 April. Pensionable Salary is unaffected by any election you make for childcare vouchers. Pensionable Salary is subject to the EDS Earnings Cap. Pensionable Service Number of years and complete months of your contributory membership of the Plan. Plan The Electronic Data Systems Retirement Plan. Previous Scheme The Rolls-Royce Pension Fund and the Rolls-Royce Ancillary Benefits Plan. State Pension Age Age 65 for males born before 6 December 1953; Age 60 for females born before 6 April 1950; Phased between ages 60 and 65 for females born after 5 April 1950 and before 6 December 1953; Phased between ages 65 and 66 for people born after 5 December 1953 and before 6 October 1954; Age 66 for people born after 5 October 1954 and before 5 April 1960; Phased between ages 66 and 67 for people born after 5 April 1960; Increased to age 67 for individuals born between 6 March 1961 and 5 April Trustee A trustee company, EDS Trustee Limited. Trust Deed and Rules The legal documentation, executed in the form of a deed, which establishes and regulates the running of the Plan and sets out the rules for its operation. 3

6 3. ELIGIBILITY AND ENTRY INTO THE PLAN Who is in the Plan? You are included in the Rolls-Royce section of the Plan if you were previously a member of the Previous Scheme. Death in service benefits will be subject to such medical and other requirements as may be required in connection with any insurance policy(ies) the Trustee has effected to secure these benefits. Can I leave the Plan while still remaining in employment? Yes, you may leave the Plan at any time. You will need to contact EDS Pensions Administration if you wish to opt-out of the Plan (see page 20 for details). However, if you choose to opt-out of the Plan you should remember that you will not only miss out on your pension benefits but also on the spouse s and children s pension payable on your death in service (see page 12 for further details). You will still be covered for the lump sum death in service benefit (under separate trust), which is not conditional upon being a member of the Plan. In other respects your entitlements will be the same as if you have left employment. Can I rejoin the Plan? No, if you leave the Plan and you subsequently change your mind you will not be able to rejoin the Plan. You may be eligible to apply for membership of the HP Investment Scheme. Details are available from the Retirement section of Total Rewards Can I transfer benefits from another pension arrangement? No, the Plan does not normally accept individual transfers into the Plan of benefits from previous pension arrangements. 4

7 4. CONTRIBUTIONS What do I pay? Your contribution to the Plan is 8.10% of your Pensionable Salary unless you elected on 6 April 2016 (and it was agreed) that you pay 6.60%. You will receive full tax relief on your contributions to the Plan at your highest rate of tax. Contribution Example Mr. Smith has a Pensionable Salary of 28,000 per annum or 2,333 per month (to the nearest pound). His monthly contribution (based on 8.10%) and the actual cost to him (net of basic rate tax of 20%) is: Monthly Contribution Actual cost to you (net of tax) ( 2,333 x 8.10%) ( x 80%) Previously the Plan was contracted-out of the second tier of the State Pension Scheme (S2P). This meant you paid National Insurance contributions at a reduced rate. With effect from 6 April 2016 contracting-out has ceased. 5

