Guide to your New Pension Benefits

Transcription

1 Oxford University Press Group Pension Scheme Guide to your New Pension Benefits This guide outlines the new CARE terms which apply to active members from 1 April

2 Guide to your New Pension benefits from April 2016 This guide outlines the new CARE terms which apply to active members of the Scheme from 1 April It does not include all the provisions relating to benefits you will have built up to 31 March The Scheme offers a competitive package of benefits designed to give you and your family financial security, now and in the future. It also allows you to take advantage of Press contributions towards your benefits. What do you need to do? 1. Read this guide 2. Keep it for future reference You should refer to your current Explanatory Booklet for further details about your benefits built up to 31 March If you have any questions after reading the guide the contact details for the Pensions Team are on page 30 of this guide. The Scheme is governed by formal documents known as the Trust Deed and Rules. In the case of uncertainty or conflict between this guide and the Trust Deed and Rules, the Trust Deed and Rules as amended from time to time will prevail. The information set out in this guide is based on tax rates and legislation as at December

3 What s in this guide? Key Features 4 Who should read this? Employees who are currently active members of the Oxford University Press Group Pension Scheme (the Scheme) Words with technical meanings You can find a Glossary describing all the terms that are in italics on page 32 of this guide. Contributions How much will it cost me? Can I pay more or less? Your Pension How is my pension built up? What is a CARE pension? How will my pension grow? How is a CARE pension worked out? The Prior and New Pension together at Normal Pension Date What if I work part time? Retirement When can I receive my pension? When can I retire without an early retirement reduction being applied? How can I take my pension? What happens if I die? What pension is paid if I die? What lump sum is paid if I die? Leaving the scheme Temporary absence State Pensions and changes to Contracting Out Other important information Help and information Glossary

4 Key Features of the Oxford University Press Group Pension Scheme The advantages of being a member of the Scheme are that you are investing in your future in the following ways: making plans for an income (pension) when your retire your pension receives protection against inflation you can choose whether you wish to take your pension early and whether to exchange some of it for a lump sum your financial dependants may receive a pension if you die a cash sum is payable if you die while contributing to the Scheme The guide provides further details about these benefits. 4

5 How much will it cost me? If you have a 1/60th pension accrual rate you will pay 10% of Pensionable Salary If you have a 1/80th pension accrual rate you will pay 6% of Pensionable Salary Your contributions are set at 1 April each year. The only exception is if you change your working hours during the year when they will be adjusted accordingly. Your contributions are deducted from your gross pay, before your tax code is applied, which means you get automatic tax relief. If you take part in Pension Exchange, your contributions which would normally be paid by you from your salary are paid by OUP instead. Your salary is then reduced by the same amount which results in you, and OUP, paying lower National Insurance (NI) contributions. Further details about Pension Exchange can be obtained from the Pensions Team. For example if you are a basic rate tax payer, and paid 2,000 each month before tax, contributions would be calculated like this: 60th pension accrual rate: 10% of 2,000 means you pay 200 per month 80th pension accrual rate: 6% of 2,000 means you pay 120 per month With the tax relief these contributions are reduced from Pension Exchange: Your 200 per month will actually cost you 160 before any NI savings from Pension Exchange 5

6 Can I pay more or less? Can I pay more? If you have a 1/80 pension accrual rate you cannot choose to pay more for the 1/60 pension accrual rate. If you started to pay Additional Voluntary Contributions before 1 April 2006 you can currently pay up to a maximum of 10% of your earnings as Additional Voluntary Contributions. These contributions cannot be made through Pension Exchange. Everyone is entitled to pay additional contributions into an alternative registered pension arrangement such as a personal pension scheme, for further details go to the pensions website Tax relief is only available on pension contributions up to the lower of 100% of your earnings and the Annual Allowance. Additional Voluntary Contributions are Defined Contribution and the value of your benefits will depend on several factors including the amount of contributions paid, the performance of investments, the fees charged and the cost of converting any benefit into an annuity if applicable. Can I pay less? If you have a 1/60 pension accrual rate you can choose at any time to reduce to 1/80 pension accrual rate from the first of any calendar month and pay 6% of Pensionable Salary. Please note there is no opportunity to switch back. If you want to pay less than 6% you will need to opt out of the Scheme. Please note there is no opportunity to re-join the Scheme. What does OUP pay? In addition to the contributions they pay under Pension Exchange OUP pays the balance of the cost of providing your benefits. This means they carry the risks associated with investments and people living longer. 6

