Short Brothers. Pension Scheme. b AEROSPACE. Short Brothers Pension Scheme. Page 0

Transcription

1 Short Brothers Short Brothers Pension Scheme Pension Scheme b AEROSPACE Page 0

2 Contents Page No Introduction 2 Definitions 3 Joining the Scheme 5 Contributions 6 Pension benefits 8 Death benefits 12 Leaver benefits 16 State pensions 19 About the Scheme 20 Further guidance for members 23 Page 1

3 Short Brothers Pension Scheme Introduction The Short Brothers Pension Scheme ( the Scheme ) is designed to provide you with benefits after you retire, or if you die while you are employed by the Company. All Members of the Scheme will be eligible to receive the basic State pension (see page 19) in addition to their Scheme benefits. However, Members will not receive a full pension from the State Second Pension (S2P) for the period that they are Members of the Scheme. This is because the Scheme is contracted out of S2P (see page 19). This booklet applies to Members who join the Scheme on or after 13 April The booklet provides a simple guide to your benefits, and the terms and conditions of the Scheme as at the date of this booklet. It explains how to join, what your contributions are, and what benefits are payable to you when you retire and what benefits are payable to your family if you die. The formal documents governing your rights and obligations as a Member of the Scheme are the Rules, which take precedence over this booklet in the event of any disparity. If you would like to see a copy of the Rules, you should contact: The Pensions and Insurance Department Short Brothers plc Airport Road Belfast BT3 9DZ Page 2

4 Definitions A number of special terms are used in this booklet. These are defined below and appear in italics throughout the booklet, for easy reference. Company Dependant Eligible Jobholders Employee Entitled Workers Final Pensionable Earnings Short Brothers plc or another associated or subsidiary employer participating in the Scheme. Anyone who is financially dependent on you, or who was dependent at the time of your death. This includes anyone who shares living expenses with or receives financial support from you, and whose standard of living would be affected by the loss of your contribution or support. The Trustees decision as to whether someone is your Dependant will be final. You are an eligible jobholder if you are aged between 22 and the state pension age (SPA) with earnings over the personal tax allowance. An employee of the Company. You are an entitled worker if you are aged between 22 and 74 and earn below the lower earnings limit for national insurance. The annual average of the Pensionable Earnings received in the last three tax years prior to date of retirement, leaving or death. If you were not in Service for a whole tax year, Final Pensionable Earnings means the yearly equivalent of the Pensionable Earnings received since joining the Scheme. HMRC Member Her Majesty s Revenue & Customs (Inland Revenue) A person who has joined the Scheme. Page 3

5 Short Brothers Pension Scheme Non-eligible Jobholders You are a non-eligible jobholder if you are - Aged or above the SPA-74, with earnings above the personal tax allowance. - Ages with earnings between the lower earnings limit for national insurance and the personal tax allowance. Normal Retirement Date Your 65th birthday. Pensionable Children Pensionable Earnings Children born of or legitimated by your marriage; your stepchildren; children legally adopted by you; and any other children who, in the Trustees opinion, were dependent on you at the time of your death. Your basic pay (excluding any premiums). For any period of working reduced hours the full-time equivalent of your Pensionable Earnings will be used. Pensionable Service Your service after joining the Scheme, calculated as years and complete weeks. For any period of working reduced hours your Pensionable Service will be adjusted accordingly. Scheme State Second Pension Spouse Short Brothers Pension Scheme (SBPS). The State Second Pension (S2P) is the earningsrelated element of the State retirement pension scheme. The normal meaning of husband or wife. It does not include an unmarried partner of either sex. The definition of spouse does not include Civil Partner, however where applicable appropriate benefits will be paid to legal Civil Partners. Page 4

6 Joining the Scheme Under employer Auto Enrolment obligations, new employees will either be auto enrolled into the Short Brothers Pension Scheme (SBPS) or given the opportunity to join voluntarily depending on which criteria they meet. Eligible Jobholders Eligible jobholders will be auto enrolled into the SBPS. Anyone in this category who opts out of the SBPS after being auto enrolled, cannot rejoin the SBPS at a later date. Non-eligible Jobholders Non-eligible jobholders will be given the opportunity to opt in to the SBPS. If not already members they will be auto enrolled into the SBPS at age 22. Anyone in this category who joins and then opts out of the SBPS before age 22 will still be auto enrolled into the SBPS at age 22. Anyone in this category who then opts out after age 22 cannot rejoin the SBPS at a later date. New recruits earning less than the personal tax allowance will be able to join the SBPS voluntarily. If not already members, they will be auto enrolled into SBPS when their earnings first exceed the personal allowance. Entitled Workers Entitled workers will not be auto enrolled but have the right to join SBPS voluntarily. Anyone in this category who opts out of the SBPS after joining voluntarily, cannot rejoin the SBPS at a later date. Page 5