8 4. CONTRIBUTIONS (cont d) How much does the Company pay? The Company pays the balance of the cost of the Plan. The Plan Actuary regularly assesses the funding position of the Plan, by undertaking actuarial valuations in which the assets of the Plan (Company contributions, member contributions and the return achieved on the Plan investments) are measured against the present and future liabilities (payments to members and beneficiaries). The Plan Actuary agrees the level of contributions with the Trustee and the Company. The Company is then required to pay to provide the benefits payable out of the Plan, as described in this booklet. Can I pay more? Yes, the Plan offers you the facility to pay additional voluntary contributions (AVCs) towards providing extra tax free cash or pension on top of your Plan benefits when you retire. Depending upon your circumstances at retirement you will be given the option of tax free cash or you can convert your AVCs into a pension on the open market. Please see page 10 and page 15 for more details on AVCs. You can also pay one-off AVCs by having a payment deducted from your salary. You will need to contact EDS Pensions Administration to do so. How much can I pay? You can now pay up to 100% of your total gross taxable earnings into the Plan each year. Subject to the Annual Allowance (AA) you will receive tax relief on your contributions. It is important that you carefully monitor how much you pay into your AVCs, especially if you are aiming to maximize your tax free cash via AVCs. If your AVCs are marginally higher than you are able to take as tax free cash you will be left with a small AVC fund which in some cases will provide you with a negligible additional pension. Do I have to take my AVC benefits at the same time as my main Plan benefits? Yes What AVC investment options are there? The Trustee offers a number of AVC investment options, details of which can be obtained on the Retirement section of Total Rewards if you are an active member or from EDS Pensions Administration (see page 20). Important things to consider before paying AVCs. Before deciding whether to make AVCs you should consider whether they would represent the best form of investment in your circumstances. AVCs offer a tax-efficient and secure way of providing additional pension and will be of particular interest to anybody who hopes to retire before the Plan s Normal Retirement Date. In addition, you are able to take tax free cash from your AVCs (see page 10 for further details). However, it may be that some other investment, accessible before you reach retirement age, would be preferable in certain circumstances. Alternatively you can make your own arrangements. You are able to make your own pension arrangements whilst being a member of an occupational pension scheme. The Trustee and the Company would recommend independent financial advice to anybody who is thinking of making this kind of investment (see page 20 for advice on finding an Independent Financial Adviser). 6

9 5. RETIREMENT BENEFITS 5.1 PENSION AT NORMAL RETIREMENT DATE What is my Normal Retirement Date? Your Normal Retirement Date is your 65 th birthday. How is my pension calculated? Your pension is based on a formula that uses your Pension Accrual Rate, your Pensionable Service and your Final Pensionable Salary. Pension Example Mr. Jones joined the Plan in April He retires in April 2016 on a Final Pensionable Salary of 35,000. His pension would be calculated as follows upon retirement (on basis his Pension Accrual Rate is 1.70%): = 1.70% x 20 years x 35,000 = 11,900 pa If you transferred your benefits from the Previous Scheme any calculation will also take into account the additional benefit that is appropriate. It is important to emphasise that your benefits at the point you retire will be tested against the Lifetime Allowance (LA). Should the value of your benefits exceed your available LA at retirement the Plan administrator will make you aware of the options available to you and the tax charges that are due. Typically, the Plan would pay the tax charge on your behalf and the benefits payable to you from the Plan would be reduced to recoup the tax paid. 7

10 5. RETIREMENT BENEFITS (cont d) 5.2 EARLY RETIREMENT Can I retire early? Yes. You can retire at any time after your 50 th birthday (or earlier, subject to Company and Trustee approval and to legislation requirements, if you are in ill health). If you have left the Plan and so no longer contribute to it, you can retire anytime after your 55 th birthday (if you are in ill health you may be able to retire earlier, subject to Company and Trustee approval and to legislative requirements). How is my pension calculated if I retire early? Your pension will be based on completed Pensionable Service and Final Pensionable Salary at the date you retire with a reduction applied. This reduction is currently 3% for each year you retire below Normal Retirement Date but is subject to change on the advice of the Plan Actuary. The reduction is applied to allow for the fact that you are retiring early and therefore your pension is likely to be paid for longer. If retirement is with the agreement of the Company (the Company s prior formal written agreement as confirmed by HR), the reduction for early payment will not be made if you are retiring at or after age 60. If you are retiring below the age of 60 with the agreement of the Company, the reduction will be made only over the period to age 60. At the Company s discretion, any entitlement for an unreduced pension under the Previous Scheme can be taken into consideration when deciding whether the agreement of the Company is given. If you think that you may be entitled to early retirement with the agreement of the Company, you should contact the Pensions Department (and not your line manager). Leaving the company via Expression of Wish (as part of a Workforce Reduction Program) or via a Compromise Agreement does not constitute early retirement with the agreement of the Company. Special considerations apply if you are compulsorily retired because, in the opinion of the Company, (a) your disability renders you permanently totally incapable of employment in any regular full time capacity with the Company or any other employer in any capacity or (b) you are likely through ill-health or infirmity to be permanently incapable of carrying out your normal duties or reasonable alternative duties with the Company, but are capable of employment with another employer. Where (a) applies there shall be paid an immediate pension unreduced and based on the service you could have completed to Normal Retirement Date together with (subject to any legislative requirements), where retirement takes place not less than one year before Normal Retirement Date, an amount equal to 1 ½ times your Final Pensionable Salary. Where (b) applies there shall be paid, if you so request, an immediate pension equal to the greater of: three quarters of your pension based on the service you could have completed to Normal Retirement Date, and the pension as described in the first two paragraphs of this section. If you were a member of the Previous Scheme prior to 1 October 1991 you may elect that your lump sum death benefit (under the separate trust) continues until Normal Retirement Date. Further details are available on request but essentially the amount must be a multiple of 1,000 and not exceed the amount of lump sum death benefit applicable at your date of retirement. 8