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8 How is your pension built up? > From April 2016, your pension will consist of the following elements: Scheme pension accrual to 31 March 2016 The amount of Prior pension will be based on your pension accrual rate of 1/30th, 1/40th, 1/50th, 1/60th, or 1/80th (or a combination of them) and will continue to be linked to your Final Pensionable Salary (until your Pensionable Service ceases, such as when you leave or take your pension). The age at which you can take the Prior pension without reduction for early payment will not change (see page 18). You will still be able to exchange part of your Prior pension for a cash lump sum when you take your pension. Scheme pension accrual from 1 April 2016 You will accrue a pension in the Scheme from 1 April 2016 based on a 1/60th or 1/80th pension accrual rate (called New pension in this guide). The amount of New pension will be linked to your average salary (using Career Average Revalued Earnings, see page 12). The age at which you can take this pension without reduction for early payment is called your Normal Pension Date. It will be increased in line with your State Pension Age. You will be able to exchange part of your New pension for a cash lump sum when you take your pension. State pension A new single-tier State pension will be introduced from April 2016 which will be paid from State Pension Age (see page 27). You will accrue this pension based on qualifying years of National Insurance contributions or credits. Any State pension you build up will be paid in addition to your Scheme pension. NB: You don t have to wait until your State Pension Age to take your pension. You must take your Prior pension and New pension at the same time. 8

9 Pension accrual Pension accrual means the rate at which you build up your New pension for each Scheme year. From 1 April 2016 your pension will be the total of the pension you built up for your Pensionable Service up to 31 March 2016 (Prior pension), and the pension you will build up in respect of Pensionable Service from 1 April 2016 (New pension). Your pension accrual rate for your New pension will either be 1/60th or 1/80th. Your New pension will be based on Career Average Revalued Earnings (CARE) (see page 12 for more detail about how this is worked out). This means that the CARE pension that you accrue for each Scheme year while you are in Pensionable Service from 1 April 2016 will be calculated using: i Your total pension when you leave Pensionable Service will continue to be restricted by the Scheme Maximum which, from April 2016, will be two thirds of your Final Remuneration. This may mean that certain members, who have built up a large Prior pension, will accrue a lower New pension than is described in this guide in respect of Pensionable Service from 1 April Pensionable Salary is subject to the Earnings Cap for contributions and each year s CARE accrual if you joined the Scheme after 31 May 1989 (see the Glossary for further details). Pension accrual rate of 1/60th or 1/80th x Your Pensionable Salary for that Scheme year + The CARE pension that you accrue for each Scheme year from 1 April 2016, while in Pensionable Service, will be increased by the lower of the Consumer Price Index and 5% per annum up to the date your Pensionable Service ends (see page 12 for example) NB: There will be no change to your pension accrual rate for your Prior pension 9

10 What is a CARE pension? Your New pension will be based on Career Average Revalued Earnings (CARE). This means the CARE pension that you build up for Pensionable Service from 1 April 2016 will be calculated as follows: CARE pension accrued in a Scheme year CARE inflation increase STEP 1 The CARE pension that you accrue in a Scheme year will be calculated by multiplying your pension accrual rate (either 1/60th or 1/80th) by your Pensionable Salary. The CARE pension and CARE inflation increases will be added together to work out your total CARE pension STEP 2 In order to provide some inflation protection, the CARE pension that you accrue (Step 1) will have a CARE inflation increase applied in future years, whilst you continue in Pensionable Service. This is determined by the lower of the Consumer Price Index (CPI) and 5% per year. CPI is measured over the twelve month period to the September before the relevant 1 April (or such other period determined by the Trustees with the agreement of OUP). The CARE inflation increase will be applied on 1 April a year after it was accrued. Therefore, the CARE pension accrued for the Scheme year 1 April 2016 until 31 March 2017 will be increased for the first time on 1 April NB: Your Career Average Revalued Earnings will only take account of Pensionable Salary from 1 April Years of CARE pension accrual 10

11 How will will my my Pension pension grow? Your pension at Normal Pension Date will be worked out by adding together your Prior pension and New pension as described in the Pension accrual section (page 9). It will grow as shown below: For more details of how your Prior pension is calculated please see your current booklet NB: The amount of your Prior pension will continue to be linked to your Final Pensionable Salary while you are in Pensionable Service. Prior pension will continue to grow with increases to your Final Pensionable Salary Pension accrual to 31 March New pension will grow with CARE pension increases (see page 12) Pension accrual from 1 April PRIOR NEW Pensionable Service used to work out your Prior pension will be fixed at 31 March 2016 Pensionable Service used to work out your New pension will start from 1 April 2016 up to the date you take your benefits or earlier ceasing Pensionable Service 1 Based on 1/30th, 1/40th, 1/50th, 1/60th, or 1/80th pension accrual rate (or a combination of them). 2 Based on either 1/60th or 1/80th pension accrual rate 11

