The Canal and River Trust Flexible Retirement Plan, managed by Standard Life. Who can join the Canal and River Trust Flexible Retirement Plan?

Transcription

1 The Canal and River Trust Flexible Retirement Plan, managed by Standard Life Who can join the Canal and River Trust Flexible Retirement Plan? You can join the Canal and River Trust Flexible Retirement Plan with Standard Life if you are under age 65 and employed by Canal and River Trust or BWML. You can choose to join at any time as there is no waiting period. If you joined Canal and River Trust after 1 April 2011, you will be automatically enrolled into the Canal and River Trust Flexible Retirement Plan with Standard Life from your start date, providing that you earn more than 442 per month. To join the Canal and River Trust Flexible Retirement Plan with Standard Life, please complete the Employee Authorisation Form and return to the HR Dept in Leeds If you decide to join the Canal and River Trust Flexible Retirement Plan with Standard Life then you will no longer be eligible to join the Waterways Pension Fund (the DB plan) at a later date. If you are already a member of the Waterways Pension Fund (the DB plan), you are not permitted to join the Canal and River Trust Flexible Retirement Plan. Can I opt out of the Canal and River Trust Flexible Retirement Plan? If you wish to opt out of the Canal and River Trust Flexible Retirement Plan with Standard Life then please fill in the Pension Opt Out Form. If you opt out after making contributions for one month only, and your form is received by HR prior to payroll closedown the following month, you will receive a refund of contributions through your salary. If your opt out form is received after payroll closedown in your second pay period, your contributions cannot be refunded. Instead, your contributions may be transferred to another pension arrangement or remain invested with Standard Life. I m a member of the Canal and River Trust Flexible Retirement Plan, am I allowed to contribute to another pension scheme? You are allowed to contribute to more than one pension scheme at the same time, provided your contributions do not exceed the HM Revenue & Customs (HMRC) limit. The current limit imposed by HMRC is 100% of taxable pay capped at 50,000 per year. Canal and River Trust offers a Stakeholder Plan with Friends Life and you may make additional voluntary contributions to the Canal and River Trust Flexible Retirement Plan with Standard Life. The Waterways Pension Fund (DB plan) is closed to new entrants so you are not able to join this plan.

2 Contributing into the Fund How much can I contribute to the Standard Life scheme? The Canal and River Trust Flexible Retirement Plan, managed by Standard Life, allows you to contribute a minimum of 3% of your salary, rising to 5% with matching employer contributions as outlined below: Employee contribution Employer contribution 3% 6% 4% 7% 5% 8% Can I increase my contribution above 5% Yes. You may contribute any percentage of pay up to the HMRC maximum limit (currently 100% of taxable pay, capped at 50,000 per year). If you wish to contribute more than 5% of your salary, then the additional contribution will not be matched by Canal and River Trust. The maximum amount that Canal and River Trust will contribute is 8% of your pensionable salary. If you wish to increase your contribution please complete the Contribution Increase Authorisation Form and return to the HR Dept in Leeds. What is my pensionable salary and how is my contribution calculated? All of your contractual allowances, overtime and additional allowances are classified as pensionable salary. Allowances which are not classified as pensionable salary are car cash allowance, additional travel allowance, temporary increased responsibility and ex gratia payments.

3 How are contributions taken through my salary? Contributions are taken through a salary sacrifice arrangement which means your pension contributions are calculated before tax and National Insurance contributions. If you contribute into the scheme through salary sacrifice you will see 'SMART Pen Adj' on the gross side of your payslip. Please be aware that pension contributions taken through salary sacrifice will have the effect of reducing your National Insurable earnings. As a result your entitlement to Statutory Benefits such as Tax Credits, Maternity Allowance, Incapacity benefits, Jobseekers Allowance, Statutory Maternity, Paternity and Sick pay may be reduced. If you earn below 475 per month or if being a member of the scheme has the effect of taking your hourly rate below the national minimum wage then your pension contributions will be taken as a net deduction and will be shown on the Deduction side of your payslip. Your entitlement to statutory benefits and payments will remain unaffected by your membership of the pension scheme. What are the tax incentives to contributing into a Pension? If you are a member of the scheme through the salary sacrifice arrangement, your pension contributions will be calculated before tax and National Insurance contributions. If you are not able to be a member of the salary sacrifice arrangement because you earn below 475 per month or you earn close to the national minimum wage, your pension contribution will be free from tax only. What happens to my contributions? Each month your contributions and Canal and River Trust s contribution is paid across to Standard Life. Standard Life will then allocate the monies to your personal pension account. When you join the Canal and River Trust Flexible Retirement Plan, Standard Life will send details of how to log onto your personal pension account. If you lose your login details or have any other queries regarding online access, please contact Standard Life on