11 5. RETIREMENT BENEFITS (cont d) Pension Example Mr. Jones joined the Plan in April 1996 and retires early from the Company in April 2016, at age 62, on a Final Pensionable Salary of 35,000. His pension would be calculated as follows upon early retirement (on basis his Pension Accrual Rate is 1.70%): = 1.70% x 20 years x 35,000 = 11,900 pa This pension is reduced by 9% (3 years at 3%) to allow for the fact that the pension is paid 3 years early: = 11,900 ( 11,900 x 9%) = 10,829 pa Do I have to take all my benefits if I retire early? No. If you wish you may take part of your pension (subject to the normal early retirement terms) and defer the rest to a later date, known as flexible retirement. You can also take flexible retirement if you remain employed with the Company, in which case you may be offered membership of another arrangement but you will accrue no further Pensionable Service in the Plan. 5.3 AFTER NORMAL RETIREMENT DATE Can I work beyond my Normal Retirement Date? Yes, provided you have the agreement of the Company. What options do I have? You can continue your membership of the Plan up to the age of 75. Contributions will continue to be paid and you will accrue further pension. Alternatively you could cease your membership of the Plan and start to draw your retirement benefits. You will become a pensioner of the Plan and you may join the HP Investment Scheme (a defined contribution scheme) if you want to earn more pension. Your final option is to cease your membership of the Plan, but wait until you actually retire before taking your pension. If you do this your eventual pension will be increased to reflect the fact that it will start to be paid after your Normal Retirement Date. You may join the HP Investment Scheme (a defined contribution scheme) if you want to earn more pension. 9

12 5. RETIREMENT BENEFITS (cont'd) 5.4 CASH OPTION Can I take cash on retirement? Under current legislation, you can elect to exchange part of your pension on retirement for a tax-free cash lump sum, generally referred to as a Pension Commencement Lump Sum (PCLS). How much PCLS can I take? The maximum tax free cash you can take is 25% of the Capital Value of your pension benefits, including any AVCs you have paid. For most members, legislation caps the maximum amount of tax free cash to 25% of the LA. When calculating the value of benefits allowance must be made for the reduction in pension by virtue of taking a PCLS. Prior to 6 April 2006 cash was calculated as 3.75% of Pensionable Salary for each year of Pensionable Service, subject to certain legislative limits in place at the time. If your cash entitlement up to 5 April 2006 exceeds 25% of the Capital Value as at that date, at retirement you can take this cash and 25% of the Capital Value of your pension benefits accrued after 5 April If you have paid AVCs you can take some or all of these as a PCLS depending on the size of fund you have built up. The value of your AVCs will determine whether you reduce or remove the reduction in your pension when taking a PCLS. It is important that you carefully monitor how much you pay into your AVCs if you are aiming to maximize your PCLS via AVCs. If your AVCs are marginally higher than you are able to take via a PCLS you will be left with a small AVC fund which in some cases will provide you with a negligible additional pension. The EDS Pensions Administration will set out your options in the correspondence you receive prior to your retirement and can assist you with information regarding AVC payments. How will taking PCLS alter my pension? Your pension will be reduced by a factor determined by the Actuary. The rate is adjusted according to your gender and the age at which you retire. The reduction in your pension will depend on the amount of PCLS you take and whether some of this is provided by AVCs. Trivial commutation It is also possible to take your pension benefit fully in cash where the value of your pension from the Plan is less than 10,000 or the total of your accumulated benefits from all pension arrangements is less than 30,000. This is available if you retire between the ages of 55 and

