STAFF EXPLANATORY BOOKLET

Transcription

1 STAFF EXPLANATORY BOOKLET July 2015

2 Cotets Page Welcome to the Staff Sectio of the AA Pesio Scheme 3 What is it? 4 Ca I joi? What do I pay? 4 What do I get? 5 What about icreases? 8 Is my family protected? 9 What if I leave? 11 Ca I pay more? 12 The limits to tax-efficiet pesio savigs 13 Pesio beefits from the State 14 Gettig further help 15 The legal backgroud 17 Iformatio, help ad advice 19 Techical terms explaied 19 2 The AA Pesio Scheme STAFF sectio

3 Welcome to the Staff Sectio of the AA Pesio Scheme Retiremet may seem a log way off, but plaig how to provide for the future, for you ad your family, is oe of the most importat decisios you will have to make. You eed to decide how best to provide yourself with a pesio i retiremet. This booklet explais the beefits provided by the Staff Sectio of the AA Pesio Scheme the Scheme. The AA provides a good pesio scheme with a wide rage of beefits. Your pesio is based o the level of your pesioable earigs ear retiremet ad the umber of years you have bee a member of the Scheme. This meas that, as your pesioable earigs icrease, so does the value of your pesio (subject to this icrease remaiig withi a certai limit). This booklet describes the beefits offered to members of the Staff Sectio of the AA Pesio Scheme employed i the UK. It has bee desiged to give members a broad outlie of the beefits of the Scheme ad how it works ad, as such, is oly a guide ad ot a legal documet. The Scheme is govered by the Trust Deed ad Rules, a copy of which is available from AA Pesios Departmet or the Ao Hewitt Pesios Team. If there is ay coflict betwee this booklet ad the Trust Deed ad Rules, the the Trust Deed ad Rules will take precedece. The Scheme also provides other beefits which will cover your family or depedats if you die whilst you are still workig, i retiremet ad eve after you have left the Scheme with a deferred pesio. Also, if you have to retire because of ill-health, a immediate pesio may be paid to you. All i all, the Staff Sectio of the AA Pesio Scheme provides excellet protectio whilst you are workig ad a good icome i retiremet. AA Pesios Departmet The AA Pesio Scheme STAFF sectio 3

4 What is it? About the Staff Sectio The Staff Sectio provides beefits for you ad your depedats both before ad after your retiremet. Your retiremet beefits are calculated usig your fial pesioable earigs ad legth of pesioable employmet. You ca also top up your pesio by payig Additioal Volutary Cotributios as described o page 12. Membership of the Scheme will ot affect your etitlemet to the Basic State Pesio, which is payable from State Pesio Age. The Trustee is resposible for ruig the Staff Sectio i accordace with the Trust Deed ad Rules. The ames of the Trustee Directors are available i the latest Report ad Accouts. O a day to day basis the Staff Sectio is admiistered by the AA Pesios Team ad their cotact iformatio ca be foud o the back cover. Ca I joi? What do I pay? Membership The Staff Sectio is closed to ew etrats. The iformatio i this explaatory booklet is therefore oly relevat to those who were already members whe the Staff Sectio closed to employees. If you are ot a member of the AA Pesio Scheme ad are cosiderig joiig the you will eed to read the iformatio o CARE which is available o the website Cotributios You pay betwee 7.5% - 8.5% of your pesioable earigs towards the cost of your beefits, uless you elected for reduced accrual from 1st September 2003 i which case you are curretly payig 5%. The amout you pay depeds o the rate selected at 1 July Your cotributios are automatically deducted from your pay ad you receive full tax relief o them. Also, as a member of the Staff Sectio you are cotracted-out of the additioal State Pesio Scheme (see page 14) ad therefore pay reduced Natioal Isurace cotributios, so the overall cost of belogig to the Scheme is lower tha it first appears. The Compay meets the remaider of the costs for the beefits available. The Compay s cotributio is determied by the Trustee after cosultig with the Scheme Actuary ad is reviewed regularly. Trasfers i Some members may have previously trasferred beefits ito the Scheme, i retur for which they were grated a additioal period of pesioable employmet. However o further trasfer paymets ca be accepted ito the Scheme. 4 The AA Pesio Scheme STAFF sectio