12 How is a CARE pension worked out? The example below shows how a member s CARE pension will be worked out for an Active Member over five years of Pensionable Service with a 1/80th pension accrual rate. Assuming notional CPI increases of 3.1%, 6.0%, 2.2%, and 2.7% per year, the CARE inflation increases will be 3.1%, 5.0%, 2.2%, and 2.7% per year. You will see that in the second year of revaluation the 6.0% CPI inflation has been limited to 5%. Year Pensionable Salary Pension accrual rate Annual CARE pension that you accrue in Scheme year CARE inflation increase 3.1% 5% 2.2% 2.7% 1 30,000 x 1/80 = = ,800 x 1/80 = = ,200 x 1/80 = = ,400 x 1/80 = = ,000 x 1/80 = Total annual CARE pension including pension increases CARE pension accrued after 5 years 2, i Note that in a time of deflation, your CARE pension would reduce unless OUP decides at the time not to apply a reduction to reflect the deflation. If CPI inflation exceeds 5%, OUP may consider granting a higher CARE inflation increase. 12

13 The Prior and New Pension together at Normal Pension Date Prior Pension Pensionable Service to 31 March years (assume full time) Prior Pension Accrual Rate Final Pensionable Salary 1/50 x 36,000 x 10 1/50 36,000 = 7,200 PLUS New Pension New Pension calculated on page 12 2,177 Total Pension Total Pension at Normal Pension Date 9,377 each year 13

14 What if I work part time? If you change your working hours, the way your Pensionable Service is calculated uses the same principles for both your Prior and New pension. Broadly, if you work part time hours now or in the future, we will calculate your benefits using a full time equivalent Pensionable Salary and pro-rate your Pensionable Service. For example, a member who works full time (35 hours per week) will accrue one month s Pensionable Service for each calendar month at work. If this member switches to working 17.5 hours per week, Pensionable Service will be pro-rated and half a month s Pensionable Service will accrue for each calendar month (1 month x 17.5/35 = 0.5 month). The example below (which is based on the previous example) shows how a member s New pension will be worked out over five years of Pensionable Service based on a 1/80th pension accrual rate. It assumes that for the last three years the member switches from working 35 hours per week to 17.5 hours per week and their actual salary is correspondingly halved (although for the purposes of pension calculation this is converted to a full time equivalent Pensionable Salary as shown below). The same notional CARE inflation increases of 3.1%, 5.0%, 2.2%,and 2.7% per year have been used, and the 6% CPI inflation has been limited to 5% as on page 12. Year Pensionable Salary Pension accrual rate Annual CARE pension that you accrue in Scheme year CARE inflation increase 3.1% 5% 2.2% 2.7% Total annual CARE pension including pension increases 1 Full time 30,000 x 1/80 = = Full time 30,800 x 1/80 = = Part time 33,200 x.5/80 = = Part time 34,400 x.5/80 = = Part time 36,000 x.5/80 = CARE pension accrued after 5 years 1,

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16 When can I receive my pension? Currently, you may leave Pensionable Service and take all your benefits, albeit potentially reduced as described below, at any time from age 55 with OUP s consent (although certain members do not require OUP s consent from age 60). You must take your Prior pension and New pension at the same time. The age at which you can take your Prior pension without reduction for early payment will not change. Therefore if your Prior Normal Pension Date was age 60, or you were eligible to take your pension at age 60 without a reduction for early payment, you will retain that right for your Prior pension. If your New pension is paid before your new Normal Pension Date it will be reduced to account for early payment. Please see the next section for further details. If you take all your benefits at your new Normal Pension Date, both your Prior pension and New pension would be paid without an early retirement reduction or late retirement uplift. There continues to be many different retirement options available, and no one will need to delay taking their benefits to their new Normal Pension Date. Ill health retirement If the Trustees and OUP determine that you have stopped working for OUP before Normal Pension Date due to incapacity you may be able to receive an immediate pension. This would be calculated in the same way as if you take it at Normal Pension Date, but based on your Pensionable Service at the date you take your pension. It would not be reduced for early payment. In order to qualify, you need to satisfy the relevant illhealth tests under the Scheme s Rules and applicable tax legislation. The Trustees need to be satisfied that your illhealth is sufficiently serious to prevent you from following your normal occupation or to impair seriously your earning ability. If you are under 55, current tax legislation requires that the Trustees must receive medical evidence that you are (and will continue to be) incapable of carrying on your occupation, and that you have in fact ceased to carry on your occupation. 16

17 Before Normal Pension Date If you take your pension early, your pension would be calculated in the same way as if you take it at Normal Pension Date, but it would be based on your Pensionable Service at the date you take your pension and it would be reduced for early payment. This is to take account of the longer period for which it is going to be paid. However, in some cases your Prior pension may not be reduced if paid before Normal Pension Date (please also see page 18 for an example of how this works). The process for setting early retirement reduction factors has not been changed. The Trustees regularly review the early retirement factors to ensure they remain appropriate. These factors are therefore subject to change over time. Flexible Retirement Currently, with OUP s consent, you may take your pension from age 55 whilst continuing to work for OUP, and your pension may be reduced for early payment as described in the previous section. If you choose this option, you will not be able to build up any further benefits under the Scheme and will not be able to re-join the Scheme at a later date. Under this option, death benefits will be payable (as set out on pages 20 and 22) on the basis you have taken your benefits. This option is only available at the discretion of OUP, and its availability and terms may change from time to time. After Normal Pension Date If you continue working for OUP beyond your Normal Pension Date you will have the choice of: Remaining as an active member in the Scheme, and continuing to accrue New pension (your Prior pension would continue to be linked to Final Pensionable Salary) until you take your benefits on leaving employment, or opt out of the Scheme. If you choose this option you will continue to pay normal member contributions, and have full death in service benefits. A late retirement uplift would not be applied in respect of your Prior pension, while you continue to accrue New pension, or in respect of your New pension. Ceasing to contribute as an active member at Normal Pension Date or later. This would stop further accrual of New pension and the link of your Prior pension to Final Pensionable Salary would cease. Your benefits would not normally come into payment until you actually leave employment. Your pension (i.e. both Prior pension and New pension) will be increased to reflect late payment after you stopped being an active member. Taking your pension while remaining in employment. See the section on Flexible Retirement for details. 17