13 5. RETIREMENT BENEFITS (cont d) 5.5 PAYMENT OF PENSIONS When and how will my pension be paid? Your pension will be paid monthly in advance. It will be paid into a bank account or building society account of your choice. If you elect to take a PCLS on retirement, this will be paid directly to your bank account or building society account. Will my pension increase in payment? Yes, your pension will be increased each year to help offset the effects of inflation: Your GMP relating to service from 6 April 1988 will be increased with inflation up to 3% each year. Your Plan pension in excess of your GMP will increase at a minimum of 3% per annum for that part accrued prior to 6 April The portion accrued between 6 April 1997 and 5 April 2006 will increase in line with the lower of the rise in the Retail Prices Index (RPI) and 5% per annum. The portion accrued from 6 April 2006 will increase in line with the lower of the rise in RPI and 2.5% per annum. The State no longer pays any increases to GMP after 6 April The Trustee, in conjunction with the Company, will consider the award of greater increases, subject to the financial strength of the Plan being adequate to sustain them. Pension increases will take effect on 1 April each year. A proportionate increase will be granted in the case of pensions which came into payment during the preceding year. 11

14 6. BENEFITS ON DEATH 6.1 IN SERVICE What benefits will be paid if I die before retirement? If you die in Pensionable Service while employed by the Company, the benefits payable will be: A lump sum of 4 x Pensionable Salary (but without the Lower Earnings Limit deducted). This is paid out of a trust that is separate from the Plan. A return of your contributions to the Plan. The refund will include a refund of your AVC fund. A spouse s pension of 30% of your Pensionable Salary. A children s pension of 10% of your Pensionable Salary for each Child up to a maximum of three. This pension will be doubled if no spouse s pension is payable. For the purposes of calculating death in service benefits the annual rate of your basic salary (subject to the EDS Earnings Cap) at the date of death will be used if higher than your Pensionable Salary. 6.2 IN RETIREMENT What benefits will be paid if I die after I retire? If you die within 5 years of commencement of your pension (and you are not over age 75), a lump sum will be paid equal to the instalments of your own pension which would have been paid from the date of your death to the end of the 5 year period. In addition, if your spouse survives you, they will receive a pension for the rest of their lifetime of one half of your own pension, after adding back any pension you might have exchanged for a PCLS on retirement. Example: Mr Jones has the option of a pension of 10,000 p.a. or a pension of 6,000 and tax free cash of 48,000. In the event of his death the spouse s pension would be based on the full pension, in this example a spouse would receive a pension of half of 10,000 p.a. On your spouse s subsequent death, or if no spouse s pension is payable on your death, children s pensions will be payable of one third of the spouse s pension for each Child up to a maximum of three. 12

15 6. BENEFITS ON DEATH (cont d) 6.3 AFTER LEAVING What benefits will be paid if I die after leaving the Plan, but before retirement? If you die after leaving the Plan but before starting to receive a pension on your Normal Retirement Date, your contributions (if any) will be refunded. In addition, your AVC fund is refunded. A spouses pension is also payable of one half of your benefit on leaving the Plan, including the increases received up to the date of death. See section 7 for details of your benefits on leaving the Plan and the increases to it. Notes: Dependant s Pension If no spouse s pension is payable, a pension not exceeding the pension that would have been paid to a spouse may, at the Trustee s discretion, be awarded to a person who is dependent on you at the date of your death. Civil Partnerships The Civil Partnership Act 2004 means that if a Plan member dies, the civil partner will have entitlement to Plan benefits. Accordingly, the benefits will be the same as those provided for a spouse. Same Sex Marriages The Marriage (Same Sex Couples) Act 2013 means that if a Plan member dies the same sex spouse will have entitlement to Plan benefit. Accordingly, the benefits will be the same as those provided for a spouse of the opposite sex. Nomination Form The Trustee has the discretion to decide who should receive any cash sums payable upon your death. The Directors of the Trustee will take into account your wishes, which is why it is imperative that you complete a Nomination Form, but ultimately they are not bound by this form. Payment is made in this way to avoid any liability for inheritance tax on benefits. It should also be possible for the money to be transferred to the chosen beneficiaries without having to wait for probate on your estate. To ensure that the Directors of the Trustee are aware of your wishes, you should make sure that you have completed a Nomination form which reflects your current personal circumstances. You can get a Nomination form from EDS Pensions Administration or the member website (see page 20). You can make a new nomination at any time and you should ensure that it is kept up to date. 13