5 What do I get? Your beefits at retiremet How your pesio is calculated The ormal retiremet age uder the Staff Sectio is 65. If you retire o your Normal Retiremet Date (NRD) you will be etitled to a aual pesio icome equal to 1/60th of your fial pesioable earigs for each full year (ad proportioately for each complete moth) of pesioable employmet. If you are a reduced accrual member who has elected to pay 5% of pesioable earigs util your pesioable employmet eds, beefits o ad from 1st September 2003 accrue at the reduced rate of 1/80th of your fial pesioable earigs for each year (ad proportioately for each complete moth) of pesioable employmet. Example: A member cotributes to the Staff Sectio of the Scheme for 20 years ad retires at ormal retiremet date with fial pesioable earigs of 15,000. The ormal retiremet pesio is calculated as: 20/60 x 15,000 = 5,000 per year Please ote: If you are a part-timer, your pesio beefits will be directly proportioal to the umber of hours you are cotracted to work. For istace, if you work half the full-time hours, you will pay cotributios based o your actual pesioable earigs ad build up half the pesio of a equivalet full-time employee. Paymet of pesios Your pesio is payable for your lifetime by mothly istallmets i advace. It is paid directly ito your bak or buildig society accout. Cash optio at retiremet You may, if the Trustee agrees, choose to exchage up to 25% of the value of your pesio beefits for tax-free cash whe you take your pesio, providig you are over the miimum pesio age of 55 or if you retire due to ill-health. This is ofte referred to as commutatio. If you have paid Additioal Volutary Cotributios (AVCs), the you may also take up to 25% of the value of your accumulated AVC fud as a tax free cash sum, subject to the total cash sum from all sources ot exceedig HM Reveue & Customs maximum tax free cash sum limits. The Trustee, o a basis certified as reasoable by the Actuary, will decide the amout of pesio you will have to give up i exchage for a cash sum whe you commece your pesio; this will deped o your age. The terms for exchagig pesio icome for cash may be reviewed ad altered by the Trustee from time to time. Although ay cash sum take will reduce your pesio, it will ot affect ay spouse s or depedat s pesio payable o your death. If you work both full-time ad part-time durig your career, each period will be treated accordigly. The part-time service ad pesioable earigs will be adjusted to the full-time equivalet ad added to the full-time etitlemet. This meas that your pesio is protected if your hours chage. The AA Pesio Scheme STAFF sectio 5

6 Early retiremet Icapacity You may retire earlier tha the Normal Retiremet Date provided that you are above miimum pesio age which is curretly 55. The early retiremet pesio is calculated i the same way as for ormal retiremet, but usig pesioable employmet ad fial pesioable earigs at the date of actual early retiremet. A reductio to allow for early paymet will apply if you are uder age 65. You may be etitled to a aual pesio, payable immediately if; Flexible retiremet You do ot have to retire from work before receivig a pesio - as log as you are over your miimum pesio age of 55. You ca choose to take 50% or 100% of your pesio whilst cotiuig to work for the Compay ad as log as the pesio is put ito paymet, you ca receive part of your beefits as a tax free cash sum. If you choose to take flexible retiremet, you caot cotiue to cotribute to, or accrue further beefits uder the Staff Sectio of the Scheme. You ca joi the CARE sectio of the Scheme to accrue pesio i respect of future service. Your ill-health prevets you from workig i your curret job but you are still able to do some kid of work; Although your earigs capacity is adversely affected, it is expected to cotiue. The pesio will be calculated as: 1/60 x x Fial pesioable earigs at date of actual retiremet Pesioable employmet to date of actual retiremet Serious icapacity If you become so ill that you will be uable to do ay kid of work agai, a ehaced illhealth pesio may be paid immediately. It will be calculated as above, but your pesioable employmet will iclude all the years you could have worked up to your ormal retiremet date. The pesio is calculated as follows: Ill-health retiremet With the agreemet of the Compay, you may retire at ay time o grouds of ill-health (icapacity). You ca choose to take 50% or 100% of your pesio whilst cotiuig to work for the Compay. 6 The AA Pesio Scheme STAFF sectio 1/60 x Fial pesioable earigs at date of actual retiremet x Total pesioable employmet that could have bee completed by ormal retiremet date Please ote: the decisio o whether to grat ill-health beefits is take by the Compay after cosiderig medical evidece. The Trustee must also be satisfied that you are ad will cotiue to be icapable of carryig out your occupatio because of physical or metal impairmet. Oce a ill-health pesio has bee grated it is subject to periodic review ad may be reduced or suspeded at ay time.

7 Serious ill-health If you have less tha 12 moths to live, you may be able to commute all of your pesio to a lump sum, subject to evidece of your life expectacy from a Registered medical practitioer. Late retiremet If you retire from employmet after Normal Retiremet Date you will be etitled to a immediate aual pesio, which must i ay evet start o later tha your 75th birthday. The amout of pesio payable will deped upo whether o reachig Normal Retiremet Date you decided to cotiue as a cotributig member of the Scheme. If you cotiue to cotribute after your ormal retiremet date, you will be etitled to a aual pesio equal to 1/60th of your fial pesioable earigs for each year (ad proportioately for each complete moth) of pesioable employmet up util the date of leavig employmet. If you choose to cease to be a cotributig member of the Scheme o or after reachig Normal Retiremet Date, you may choose to draw your pesio, or you may defer drawig your pesio up util your 75th birthday. The pesio payable will be calculated as the pesio at the date pesioable employmet ceased icreased up to the date paymet commeces at a rate decided by the Trustee after cosultig the Actuary. The AA Pesio Scheme STAFF sectio 7