18 When can I retire without an early retirement reduction being applied? > The examples below illustrate how early retirement works from 1 April 2016 Tom joined the Scheme in 1990 and has an existing right to take his pension unreduced from age 60. Normal Pension Date: 66 Age at which he can take Prior pension without reduction for early payment: 60 The table below shows whether a reduction applies to each part of his pension. Prior pension (accrual up to 31 March 2016) New pension (accrual from 1 April 2016) How does this work: On early retirement, the reduction for early payment is calculated separately for your New pension and Prior pension and then the two pension amounts are added together. NB: There will be no change to the age you can take your Prior pension. KEY: Reduction applied No reduction Negin joined the Scheme in 2007 and so currently can take her pension unreduced from age 65. Normal Pension Date: 67 Age at which she can take Prior pension without reduction for early payment: 65 The table below shows whether a reduction applies to each part of her pension. Prior pension (accrual up to 31 March 2016) New pension (accrual from 1 April 2016)

19 How can I take my pension? > Your Prior pension and New pension must be taken at the same time. This means that the two parts of your pension cannot be split by taking your Prior pension at one age and your New pension at another. Lump sum option Whenever you decide to take your pension, you will still be able to exchange part of your pension for a lump sum, in accordance with the rules of the Scheme (which may change over time). The calculation of your lump sum is complex, and depends on the amount of pension you have built up at the date you take your benefits. The terms for exchanging pension for lump sum are set by the Trustees and may change in the future. Pension Increases Your pension and those of your spouse (including same sex/civil partner) or financial dependant and children will be increased each year after they start to be paid, as required by current legislation, in the following way: Any Guaranteed Minimum Pension earned between April 1988 and April 1997 will increase each year by 3% or inflation, if lower. Your pension earned between April 1997 and April 2005 will increase each year by 5% or inflation, if lower. Your pension earned since April 2005 will increase each year by 2.5% or inflation, if lower. Further discretionary increases may be given on your pension but are not guaranteed. Members who started service with OUP before 1 April 2006 have a minimum guaranteed increase of 1% per annum being paid on the whole of the pension. 19

20 What pension is paid if I die? We have set out in the table below a summary of the pensions that are payable on your death. Survivors pensions will be calculated as a percentage of a member s pension entitlement, as is currently the case under the Scheme. However, a member s pension entitlement (on which the percentage is calculated) will reflect the New pension from 1 April When? Pension payable to your spouse (including same sex spouse) or civil partner of 50% of your pension (see the Notes section) Children s pensions of 25% of your pension for the first child. If there are two or more children they will share a pension of 50% of your pension (see the Notes section) Notes to explain how the pension is calculated Death as an active member Based on the sum of 1) the pension you built up to the date of your death, plus 2) a prospective pension to Normal Pension Date, based on your CARE accrual rate and Pensionable Salary at the date of your death. Death as a deferred member Based on your deferred pension, including any revaluation up to the date of your death. Death after taking benefits Based on your pension in payment at the date of death (or, if you took cash at retirement in exchange for pension, the pension, (including increases), you would have received had you not given up pension in exchange for cash). 20

21 i As explained in the Glossary, the definition of spouse includes same sex spouses, and therefore a surviving same sex spouse is entitled to the same Scheme benefits as a surviving opposite sex spouse except in relation to the amount of any Guaranteed Minimum Pension. NB: If your spouse/civil partner is more than ten years younger than you, the spouse/civil partner s pension will be reduced. The spouse/civil partner s pension will be paid monthly in advance for the rest of your spouse/civil partner s life. The Trustees have discretion to pay a pension to one or more of your dependants. In doing so, the Trustees will have regard to your Expression of Wish form, and will consider unmarried partners (of the same or opposite sex) in the same way as married partners. The Trustees may request such information as they feel is necessary to establish if any person is a dependant. Children s pensions are payable to natural or legally adopted children up to the age of 18, or under age 23 and in full time education, to the satisfaction of the Trustees. In order to ensure that the lump sum death benefit is not subject to Inheritance Tax, the Trustees must make the final decision as to who receives it. The Trustees will take your wishes into account. To ensure that they are aware of those wishes, you are strongly advised to complete an Expression of Wish Form which should be returned to the Pensions Team. If your circumstances change later, you should complete a new form. The form can be downloaded from the Pensions website: 21