16 7. LEAVING THE PLAN What happens if I leave the Company or the Plan? Your cash equivalent benefits can be transferred to another pension arrangement (see below under Can I transfer my benefits elsewhere? ). You must request such a transfer within 3 months of receiving the quotation. Alternatively, you will be entitled to a deferred pension payable from your Normal Retirement Date. Your pension will be calculated using your Final Pensionable Salary and Pensionable Service completed to the date of leaving the Plan. Pension Example Mr. Jones joined the Plan in April 1997 and leaves the Company in April 2017 on a Final Pensionable Salary of 35,000. His pension would be calculated as follows upon leaving (on basis his Pension Accrual Rate is 1.70%: = 1.70% x 20 years x 35,000 = 11,900 pa During the period between leaving and your Normal Retirement Date your deferred pension will be increased. As a result of legislation, and in accordance with the Plan s Trust Deed and Rules, increases will be provided as follows. Your deferred pension that you have accrued prior to 6 April 2009 and in excess of the Guaranteed Minimum Pension (GMP) will be increased by the rise in inflation up to a maximum of 5% per annum compound. Your deferred pension accrued on and after 6 April 2009 will be increased as the rise in inflation up to a maximum of 2.5% per annum compound. For these purposes inflation is taken as CPI (Consumer Price Index). The part of your pension representing GMP will increase for each complete tax year between the date of leaving and State Pension Age, in accordance with statutory requirements. Can I transfer my benefits elsewhere? You can transfer your benefits to another approved pension arrangement, providing the new arrangement accepts transfers. The value of your accrued pension benefits (or cash equivalent ) will be calculated on actuarial advice, as the value of the benefits to which you are entitled under the Plan. In calculating this value, the actuary will use assumptions which will comply with applicable legislation and actuarial professional guidance notes. The cash equivalent will reflect market conditions at the time it is calculated and is dependent upon age. The cash equivalent will take into account the increases described in the booklet in respect of deferred pensions, but will not allow for any discretionary increases which might have been granted by the Trustee had your benefits remained in, and been paid from, the Plan. The cash equivalent may be reduced by the Trustee on the advice of the Actuary, if passing a full transfer value may reduce the security of the remaining members of the Plan. Within 3 months of your request, you will be provided, with details of the cash equivalent of your benefits; this figure will be guaranteed for 3 months. The value of your deferred pension or transfer value will be at least equal to 200% of the contributions (excluding AVCs) you have paid into the Plan. For information on your benefits in the event of Early Retirement see section 5.2. For information on benefits in the event of your death see section

17 8. ADDITIONAL VOLUNTARY CONTRIBUTIONS On page 6 we referred to the facility to pay AVC's to increase your Plan benefits. These may be paid either through the Plan or directly by yourself, to a pension provider of your choice. The maximum pension contribution you may pay to the Plan is 100% of your earnings in any year (including your normal contributions to the Plan). If you pay through the Plan, you will receive tax relief through the PAYE system. If, however, you arrange contributions to an alternative provider, you will pay a net amount and the pension provider will recoup a basic rate of tax allowance from Her Majesty s Revenue and Customs (HMRC). If appropriate, you will have to claim an allowance for relief from higher rate tax from HMRC. Payments do not have to be made on a regular or continuous basis. Apart from the restriction on the maximum contribution the only proviso is that, if your total retirement benefits exceed certain maxima laid down by HMRC, additional tax will be payable. AVCs may be used to increase any of the Plan benefits or to provide benefits for other dependants. AVCs may now be taken as cash, see page 10 for details. In certain circumstances, it is possible for your AVCs to be transferred separate from your main benefits. Details are available by contacting EDS Pensions Administration (see page 20 for contact details.) In the event of your death before an AVC-type benefit becomes available, your contributions will normally be returned. In the event of your leaving the Plan then: Option 1 - Option 2 - Your AVCs will become paid-up and may be used to provide benefits at retirement if you retain your Plan benefits as a deferred member. The value of your AVCs will be transferred to a new scheme or an individual policy if you transfer your Plan benefits out. It is important you take time to consider which investment options are best for you. Information on your investment options is available on the member website ( or by contacting EDS Pensions Administration (see page 20). 15