8 What about icreases? Pesio icreases i paymet For pesio beefits built up before 23 September 1999: Your pesio (above your GMP) is guarateed to icrease each year o 1 April (or such other date as the Trustee ad the Pricipal employer agree) i lie with iflatio (as measured by the Retail Prices Idex, over the 12 moths edig o the previous 30 September). For pesio beefits built up betwee 23 September 1999 ad 30 Jue 2010: Your pesio (above your GMP) is guarateed to icrease each year o 1 April (or such other date as the Trustee ad the Pricipal employer agree) i lie with iflatio (as measured by the Retail Prices Idex, over the 12 moths edig o the previous 30 September) up to a maximum of 5%. For pesio beefits built up o or after 1 July 2010: Your pesio (above your GMP) is guarateed to icrease each year o 1 April (or such other date as the Trustee ad the Pricipal employer agree) i lie with iflatio (as measured by the Retail Prices Idex, over the 12 moths edig o the previous 30 September) up to a maximum of 2.5%. Guarateed Miimum Pesio (GMP) The GMP elemet of your pesio will be subject to icreases, the exact basis differs depedig upo whe you left Active Status, whe your pesio commeced ad your age. Keepig pace with iflatio Pesios i paymet are reviewed each year by the Compay, which may award discretioary icreases to help keep pace with iflatio. 8 The AA Pesio Scheme STAFF sectio

9 Is my family protected? Family beefits If you die before retiremet If you die whilst still a cotributig member of the Scheme, the followig beefits will be paid: Cash sum A cash sum equal to three times your basic salary at the date of your death or three times your earigs i the previous tax year, if greater will be paid. The Trustee has discretio as to whom paymet is made. Spouse or depedat s pesio Your spouse or depedat may receive a lifetime pesio, calculated as half the pesio you would have received if you had retired the day before you died, except that pesioable employmet icludes the period betwee death ad ormal retiremet date. If your spouse or depedat is more tha te years youger tha you, the pesio may be reduced to take accout of their loger life expectacy. Child s pesios A pesio is paid to each child (up to a maximum of 4). Each pesio is equal to oe quarter of the spouse s or depedat s pesio. Pesios may be paid at the Trustee's discretio to childre up to the age of 22, if they are still i full-time educatio. If you die i defermet If you die after ceasig to be a cotributig member of the Scheme havig completed at least three moths pesioable employmet, but your pesio has ot yet come ito paymet, the followig beefits will be paid: Cash sum A cash sum equal to the cotributios you paid to the Scheme (excludig ay AVCs) with iterest determied by the Trustee after cosultig the Actuary. The Trustee has discretio as to whom paymet is made. Spouse or depedat s pesio Your spouse or depedat may receive a lifetime pesio, calculated as half the pesio you would have received if you had retired the day before you died. If your spouse or depedat is more tha te years youger tha you, the pesio may be reduced to take accout of their loger life expectacy. Child s pesios A pesio is paid to each child (up to a maximum of 4). Each pesio is equal to oe quarter of the spouse s or depedat s. Pesios may be paid at the Trustee's discretio to childre up to the age of 22, if they are still i full-time educatio. The AA Pesio Scheme STAFF sectio 9

10 If you die after retiremet If you die after takig your pesio, the followig beefits will be paid: Pesio guaratee Your pesio, excludig ay early retiremet supplemet, is guarateed for five years, so if you die withi five years of commecemet of your pesio, the remaider of the five years pesio paymets is paid. The Trustee has discretio as to whom the paymet is made (see ext colum). Spouse or depedat s pesio Your spouse or depedat may receive a pesio equal to half the pesio you were etitled to at the date of commecemet of your pesio (excludig ay early retiremet supplemet) before ay part of it was exchaged for a cash sum. The spouse s or depedat s pesio will iclude 50% of ay pesio icreases grated to your pesio after it commeced. Paymet of cash sum death beefits Where a cash sum is paid i the case of death, the recipiets will be at the discretio of the Trustee but they will take ito accout ay omiatios o your Expressio of Wish form. A olie Expressio Of Wish form ca be foud olie at You ca also dowload the form, complete it by had ad sed to Ao Hewitt at: The AA Pesios team Ao Hewitt PO Box 196 Huddersfield HD8 1EG Please ote: it is o loger possible to accept a Expressio of Wish form i a sealed evelope to be opeed o death. Childre s pesios A pesio is paid to each child (up to a maximum of 4). Each pesio is equal to oe quarter of the spouse s or depedat s pesio. Pesios may be paid at the Trustee's discretio to childre up to the age of 23, if they are still i full-time educatio. 10 The AA Pesio Scheme STAFF sectio