22 What lump sum is paid if I die? A lump sum is payable on your death in the following circumstances: When? Death as an active member Death as a deferred member Death within five years of taking your benefits Lump sum payable to your beneficiaries Four times your Pensionable Salary at the date of death plus a refund of your contributions and the value of any Additional Voluntary Contributions A refund of your contributions and the value of any Additional Voluntary Contributions The balance of five years pension payments Notes Or, if higher, four times your actual earnings in the last twelve months (excluding certain items OUP declares to be non-pensionable). The Earnings Cap does not apply. 1. If no spouse/civil partner s/other dependant s pension (ignoring any children s pension ) is payable, this will include interest at the rate of 3% pa compound for each complete year (compounded annually at the end of each Scheme year) between your date of leaving the Scheme and your date of death. 2. If you die after Normal Pension Date, rather than a refund of your contributions, a lump sum is payable of five years pension payments as if you had taken your pension immediately before death. 3. If you die after your current Prior Normal Pension Date (i.e. age 60 or 65), but before your Normal Pension Date the lump sum payable is the total of a) five years payments of your Prior pension calculated immediately before your death and b) a refund of your contributions paid from 1 April This is calculated without allowing for future pension increases. As is currently the case, lump sums payable under the Scheme are subject to restrictions, such as where an insurance policy does not pay out in respect of a member. 22

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24 Leaving the scheme If you leave OUP and then subsequently re-join, you would not be able to re-join the Scheme. The same would be the case if you opt-out, or have opted out, of membership of the Scheme, irrespective of the date you joined the Scheme. Options on leaving Option 1: If you leave the Scheme with less than two years Pensionable Service, you will be able to choose either a refund of your contributions (excluding those made via Pension Exchange see page 5), or you can transfer the value of your pension benefits to another registered pension arrangement. The refund of contributions will be paid less the amount you have saved on your National Insurance Contributions by being Contracted Out up to April 2016 (which must be paid to the State to restore your State Second Pension rights) and less tax on the balance. Option 2: If you leave the Scheme before retirement with two or more years Pensionable Service, you can either leave the pension that you have built up in the Scheme (a deferred pension), or you can transfer the value of your pension benefits to another registered pension arrangement. For details of how your deferred pension will be increased before Normal Pension Date, please see the next page. Different increases apply with respect to your Prior pension if you defer your pension beyond Prior Normal Pension Date (i.e. age 60 or 65). i You must take your Prior and New pension at the same time. With the Trustees consent you may take your benefits at any time after age 55 (although certain members do not require Trustees consent from age 60). The age at which you can take your Prior pension without reduction for early payment will not change (an early retirement reduction will apply before then). If your New pension is paid before Normal Pension Date an early retirement reduction applies. A late retirement uplift is paid for postponement of your pension after Normal Pension Date. (Where you defer payment of your pension beyond Prior Normal Pension Date (i.e. 60 or 65) the way in which your Prior Pension increases above that age will not change.) The consent of OUP is required if you wish to take your benefits while still in employment, and the consent of OUP and the Trustees is required for postponement beyond Normal Pension Date. 24

25 Increases at or before Normal Pension Date Your pension will be increased before Normal Pension Date (or, if earlier, the date you take it) as required by legislation. Currently this broadly requires your pension (excluding Guaranteed Minimum Pension) to be increased by: the lower of 5% pa compound (2.5% for pensionable service from 6 April 2009) or the rise in inflation measured over the whole period to when you take it (or earlier death) the inflationary measure currently used is CPI The method of revaluation of your New Pension is determined by the Trustees, from options available under legislation. Transfer Values If you are considering transferring your benefits you will be provided with a guaranteed cash equivalent. This is a quotation of the transfer value payable and also gives instructions on how to exercise this option. You will be provided with a guaranteed statement of your cash equivalent on request. The Scheme is not obliged to provide another statement within 12 months of the date of your last request. If you wish to proceed with the transfer you are required to reply within three months of the quotation. If you are interested in transferring, please contact the Pensions Team. The transfer value is the Trustees best estimate, having taken advice from the Scheme Actuary, of the expected cost to the Scheme of providing you with your deferred benefits. The value of the future benefit payments, taking into account increases both before and after the benefit becomes payable, are discounted at an assumed rate of interest. The calculations also take into account the probability of each benefit payment being made. The transfer value calculation currently takes account of the Scheme s history of discretionary pension increases. The basis used to calculate transfer values is consistent with that set out in legislation and the associated guidance. Legislation may require you to take independent financial advice before transferring your benefits. Additional Voluntary Contributions You can transfer your Additional Voluntary Contributions at any time separately to your main benefits. 25