18 9. STATE PENSION BENEFITS The State Pension Scheme prior to 6 April 2016 comprised a number of elements. Basic State pension, which provides a flat rate pension to everyone who has paid sufficient National Insurance contributions. State Earnings-Related Pension Scheme (SERPS) which provides a pension based on an employee s earnings between certain limits but which ceased to accrue after 5 April State Second Pension (S2P). This replaced SERPS with effect from 6 April The pension is earnings-related but it accrued differently compared to SERPS. Up to 6 April 2016 the Plan contracted-out of SERPS and S2P, providing up to 6 April 1997 a minimum amount of benefit (Guaranteed Minimum Pension (GMP)) and after that date a benefit meeting at least a reference scheme test minimum. With effect from 6 April 2016 the State Pension Scheme simply comprises a flat rate pension and contracting-out is no longer available from that date, although GMP and the reference scheme test minimum continue to apply to accrual to 6 April As a consequence your National Insurance contributions are payable at the full rate. Further information about State Pension Scheme benefits is available on the Internet: 16

19 10. ADDITIONAL INFORMATION 10.1 ABSENCE FROM WORK What happens if I am away from work because of illness or injury? Your membership of the Plan will continue for the period of absence and your lump sum death in service benefits under a separate trust will be maintained. During any period of absence without pay your benefit will be based on Pensionable Salary and Pensionable Service completed before the period without pay. You may agree with the Trustee to make up any unpaid contributions on your return to work so that the period will also count towards your Pensionable Service. What happens if I go on Maternity, Paternity or Adoption leave? If you are on maternity, paternity or adoption leave from the Company, any period during which you receive statutory pay or earnings from the Company will count as Pensionable Service based on full (notional) Pensionable Salary. During this time you must continue to pay contributions but these will be based on your actual earnings received during the period, less the Lower Earnings Limit. During any period of unpaid maternity, paternity or adoption leave, you may on your return to work (and with the agreement of the Trustee and the Company) agree to make up any unpaid contributions and the period of absence will count towards your Pensionable Service. What happens if I am away from work for any other reason? With the Company s agreement your lump sum death in service benefit will be maintained. On your return you may agree with the Trustee to make up the missed contributions, in which case the period of absence will count towards your Pensionable Service WHAT HAPPENS IF I AM A PART-TIME WORKER? Your contributions and benefits will be based on the hours you are working on 6 April each year. Your benefits are based on your full time notional equivalent Pensionable Salary WHAT ELSE SHOULD I KNOW? Who looks after the Plan? The Plan is managed by a corporate Trustee, EDS Trustee Limited. The main management duties of the Trustee are: To ensure the Plan is managed in accordance with the Trust Deed and Rules and the relevant legislation. To arrange and monitor the administration of the Plan. To supervise the investments of the Plan. 17