11 What if I leave? Beefits if you leave the scheme If you leave you may choose betwee a deferred pesio, early retiremet or a trasfer paymet. A deferred pesio This pesio is calculated i the same way as a pesio at ormal retiremet date, but is based o your fial pesioable earigs ad pesioable service at the date of leavig. Your deferred pesio is payable from ormal retiremet date. You will cotiue to receive icreases to your deferred pesio to help protect it agaist iflatio. The guarateed miimum pesio icluded i your deferred pesio will be icreased at a rate set by the Govermet. Your pesio (above your guarateed miimum pesio) will icrease over the period util your ormal retiremet date broadly i lie with iflatio (as measured by the Retail Prices Idex) up to a maximum of 5%. Precise details will be give to you if you leave. See page 9 for details of the beefits payable o death i defermet. Early retiremet from deferred status Havig left the AA with a etitlemet to a deferred pesio, it is possible to commece paymet of your pesio before your ormal retiremet date. The earliest date at which your pesio ca commece is age 55, ad your deferred pesio will be reduced due to the fact that it will be paid for a loger period. The rate of reductio is decided by the Trustee after cosultig the Actuary. A trasfer paymet You may request to trasfer the value of your deferred pesio to aother registered pesio scheme. The value of your deferred pesio - the cash equivalet trasfer value (CETV) - is calculated as the amout which eeds to be ivested i order to provide your future pesio. It takes accout of the umber of years before retiremet ad fiacial coditios at the date of paymet of the CETV. You have the right, each year, to ask for the value of your curret pesio etitlemet uder the Scheme, i.e. the CETV. Optig out of the Scheme whilst still i employmet You may opt out of the Scheme at ay time. If you decide to leave, your beefits are calculated i the same way as if you had left employmet. If you choose to opt-out you will ot be able to rejoi the Staff Sectio of the AA Pesio Scheme at a later date. If you are cosiderig doig this, we recommed that you seek idepedet fiacial advice before doig so. You will eed to complete a Opt out of the Scheme form which is available from the Pesios Departmet team at pesios@theaa.com. The AA Pesio Scheme STAFF sectio 11

12 Ca I pay more? Boostig your beefits Additioal Volutary Cotributios (AVCs) I additio to the cotributios payable to the Staff Sectio of the Scheme, you ca pay AVCs as described below. AVCs are a good way of icreasig your beefits, particularly if you joied the Compay mid-career or pla to take your pesio early. They are a taxefficiet way of savig. This is because they are deducted from your pay before tax, i the same way as your pesio cotributios, so you receive full tax relief o them at your highest rate of tax. You ca also access the flexibilities available for defied cotributio pesios. Full details of the AVC arragemets ca be foud at alog with details of where you ca fid more iformatio ad guidace about to the optios you will have i relatio to your AVC fud at retiremet. You will eed to be aware of the Aual Allowace limits before decidig to pay AVCs. See page 13 for more iformatio. 12 The AA Pesio Scheme STAFF sectio

13 The limits to tax-efficiet pesio savigs The Govermet made sweepig chages to the tax regime for pesio savigs effective from 6 April These chages mea that there is ow o maximum to the amout of your pesio savigs but there is a limit to the tax-efficiecy of savig i a registered pesio scheme. HM Reveue & Customs (HMRC) will allow you to receive tax relief o your total pesio cotributios up to a maximum of 100% of your earigs i the tax year (or 3,600 if greater). But you may icur a tax charge if your cotributios are substatial - see below. There is o limit o the cotributios o which you ca receive tax relief i the tax year i which your pesio beefits commece. The Aual Allowace The Aual Allowace limits the amout of tax privileges o a member s pesio iput each year. If the value of a member s pesio iput exceeds the Aual Allowace, the excess will be subject to a tax charge. Pesio iput icludes: The capital value of ay beefit accrual i defied beefit pesio schemes (such as the Staff Sectio). The capital value is calculated by multiplyig the icrease i the level of your pesio etitlemet durig the tax year by a factor of 16, ad; Ay other cotributios to defied cotributio schemes, such as Additioal Volutary Cotributios (AVCs) or cotributios to ay other HMRC Registered Pesio Scheme. This may iclude ay pesio arragemets that you cotribute to o a private basis. The Aual Allowace for the 2015/2016 tax year is 40,000. The Lifetime Allowace Your pesio beefits are also subject to a overall Lifetime Allowace, which is the overall amout of pesio savigs tha a idividual ca have at retiremet without icurrig a tax charge. The Lifetime Allowace for the 2014/2015 tax year is 1.25 millio. For defied beefit schemes the value of the member s pesio is calculated by multiplyig the iitial aual pesio by 20 ad addig it to the pesio commecemet lump sum received. This would be added to the value of ay other pesio fuds you have outside the AA to determie whether the Lifetime Allowace has bee reached. I practice it is expected that few members of the Staff Sectio (if ay) will reach the Lifetime Allowace, but you should take idepedet fiacial advice if you believe that you may be affected by it. If the Lifetime Allowace is exceeded the excess beefits are subject to the Lifetime Allowace Charge. This would curretly mea a tax charge of 25% if the beefits are take as additioal pesio or a tax charge of 55% if the beefits are take as a lump sum. The AA Pesio Scheme STAFF sectio 13