26 Temporary absence Maternity, adoption, paternity, shared parental and parental leave Your membership of the Scheme will continue during any period of paid absence. For those receiving pay (including statutory pay) during this period contributions will continue for as long as you are receiving pay, calculated by reference to the pay you actually receive. When your pay ends you will no longer pay contributions and will not build up a pension for that period (although you will remain covered for the life assurance benefit). Once you return to work you will start paying contributions again and your pension will continue to build up. If you do not return to work at the end of your absence, you will be treated as leaving service on the date your pay stopped and be entitled to a deferred pension. Overseas Secondment Normally, your membership will continue for a maximum of two years from the date your absence starts as long as you remain: 1. On the UK payroll 2. An employee of OUP 3. Resident in the UK for tax and residency purposes 26

27 State Pensions and changes to Contracting Out From the date you joined the Scheme you have been contracted out of the State Second Pension (sometimes called S2P). This means you and OUP have paid less National Insurance contributions and you have built up little, or no, S2P. From 6 April 2016, pension schemes in the UK, including our Scheme, will no longer be able to Contract Out of the State Second Pension because a new single-tier State Pension is being introduced that will apply to employees who reach State Pension Age on or after 6 April Employees who reach State Pension Age before 6 April 2016 will not be affected and will continue to receive their State Pension based on existing rules. What about my Guaranteed Minimum Pension (GMP)? Guaranteed Minimum Pension means the part of your Scheme pension earned up to 6 April 1997, which replaces the State Second Pension. Will I still receive a State Pension? The State Pension will continue to be paid in addition to your Scheme benefits. The single-tier State Pension will replace the flat-rate Basic State Pension, the earnings-related State Second Pension, and the means-tested Pension Credit. However, the amount of your state pension under the new system may be higher or lower, depending on your National Insurance record and your previous contractingout history. A deduction will be applied to your State pension reflecting your period of contracted-out employment with OUP before 6 April 2016 and potentially any other period of contracted-out employment with a previous employer. You can request a state pension estimate by visiting and find more information about state pensions by visiting the Government s website: i You can request a State Pension estimate (based on the current State Pension rules) and find more information about State Pensions, including a single-tier State Pension fact sheet, by visiting the Government s website: 27

28 Other important information Alteration/Termination While OUP has no current plans to do so, OUP has the power to discontinue or, subject to the consent of the Trustees, to alter the Scheme. Assignment of benefits The Scheme s benefits are personal to you and may generally not be passed on to any other person. Any attempt by you to do so could, in extreme circumstances, result in those benefits being forfeited. Annual Report and Accounts Copies of the Annual Report and Accounts can be requested from the Pensions Team. Data Protection Act The Trustees hold and process certain data about you and your survivors in order to administer your pension. The Trustees have both a legal obligation and a legitimate interest to process data relating to you for the purpose of administering and operating the Scheme and paying benefits under it, both within and outside the European Economic Area. The Trustees may hold data about you which is provided by either yourself, the Press, other pension schemes or medical advisers. In the course of administering your pension, the Trustees may pass on data about you to OUP, the Scheme s actuary, auditor, administrator and such other third parties as may be necessary for the administration and operation of the Scheme and provision of benefits. Your data will only be disclosed where it is necessary to achieve these purposes and the Trustees will not disclose your personal information to anyone else without your consent. The Trustees have put in place appropriate technical and organisational security measures in order to prevent the unauthorized disclosure or use of your data. These measures are designed to prevent unauthorized access, use, disclosure or modification of your data as well as unlawful destruction or accidental loss. Under the Act you have a right to access the personal data the Trustees hold about you. You are also entitled to know the purpose(s) for which the data is held and the identity of any person to whom your data has been disclosed. To obtain a copy of any of this information please write to the Pensions Team. If there is any change in your personal circumstances, which may result in a change to the data held in respect of you, or you suspect there are inadequacies in such data, you should notify the Pensions Team. 28

29 Discrimination The Trustees comply with the laws prohibiting unlawful discrimination when they are carrying out their duties. Disputes If you have a complaint about the scheme the Pensions Team should be able to help you resolve it. If you are not satisfied with the response you should write to the Pensions Administration Manager, Oxford University Press, Gt Clarendon Street, Oxford, OX2 6DP. In normal circumstances you will receive a response within two months of your complaint being received and within 15 working days of the decision being taken. If you are unhappy with the response you can refer the matter to the Trustees within two months of receiving it. The Trustees will reply directly to you, where possible within two months of your referral of the complaint, and within 15 working days of the decision being taken. Evidence of Health The Trustees have taken out insurance cover to provide the lump sums payable on death in service. For members earning a salary which exceeds the limits laid down by the insurers, it may be necessary to submit evidence of health before you are covered for the full benefits applicable to your earnings. Pending the production of such evidence, your benefits may be limited to the levels specified by the insurers. Funding of Benefits The Scheme s benefits are funded. This means that money is saved now to meet the cost of benefits that will be payable in the future. You can also contact The Pension Advisory Service (TPAS) in connection with any complaint you may have. See page 30 for details. Divorce The Trustees must comply with any order made by a Court following a divorce or dissolution of civil partnership. 29