4 What happens to my contribution during long term absence? This depends on the type of absence and the way in which pension contributions are taken from your salary. For Maternity, Paternity and Adoption leave your contributions will be treated as follows: Salary Sacrifice Arrangement Your pension contributions will be deducted from your Occupational Payments but cannot be deducted from your Statutory Payments or nil pay. During the 39 weeks of your paid leave, Canal and River Trust will make contributions to Standard Life on your behalf, based on your contracted Total Annual Salary. This is to ensure that your pension benefits are calculated as if you had continued to work normally during this period. For the 13 week period of nil pay, no pension contributions will be made to Standard Life by Canal and River Trust. If you are not in receipt of statutory payments, for the first 6 months of leave Canal and River Trust will make contributions to Standard Life on your behalf, based on your contracted Total Annual Salary. For the final 6 months of your leave no pension contribution will be paid to Standard Life by Canal and River Trust. Non salary sacrifice If your pension contributions are taken as a net deduction from salary then your pension contributions will be deducted from all Occupational and Statutory payments. No compensatory payments are made to Standard Life on your behalf. Therefore your pension contributions are based on your lower rate of pay. For Sick Leave, your pension contribution will be treated as follows: Your pension contributions will be deducted from all Occupational and Statutory payments. Any period of nil pay will not be treated as pensionable service. No compensatory payments are made to Standard Life on your behalf. Therefore your pension contributions are based on your lower rate of pay. Other absence If your pay is reduced due for any other absence other than those outlined above, your pension contribution will be based on the lower rate of pay.

5 If your monthly earnings are below 475 and you earn close to the national minimum wage then you are unable to participate in the salary sacrifice arrangement. As a result your pension contributions will be calculated as a percentage of your actual pay when absent. What is the maximum that I can invest in my pension with Standard Life? Your contributions to the Canal and River Trust Flexible Retirement Plan are subject to the limits imposed by HMRC. The current limit imposed on pensions by HMRC is 100% of taxable pay, capped at 50,000 p.a. If you exceed the 50,000 limit, you will liable for income tax on the excess contribution in line with income tax rates. There is also a Life Time Allowance (LTA) imposed on pension saving by HMRC. The LTA is currently 1.8 million, reducing to 1.5 million from 6 April The total value of all of your pension savings must not exceed the LTA over the course of your lifetime, otherwise a tax recovery charge will become payable. When assessing your savings against the LTA, all of your previous and current occupational and private pensions are taken into account. For more information please see here What types of Fund can I invest in? You have the freedom to invest in a range of Investment Funds with differing performance levels and risk associated with them in order to gain the best return on your pension investment. Canal and River Trust have a default fund Canal and River Trust Group Flexible Retirement Plan. If you do not indicate the type of Fund you want to invest in then your monies will be invested in the default fund. However, if you indicate that you would like to invest in another Fund then you may do so. You can choose to invest in more than one investment fund at the same time by filling in the Employee Authorisation Form and indicating the percentage that you would like to invest. The maximum number of Funds you can invest in is twelve. If you do decide to invest in other Investment Funds then you will not be able to invest in the default fund Group Flexible Retirement Plan. For more information on Investment Funds and performance please see here as well as the Fund Selection Tool What happens to my pension if I leave Canal and River Trust before my retirement? You can chose to either continue making personal and direct contributions into your pension account or leave the pension in deferment until you retire. No further contributions will be made by Canal and River Trust once you leave employment.

6 What options are available on retirement? On retirement, the funds built up in your pension account may be used to provide a tax free cash sum (up to 25% of your fund value) and a pension payable for the rest of your life. The amount of pension and tax free cash will be dependent on the amount you have contributed to your Fund, the investment performance and the cost of purchasing an annuity on retirement. The target retirement age for this pension scheme is 65. However, you can choose to draw your pension early from age 55. Further information: For further information please click on the link below: To ensure that your requests are actioned in time for payroll all forms should be returned to the following address by the 5th of the month: HR Pay and Administration Team Canal and River Trust Fearns Wharf Neptune Street Leeds LS9 8PB