14 Pesio beefits from the State Basic State Pesio (BSP) State Pesio Age (SPA) i the UK will vary based upo geder ad date of birth. Uder the curret rules for me bor before 6th December 1953 it s 65 ad for wome bor o or before 5 April 1950 it s 60. The SPA for both me ad wome is a chagig ladscape with plas to gradually icrease SPA so that it rises to 68 depedig o whe you were bor. It is very importat that you keep up to date with these chages ad the impact o you persoally. You qualify for the Basic State Pesio if you have built up eough qualifyig years before State Pesio Age. A qualifyig year is a tax year where you have sufficiet icome to pay Natioal Isurace Cotributios (NICs), or are treated as havig paid or beig credited with NICs. If you reached State Pesio Age o or after 6 April 2010, you will eed 30 qualifyig years to receive a full Basic State Pesio or the Basic State Pesio will be pro-rated. The State Pesio scheme is made up of two mai parts: The Basic State Pesio; The State Secod Pesio (S2P), a earigs related beefit (previously the State Earigs- Related Pesio Scheme, kow as SERPS). Provided you have paid the required NICs durig your workig life, you will receive a Basic State Pesio. The pesio is a fixed amout set by the Govermet ad is icreased each year i lie with price icreases. It is paid from State Pesio age. You caot opt-out of the Basic State Pesio. State Secod Pesio With effect from 6 April 2002, a ew State Secod Pesio (S2P) replaced the State Earigs-Related Pesio Scheme (SERPS). The Staff Sectio of the AA Scheme is cotracted-out of this arragemet o a salary-related basis. This meas that you will ot receive State Secod Pesio relatig to the time you cotribute to the Scheme. For membership before 6 April 1997, the cotractedout schemes must provide you with at least a guarateed miimum pesio (GMP) roughly equal to the pesio you would have received as a member of SERPS. O your death, the Scheme must also provide your spouse with a proportio of your GMP, as specified by legislatio at that time. For cotracted-out membership after 5 April 1997, the Scheme actuary has to certify that the level of beefits provided uder the Scheme overall is at least as valuable as that uder cotractig-out regulatios. Cotracted-out beefits relatig to service pre ad post 5 April 1997 are provided by the AA Pesio Scheme. Who ca I ask about my State beefits? For queries relatig to your State beefits, you ca cotact The Departmet for Work ad Pesios (DWP). Future Pesio Cetre The Pesio Service 9 Mail Hadlig Site A Wolverhampto WV98 1LU Telephoe: Website: 14 The AA Pesio Scheme STAFF sectio

15 Gettig further help Dealig with complaits If you have a complait relatig to the Staff Sectio you should cotact the Group Pesios Maager who will always try to provide a prompt ad accurate respose. If the matter caot be resolved iformally, the Scheme has a formal Iteral Disputes Resolutio Procedure (IDRP) ad a full copy is available from the Group Pesios Maager. The IDRP will be used to resolve ay dispute if you have a serious problem that the Group Pesios Maager caot resolve, or you are uhappy with the decisio reached. To begi the IDRP you will eed to put your complait i writig to the Secretary to the Trustee at the followig address: A.A. Pesios Trustees Limited Faum House (8th Floor) Basig View Basigstoke Hampshire RG21 4EA You will the receive a writte decisio ad a explaatio, where possible withi two moths of your writte complait beig received. If you are still dissatisfied, you have the right to appeal to the Trustee. At ay time durig the disputes procedure, you may refer the complait to TPAS or the Pesios Ombudsma. The Pesios Advisory Service (TPAS) ad the Pesios Ombudsma TPAS is available to assist you with ay pesio queries or ay difficulties that you have failed to resolve through the Scheme s IDRP. You ca cotact TPAS by writig to: 11 Belgrave Road Lodo SW1V 1RB Telephoe: Website: Equiries ca be submitted usig their olie equiry form. If TPAS is uable to resolve the dispute, you may cotact the Pesios Ombudsma who ca ivestigate ad determie ay complait or dispute of fact or law i relatio to a occupatioal pesio scheme. The Pesios Ombudsma ca also be cotacted by writig to the above address or by telephoig Website: equiries@pesios-ombudsma.org.uk The Pesios Ombudsma will usually expect the Pesios Advisory Service to have bee approached (ad the Scheme s disputes procedure to have bee exhausted) before he will ivestigate ay complait himself. The AA Pesio Scheme STAFF sectio 15