30 Help and information Oxford University Press Pensions Team The team administers the Scheme on behalf of the Trustees and can answer your general queries about the Scheme or your benefits. Please note they are not able to give independent financial advice. Phone / (Monday-Friday ) Web Post Oxford University Press, Gt Clarendon Street, Oxford, OX2 6DP The Pensions Advisory Service (TPAS) TPAS is an independent voluntary organization which may be able to offer help with pensions questions and provide free and impartial advice in relation to any issue with the Scheme you have not been able to resolve. The name of a local TPAS advisor can be obtained from any local Citizens Advice Bureau. Phone enquiries@pensionsadvisoryservice.org.uk Web Post 11 Belgrave Road, London, SW1V 1RB The Pensions Ombudsman If TPAS is unable to resolve an issue, you can contact the Ombudsman who can investigate any complaint or dispute of fact or law in relation to a work-based (occupational) pension scheme. It is expected that you will have tried to resolve and failed to resolve your complaint with the Trustees before going to the Ombudsman. Phone enquiries@pensions-ombudsman.org.uk Web Post 11 Belgrave Road, London, SW1V 1RB The Pensions Regulator The Pensions Regulator is able to intervene in the running of the Scheme if the Trustees, OUP, or Professional Advisers have failed in their duties. Phone customersupport@tpr.gov.uk Web Post Napier House, Trafalgar Place, Brighton, BN1 4DW Pension Tracing Service The Pension Tracing Service keeps information of all pension schemes, and will help you to trace any schemes you may have been a member of in the past. Phone customersupport@tpr.gov.uk Web (search for find a lost pension) Post The Pension Service, Whiteley Road, Newcastle Upon Tyne, NE98 1BA 30

31 Obtaining advice on financial matters If you feel you need advice about pension saving or financial planning the following organizations can help: Unbiased.co.uk Unbiased can help you find a local independent financial adviser by typing your postcode into the search engine on the website: PensionWise PensionWise provides guidance if you have a Defined Contribution pension and you are aged 50 or over. You can book an appointment to get free and impartial guidance. Phone Web You can also check whether an adviser you are thinking of using is registered to give financial advice with the Financial Conduct Authority Phone Web The Money Advice Service The Money Advice Service publishes useful guides on all aspects of financial planning, including pensions, investments and getting financial advice. Phone Web 31

32 Glossary In this Glossary, we have given a brief explanation of terms commonly used in this guide. Accrual rate The rate at which your benefits build up for each year of Pensionable Service in the Scheme. It is expressed as a fraction e.g. 1/80th. Active Member A member in Pensionable Service. Additional Voluntary Contribution Voluntary contributions paid for Defined Contribution benefits. Annual Allowance The limit on the maximum capital value of all your pensions across all Registered Pension Schemes that you can save tax efficiently each year. The limit is 40,000 in 2016/2017. However, for those with adjusted income of more than 150,000, the limit reduces on a tapered basis by 1 for each 2 of adjusted income over 150,000, up to 210,000. Adjusted income broadly includes your taxable income from all sources, not just OUP, together with the value of your pension benefits from OUP. Charitable donations are excluded. Those with a threshold income of not more than 110,000 are not affected by the taper. This is broadly your taxable income of all sources, less your pension contributions. Career Average Revalued Earnings (CARE) The basis on which the Scheme benefits are calculated for Pensionable Service from 1 April 2016, as described in this guide. Child Child is your natural child or lawfully adopted child who is under the age of 18, or is aged 23 or under and for the time being is engaged in full time education or vocational training. Civil partner A civil partner is the person who, at the date of the member s death, is in a registered civil partnership with the member under the Civil Partnership Act Consumer Price Index (CPI) Is one of the measures of inflation used by pension schemes and legislation to calculate pension increases. CPI tracks inflation based upon the changes in the price of a basket of consumer goods bought in the UK. Where CPI is used in this guide it means Consumer Price Index, or such other measure, agreed by OUP and the Trustees, used for calculating statutory inflationary increases from time to time. However, where it is used in the context of CARE increases for an active member, then it means Consumer Price Index, or such other measure agreed by OUP and the Trustees from time to time. Contracted Out A pension scheme is contracted out before 6 April 2016, where it provides benefits in place of the State Second Pension in accordance with legislation. Deferred Member A member who has left Pensionable Service entitled to a pension under the Scheme that has not yet started. 32