20 10. ADDITIONAL INFORMATION (cont d) Is the Plan tax approved? The Plan is registered giving the following benefits: Full tax relief on member contributions. The Plan s investments receive favourable tax treatment. Cash taken at retirement is tax-free (subject to limits). The Plan will be subject to the Lifetime Allowance (LA) and the Annual Allowance (AA) to determine levels of tax payable. The LA and AA are set out on page 2. Where they are exceeded additional tax is payable; currently between 0% and 45% (depending on total taxable income) on pension built up in excess of the AA and 25% on the excess over the LA if such benefit is taken as pension (55% if taken as cash). In order to give protection to those members above or near to the LA at 6 April 2006 certain members will have registered and protected their accrued rights to that date. Certain members may also have other fixed protections relevant to them. Any member affected should refer to the literature already provided to them. If you are affected by additional tax because you exceed the AA a facility called Scheme Pays may be available to you. In this instance you could ask the Plan to pay any tax on your behalf. Your pension benefits would be reduced as a result. Further details on Scheme Pays is available from EDS Pensions Administration. How are my benefits funded? All the benefits payable under the Plan are funded on a basis agreed with the Plan's Actuary. Contributions to the Plan are invested by professional investment managers appointed by the Trustee. Can I use my benefits as security for a loan? The benefits under the Plan may not be assigned, nor can they be charged or mortgaged in any way. Any attempt to do so may result in forfeiture of the benefits. The only exception to this rule would be a division of your benefits under the earmarking divorce provisions introduced by the Pensions Act 1995 or the pensions sharing provisions of the Welfare Reform and Pensions Act

21 10. ADDITIONAL INFORMATION (cont d) What happens if I have a Pension Sharing Order? Your pension benefits can be shared with an ex-spouse in the event of divorce. This provision also applies to those who have entered a civil partnership or same sex marriage. This will usually involve a lump sum payment from the Plan to a pension arrangement established by the ex-spouse or civil partner, with a corresponding reduction in your benefit. The cost of administering a Pension Sharing Order will be borne by you and / or your ex-spouse or civil partner by a direct charge. Can the Plan be amended or discontinued? The Company expects the Plan to continue but reserves the right to amend or discontinue the Plan at any time. Amendments must be approved by the Trustee, which also has the power to discontinue the Plan in certain circumstances where this would be in the best interests of the members. Data Protection Act 1998 The Trustee and the Company have both a legal obligation and a legitimate commercial need to process data relating to you for the purpose of administering and operating the Plan and paying benefits under it. This may include passing on data about you to the Plan s Actuary, auditor, administrator and such other third parties as may be necessary for the administration and operation of the Plan. The Trustee and the Company are both regarded as Data Controllers for the purposes of the Data Protection Act You are entitled to see any data that is held on you, unless in providing this data other parties data would be disclosed. You can arrange this either by contacting EDS Pensions Administration or by writing to the Secretary to the Trustee, EDS Trustee Limited, Xafinity, Phoenix House, 1 Station Hill, Reading, RG1 1NB. What information is provided to me as a contributory member of the Plan? Whilst you are employed by the Company, you will receive an annual statement setting out your current entitlement based on your current Pensionable Salary. In addition, each year the Trustee will issue a report on the Plan. This report will also include any other information that the Trustee considers to be relevant. A more formal Trustee s Report including audited accounts is also produced each year and is available to members on request, either through EDS Pensions Administration or via the member website (see details on page 20), along with the Trust Deed and Rules. On retirement, leaving service or death, details of the benefits arising will be provided to you or your dependants, as appropriate. What information do I have to provide? Every Member and beneficiary under the Plan must give such evidence and information as may reasonably be required by the Trustee for the purposes of the Plan. The Trustee may withhold any benefit affected until the required evidence or information is given. 19

22 10. ADDITIONAL INFORMATION (cont d) 10.4 FURTHER INFORMATION EDS Pensions Administration If you have a general query about the Plan or a specific question about your Plan membership, please contact: EDS Pensions Administration Freephone: Equiniti Paymaster Landline: Sutherland House Fax: Russell Way edspens@equiniti.com Crawley West Sussex RH10 1UH or Visit the member website where you can access key information including the Trust Deed and Rules, latest news, members guides, forms, newsletters and contact information. The website address is: Independent Financial Advice You can find an independent financial adviser by contacting IFA Promotion on: Website: You will need to discuss with the independent financial adviser how they will be paid for any services they provide to you. 20