16 Pesio Tracig Service The Pesio Tracig Service holds details of all occupatioal pesio fuds. If you eed help to trace pesio beefits from previous employmet, for example if you leave ad lose touch with your employer, you ca ask for free help by cotactig: Pesio Tracig Service The Pesio Service Tyeview Park Whitley Road Newcastle upo Tye NE98 1BA Telephoe: Website: The Pesios Regulator (TPR) TPR is resposible for regulatig UK pesio arragemets. It has the power to itervee i the ruig of a pesio scheme where Trustees, employers or professioal advisers have failed i their duties. TPR ca be cotacted at: The Pesios Regulator Napier House Trafalgar Place Brighto East Sussex BN1 4DW Telephoe: Website: Office of the Iformatio Commissioer (Data Protectio) Iformatio about you ad ay depedats who may beefit from your membership of the Scheme is held o computer ad withi persoal files. The Trustee eeds to hold this iformatio for the purposes of admiisterig the Scheme ad calculatig ad payig beefits. This may iclude sesitive persoal data, such as iformatio about your health or family circumstaces. You will, therefore, be asked for express writte coset to the processig of data about you, icludig sesitive persoal data, as required by the Data Protectio Act It may also be ecessary for the Trustee to pass this iformatio to the Compay, Scheme actuary, auditors, legal advisers ad other third parties for the purpose of admiisterig the Scheme. The Trustee is registered uder the Data Protectio Act The Data Protectio Act gives you the right to check your persoal details held by the Trustee ad you may do this by cotactig AA Pesios Admiistratio. The Trustee reserves the right to charge for the provisio of these details. I cases of dispute, you may refer ay data issue to the Office of the Iformatio Commissioer at the followig address: The Iformatio Commissioer s Office Wycliffe House Water Lae Wilmslow Cheshire SK9 5AF Telephoe: Website: 16 The AA Pesio Scheme STAFF sectio

17 The legal backgroud Trust status The Staff Sectio is a sectio of the AA Pesio Scheme ( the Scheme ). The Scheme is set up as a trust, the assets of which are kept etirely separate from the Compay ad may oly be used to pay beefits to ad i respect of members ad the expeses of ruig the Scheme util the Scheme is woud up. All the beefits from the Scheme are provided out of the fuds of the trust. Your beefits are oly payable as described i the Rules, ad you may ot use your beefits as security agaist ay loa or assig them to ayoe, i.e. a mortgage. If you attempt to do so, the Trustee may decide that you are o loger etitled to beefits from the Scheme. The trust is admiistered by a trustee compay called A.A. Pesios Trustees Limited ( the Trustee ). The Trustee s role is to esure that the Scheme is maaged accordig to the Rules, ad that its assets are ivested prudetly i lie with the Statemet of Ivestmet Priciples. Its board is made up of employer-appoited ad member-omiated directors, whose ames appear i the Scheme s aual report, which the Trustee publishes each year, ad which reports o progress over the precedig twelve moths. Copies are available from AA Pesios Admiistratio. The Rules are the goverig documetatio of the Scheme ad i the evet of ay ambiguity or icosistecy betwee the Rules ad this guide or ay aoucemet; it is the Rules that will apply. This booklet is a guide ad does ot cofer ay etitlemet to beefits. The Compay is committed to the Scheme ad has every itetio of cotiuig it, but future coditios caot be foresee. The Scheme s formal documets give the Pricipal Employer the right to amed or termiate the Scheme (without replacig it) at ay time - i the case of amedmet, by agreemet betwee the Pricipal Employer ad the Trustee. I the evet of the Scheme beig termiated, beefits for pesioers, members ad other beeficiaries would be provided i accordace with the Rules. The fudig of the Scheme aims to esure that the assets are, i ormal circumstaces ad assumig the Scheme cotiues as a cotributory arragemet, sufficiet so that beefits ca be paid as ad whe they become due. If the assets prove isufficiet, the Compay would be resposible for makig up the shortfall to the extet required by legislatio. However, you should be aware that, if the Scheme is discotiued, eve if the shortfall required by legislatio is met, there will ot ecessarily be sufficiet assets to provide your beefits i full. The Pesio Protectio Fud The Pesio Protectio Fud (PPF) compesates members of eligible pesio schemes whe their employer becomes isolvet (as defied by the Pesios Regulator), ad their scheme does ot have sufficiet assets to pay beefits to members. The PPF provides betwee 90% ad 100% compesatio to members, depedig o whether they are curretly receivig a pesio. Future pesio icreases are oly provided o a limited basis. The beefit payable to a scheme member from the PPF is restricted to a maximum. For more iformatio o the PPF, visit its website at: The AA Pesio Scheme STAFF sectio 17