33 Defined Contribution Is a type of benefit where a member builds up a pot of money, based on contributions paid and investment growth that is used to provide the member s chosen benefits. Dependant A person other than your spouse or civil partner who, at your date of death, was either financially dependent on you or in a relationship of mutual financial dependence with you, or, dependent on you because of physical or mental impairment. Earnings Cap This limits Pensionable Salary, Final Pensionable Salary and Final Remuneration for members who joined the Scheme after 31 May It does not apply for the purposes of the lump sum death benefit if you die as an active member. The pensionable salary limit on which contributions are based for the 2015/16 Scheme Year is 145,200. The level for pension benefits from 6 April 2015 is 147,000 and is expected to increase each year in line with the Consumer Price Index (CPI) unless the Trustees and OUP agree otherwise. Final Remuneration This is only used for the purposes of calculating the Scheme Maximum. Final Remuneration may be a higher figure than Final Pensionable Salary and Pensionable Salary. See also the description of Pension Exchange. Guaranteed Minimum Pension (GMP) The minimum pension which schemes must provide in respect of a period of contracted out scheme membership between April 1978 and April HMRC Her Majesty s Revenue and Customs. Lifetime Allowance The allowance for the total capital value of pension benefits you can save across all Registered Pension Schemes tax efficiently over your lifetime. The limit for the 2016/17 tax year is 1 million. Benefits in excess of this will be taxed at a rate of tax above your marginal rate. New pension Pension accrued from 1 April Final Pensionable Salary This is the earnings definition used to calculate Prior pension benefits. It is complicated to calculate, but it can be based on annual average Pensionable Salary in past Scheme years, or basic annual earnings plus the average of certain fluctuating earnings in past Scheme years. See also the description of Pension Exchange. The calculation of Prior pension uses the higher of Final Pensionable Salary and Pensionable Salary. See your current Scheme booklet for further details. 33

34 Glossary Normal Pension Date The age at which you can take your full pension without reduction for earlier payment. From 1 April 2016 it will be the higher of age 65 and your State Pension Age at the date you take your benefits. (In the unlikely event that your State Pension Age falls before you take your benefits, your Normal Pension Date will remain the same unless your State Pension Age later increases to a higher age). Opting Out Leave the Scheme while remaining in employment. You can opt out by giving one month s notice to the Trustees, but you will not be able to re-join the Scheme. Pension Exchange If you participate in Pension Exchange (part of the salary exchange arrangement), you are giving up the part of your pay that represents your personal contributions to the Scheme (either 10% or 6% for your New pension). OUP will pay an equivalent amount to the Scheme on your behalf. The Prior pension, New pension and all other salary-related Scheme benefits are unaffected by the use of Pension Exchange (i.e. they are determined as if you had never participated). Pensionable Salary This is used to determine contributions and benefits. Broadly, this is based on earnings in the previous Scheme year, excluding certain items. Different items are excluded depending on whether you were employed by OUP before or after 1 April See also the description of Pension Exchange and your current Scheme booklet for further details. Pensionable Service The amount of complete years and months of continuous employment as a member of the Scheme accruing new benefits. Pensionable Service can cease if you leave employment with OUP, opt out of the Scheme, take your benefits from the Scheme, die, or future accrual in the Scheme is otherwise terminated. During absences (as detailed on page 26) different rules apply to the accrual of benefits and when Pensionable Service ceases. Prior Normal Pension Date Your Normal Pension Date before 1 April 2016 (i.e. 60 or 65). 34

35 Prior pension Pension accrued up to 31 March See also the Final Pensionable Salary definition. Registered Pension Scheme The Scheme is a registered pension scheme under the Finance Act This registration facilitates the tax reliefs available through the Scheme. Scheme Maximum This is the overall limit applied to Scheme pensions. From 1 April 2016 this will be two thirds of Final Remuneration calculated when your Pensionable Service ceases. Scheme year The Scheme year runs from 1 April to 31 March. Spouse Spouse means your lawful spouse at the date of your death. This definition includes a lawful same sex spouse. State Pension Age The earliest age that you can take your full State Pension under legislation from time to time. Survivor An individual who is eligible to receive pension benefits, following the death of a Scheme member. Transfers In The Scheme is not currently accepting transfers-in. Trustees The Scheme is set up as a trust, which means that it is legally and financially separate from the Press. The payment of benefits and the management of the Scheme are overseen by Trustees who are responsible for ensuring that the Scheme is run in accordance with the Trust Deed and Rules. The Trustees board comprises an independent Chairman appointed by the Delegates and six Trustees. Three of the Trustees are appointed by the Press and three of the Trustees are elected by the active and pensioner members. Trust Deed and Rules The Trustees administer the Scheme and pay benefits in accordance with the Trust Deed and Rules. You can get a copy of the Trust Deed and Rules from the Pensions Team. In the case of uncertainty or conflict between this guide and the Trust Deed and Rules, the Trust Deed and Rules as amended from time to time will prevail. 35

36 Pensions Department, Great Clarendon Street, Oxford OX2 6DP t: or e: Designed and produced by Crumpled Dog London EC2A 4NU Printed in Great Britain by Oxuniprint, Oxford. 36