23 10. ADDITIONAL INFORMATION (cont d) The DWP s Pension Tracing Service If you have lost the details of your deferred benefits under a previous scheme you can contact the Pension Tracing Service who will provide you with an up-to-date address for the trustees of that scheme. You can contact the Pension Tracing Service at: Pension Tracing Service The Pension Service 9 Mail Handling Site A Wolverhampton WV98 1LU Telephone: Website: Internal Dispute Resolution Procedure (IDRP) The Pensions Advisory Service is available to help at anytime. See page 22 for their contact details. Stage 1 If you have a complaint about any aspect of the Plan, you (or your representative) should contact the Secretary to the Trustee, preferably in writing at EDS Trustee Limited, Xafinity, Phoenix House, 1 Station Hill, Reading, RG1 1NB. Whenever you write you should give your name, address, date of birth, National Insurance number, the Plan you are in, the full nature of your complaint along with as much information as you possibly can about why you are aggrieved. Complaints can be brought by members, any surviving beneficiary, non-dependent beneficiaries of deceased members or prospective members. Complaints should ordinarily be made within 6 months. If you are or will no longer be a member or beneficiary of the Plan, you must raise the complaint within 6 months of ceasing to be so. The Secretary to the Trustee will endeavour to ensure that you receive a written reply within 2 months following receipt of your complaint. In any case he will make a decision within 4 months. In all cases communication of any decision will be sent to you no later than 15 days after the decision is taken, except in exceptional circumstances where they are unable to do so. The reply will state clearly the decision that has been made about your complaint and must refer to the Plan s Trust Deed and Rules or legislation, or the exercise of any discretion, which forms the basis of the decision. If the Secretary to the Trustee is unable to give you a full written reply within the initial 2 month period you will be provided with an interim response stating the reason for any delay and confirming a revised date when a full reply will be available. Stage 2 If you do not agree with this decision you should contact the Trustee, preferably in writing at the same address as above, asking them to reconsider the decision. Whenever you write you must send a copy of the decision, along with your name, address, date of birth, National Insurance number and state your reasons for disagreeing with the decision. If you have ceased to be a member or are a beneficiary or prospective member you must do this within 6 months of receiving the decision under Stage 1. After considering your disagreement the Trustee must either confirm the earlier decision or make a new decision in its place. They will endeavour to do this within 2 months of receiving your complaint. In any case they will make a decision within 4 months. In all cases communication of any decision will be sent to you no later than 15 days after the decision is taken, except in exceptional circumstances where they are unable to do so. If they are unable to respond within 2 months they will provide you with an interim response stating the reason for the delay. This written reply from the Trustee will remind you of your right to take up your complaint with the Pensions Advisory Service (TPAS) and the Pensions Ombudsman, together with appropriate addresses at which they can be contacted if you disagree with the Trustee decision. Note. The above resolution procedure will cease if a complaint becomes exempt, if Court or tribunal proceedings commence or the Pensions Ombudsman begins investigation. 21

24 10. ADDITIONAL INFORMATION (cont d) The Pensions Advisory Service (TPAS) If you are not satisfied with the outcome of the IDRP, you may then refer the matter to TPAS. TPAS is available to assist members and beneficiaries of occupational pension schemes in connection with any pension queries they may have, or to resolve any difficulties they have encountered and which they have failed to resolve with the Trustee or administrators of the Plan. TPAS can be contacted at: 11 Belgrave Road Telephone: London Website: SW1V 1RB Pensions Ombudsman In cases where a complaint or dispute cannot be resolved, normally after the intervention of TPAS, an application can be made to the Pensions Ombudsman for adjudication. The Ombudsman can investigate and determine any complaint or dispute of fact or law involving occupational pension schemes. The services of the Ombudsman are available to assist members, beneficiaries and prospective members. The Pensions Ombudsman can be contacted at the same address as TPAS. Telephone: Website: The Pensions Regulator The Pensions Regulator is able to intervene in the running of schemes where trustees, employers or professional advisers have failed in their duties, to minimise any adverse impact on the sustainable growth of an employer, and in certain other circumstances. The address is: Napier House Telephone: or Trafalgar Place Website: Brighton East Sussex BN1 4DW Pension Protection Fund The Pension Protection Fund (PPF) has been established in order to protect a significant proportion of the accrued benefits in defined benefit arrangements in the event that the employer becomes insolvent and the pension arrangement is underfunded. The PPF is funded by a levy imposed on defined benefit pension arrangements. 22