18 HM Reveue & Customs registratio The Scheme is registered with HM Reveue & Customs (HMRC) uder the Fiace Act As a sectio of the Scheme, the Staff Sectio ca oly therefore provide certai beefits. Registratio with HMRC also meas that most cotributios paid are eligible for tax relief ad ivestmet icome eared by the Scheme is largely free of tax. Your pesio will, however, be subject to icome tax whe it is paid. HMRC also imposes a Lifetime Allowace o the total amout of pesio savigs you ca have before you suffer additioal tax charges (see page 13). Statemet of ivestmet priciples The Trustee must prepare a statemet cocerig decisios about ivestmet of the Scheme s fuds, as required by law, ad review it from time to time. The Trustee must seek idepedet advice from a suitably qualified ivestmet adviser ad cosult with the pricipal employer i arrivig at this statemet. Copies are available from the AA Pesios Team. Pesios ad divorce If you are a member of the Scheme ad divorce, the accumulated retiremet icome ad other beefits you have built up may be dealt with i oe of three ways. A divorce court may: 1. Offset them agaist other assets i a fiacial settlemet. The total value of your pesio beefits ad other beefits is take ito accout alogside all the assets such as your house, car ad other property. Your beefits are ot therefore divided, but are offset agaist other assets. 18 The AA Pesio Scheme STAFF sectio 2. Earmark part of your accumulated retiremet icome ad other beefits whe payable. I this case, a proportio of your pesio beefits (o retiremet) or lump sum (o retiremet or death) is made the subject of a attachmet order ad earmarked for paymet to your ex-spouse whe you retire or die. 3. Share your pesio beefits ad other beefits. This method sets out to achieve a clea break of retiremet beefit rights whether they are still beig built, are deferred or are i paymet. Your beefits i the Scheme are valued whe a sharig order is made ad your full etitlemet is divided betwee you ad your ex-spouse as set out i the order. The ex-spouse s etitlemet is the trasferred ito his or her occupatioal pesio scheme or a persoal or stakeholder pesio, or aother suitable type of isurace cotract of the ex-spouse s choice. Where the ex-spouse makes o trasfer electio, the Trustee will trasfer the etitlemet to a exteral arragemet of its choice. If you eed more details o divorce, you ca request our iformatio pack from AA Pesios Team. Also, please do ot forget to complete a ew Expressio of Wish form which you ca dowload from our website

19 Iformatio, help ad advice Techical terms explaied The websites listed below provide iformatio o pesios, fiacial plaig ad State beefits. Certai words ad phrases with techical meaigs are used i this booklet - these are explaied below ad appear i bold prit throughout the text. The Departmet of Work ad Pesios provides iformatio ad advice o pesios, savigs ad State beefits. You ca also request a State Pesio Forecast here. This site cotais iformatio about issues icludig tax, Natioal Isurace ad tax credits. The official site for persoal idepedet fiacial advice. You ca fid geeral advice ad cotact details for a adviser i your area. Active Status - The status of a Cotributig member. You cease to be of Active status whe you opt out of, or otherwise leave the Scheme. Additioal Volutary Cotributios (AVCs) Cotributios you elect to pay which are over ad above your miimum cotributios. Basic salary - Basic aual rate of pay excludig commissio, overtime ad other varyig paymets. CARE - The Career Average Revalued Earigs sectio of the Scheme. Beefits uder the CARE sectio of the Scheme are based o each year s pesioable pay which may be revalued to help protect your beefits agaist iflatio. Child - A legitimate, legitimated or adopted child who is (uless bor after your death) livig with you or fiacially depedet upo you to a substatial extet (as to which the Trustee s decisio is fial) ad who is uder age 18 or, if the Trustee decides to treat them as a child, is over age 18 but uder age 22 ad receivig full time educatio or vocatioal traiig. A child bor after you cease to be i pesioable employmet does ot qualify as a child uless the Pricipal employer decides otherwise. Compay - The Automobile Associatio Limited ad its subsidiary ad associated compaies which participate i the Scheme. Where applicable, this refers to the Compay that employs you. Cotributig member - A employee of the Compay who is cotributig to the Scheme. Earigs - Basic remueratio plus fluctuatig emolumets to the extet the Pricipal Employer has otified you that they are to be icluded. The AA Pesio Scheme STAFF sectio 19

20 Notioal Earigs Cap - This is a limit o the amout of a member's earigs o which pesio cotributios ad beefits are based ( 149,400 i the 2015/16 tax year). Fial pesioable earigs - The higher of: your pesioable earigs over the 12 moths edig o the date of retiremet; ad the highest pesioable earigs i the previous 5 tax years edig o the date of retiremet. Guarateed miimum (GMP) - The miimum amout of pesio that the Scheme must pay to satisfy the requiremets for pesio cotractig-out of the State Pesio arragemets, i respect of Scheme beefits built up before 6 April Miimum pesio age - The miimum age that you ca take your pesio (uless due to ill-health). Uder prevailig legislatio this is age 55. Normal retiremet date - The last day of the moth i which you reach age 65. Pesioable earigs - Full-timers: Earigs less a deductio equal to the Lower Earigs Limit i force durig the period over which earigs are assessed. The Lower Earigs Limit is a amout published each year by the Govermet ( 5,824 for 2015/16) ad is very close to the aual basic State Pesio for a sigle perso. Part-timers: Earigs less a deductio of a proportio of the Lower Earigs Limit, depedig o the hours you are cotracted to work. For example, if you are cotracted to work half the usual stadard hours of 36¼ hours per week, the deductio would be half the Lower Earigs Limit. The Pricipal employer determies stadard full time hours for this purpose. Pesioable employmet or service - Complete years ad moths of Scheme membership, plus ay years ad moths credited to you from aother registered pesio arragemet for which a trasfer paymet was received by the Scheme ad for which added years were grated. Pricipal employer - AA Developmets Limited. 20 The AA Pesio Scheme STAFF sectio Depedat - A perso who was fiacially depedet o you to a substatial extet immediately prior to your death ad to whom the Trustee decides to pay a pesio from the Scheme. I determiig whether a perso was so depedet the Trustee s decisio is fial. Rules - The formal rules of the Scheme which defie all your beefit etitlemets uder the Scheme, ad also comprise the Scheme s trust deed. A copy is available from AA Pesios Admiistratio, but a small charge may be made to cover ay reproductio costs. The Rules will be used to determie beefits ad override ay other commuicatio or beefit illustratio, icludig this booklet. Scheme - The AA Pesio Scheme (Staff Sectio). Spouse - Your husbad, wife or Civil Parter (as defied by the Civil Partership Act) who, at the time of your death, was ormally livig with you. If you married or etered a civil partership after your pesioable employmet eded, you husbad, wife or civil parter would ot qualify as your spouse uder the Scheme Rules uless the Pricipal employer decides otherwise. State Pesio Age - State Pesio Age (SPA) i the UK will vary based upo geder ad date of birth. Uder the curret rules for me bor before 6th December 1953 it s 65 ad for wome bor o or before 5 April 1950 it s 60. Trasfer-i - A paymet from a exteral pesio arragemet (occupatioal, persoal or stakeholder) to the Scheme to secure additioal beefits. Trustee - A trustee compay - A.A. Pesios Trustees Limited. The Trustee s role is to esure that the Scheme is maaged accordig to the Rules, ad that its assets are ivested prudetly i lie with the Scheme s statemet of ivestmet priciples. Its board is made up of pricipal employer-appoited ad member-omiated directors, whose ames appear i the Scheme s aual report, which the Trustee publishes each year, ad which reports o progress over the last year.

21 If you have ay queries relatig to your payslip please cotact: This booklet has bee produced by AA Pesios Trustees Limited. If you have ay queries relatig to the Staff Sectio or to your beefits you should cotact the AA Pesios team i the first place. Their cotact details are: AA Payroll Processig Faum House Basig View Basigstoke Hampshire RG21 4EA The AA Pesios team Ao Hewitt PO Box 196 Huddersfield HD8 1EG Telephoe: (Helplie umber) Telephoe: [optio 2] payroll.processig@theaa.com You ca also cotact the AA Pesios Departmet: AA Pesios Departmet Faum House Basig View Basigstoke Hampshire RG21 4EA Telephoe: [optio 3] AA.pesios@aohewitt.com Whe you call the Helplie the followig questios will always be asked: Full Name; Full Address; Date of Birth. pesios@theaa.com plus oe of the followig additioal questios: Pesio referece umber; Date joied scheme (year/moth); Date joied compay (year/moth); Amout of last cotributios (to the earest poud); Amout of last paymet (to the earest poud pesioers oly); Date pesio commeced (year/moth pesioers oly). We are here to help you so please do what you ca to be prepared before callig. If you caot pass the data security questios the we will ot be able to divulge ay iformatio. Telephoe: AA.pesios@aohewitt.com Web: AA Pesios Trustees Limited 2015 Staff EB Desiged ad produced by Cocert Cosultig 02 December 2015 V1 Cotact details