7 Short Brothers Pension Scheme Contributions Your contributions You will contribute 5.5% of your Pensionable Earnings. At present, you receive tax relief on your contributions. In addition, at present, your National Insurance contributions are reduced because the Scheme is contracted out of the State Second Pension. Your contributions are deducted directly from your pay. The first deduction is made at the end of the first pay period after you join the Scheme. Company contributions The Company meets the balance of the cost of providing your Scheme benefits. The rate of the Company contribution is agreed by the Company and the Trustees, after considering actuarial advice. Increasing your benefits You can make Additional Voluntary Contributions (AVCs) in order to supplement your benefits at retirement. If you are interested in this option, you should contact the Pensions and Insurance Office at the address given on page 2 for further information. Salary Sacrifice A voluntary salary sacrifice arrangement (known as NI Saver ) is available. If you opt for NI Saver, your earnings will be reduced by the amount of contributions you would otherwise have paid to the SBPS. You will not then be required to pay contributions to the SBPS. Instead, your notional contributions will be paid by the Company. The benefits of the SBPS will not be affected if you choose to participate in NI Saver. You should note following points of detail relating to the NI Saver arrangement: Page 6

8 The earnings figures used to calculate benefits will be unaffected by salary sacrifice. The lump sum payable on death-in-service or death-in-deferment will include notional contributions paid by members. Salary sacrifice will not be permitted for members with less than two years pensionable service. This means that, where a refund of contributions is payable on leaving pensionable service within two years, the amount of the refund is unaffected. Full details of NI Saver are available in a separate booklet (which can be obtained from Employee Services Centre). Page 7

9 Short Brothers Pension Scheme Pension benefits Your benefits at Normal Retirement Date At retirement, you will receive a pension based on your Final Pensionable Earnings and your Pensionable Service. Pension Your pension at Normal Retirement Date will be calculated as 1/80 x your Final Pensionable Earnings x your Pensionable Service. For each period, a proportionate amount of pension will be payable for each additional complete week of Pensionable Service. For example: If you joined the Scheme on 06 May 2007 and you retired on 05 May 2037, with Final Pensionable Earnings of 24,600, you would have received an annual pension of 9,225 p.a., worked out as 1/80 x 30 x 24,600 = 9,225. Your pension in payment At retirement, your pension will normally be paid four-weekly in advance directly into your bank or building society account. However, the Trustees may pay small pensions less frequently. Pension is taxed in the same way as pay, but you do not pay national insurance contributions on your pension. Pension increases When in payment, your pension will be increased broadly in line with the annual increase in the Retail Prices Index, up to 2.5% each year Spouse s pension If you die after retirement and you leave a Spouse, he or she will receive a Spouse s pension (see page 12 for further information). Page 8

10 Dependant s pension At retirement, you may (if the Trustees agree) give up part of your pension in order to: increase your Spouse s pension; and/or provide a pension for another Dependant, in each case payable on your death. You should contact the Pensions and Insurance Office at the address given on page 2 at retirement if you would like more details. Tax-free cash sum At retirement, you may, with the consent of the Trustees, exchange part of your pension for a cash sum (referred to as Pension Commencement Lump Sum or PCLS) which is currently tax-free. The Trustees will convert pension to cash on a basis determined by the Trustees and acceptable to the HMRC. The amount of PCLS available will depend on the amount of your pension at retirement; however it cannot exceed 25% of the total value of your benefits in the SBPS. You will be advised of how much PCLS is available (and how much pension you will need to exchange) when you are provided with your retirement options. Early retirement Currently you may retire from age 55 with consent of the Trustees and company. If you do so, your pension will be based on your Final Pensionable Earnings and Pensionable Service at the date you retire early, and will be reduced for early payment by such amount as the Trustees determine, after considering actuarial advice. Page 9

11 Short Brothers Pension Scheme Ill-health retirement If you leave service because of Incapacity you may, with the consent of the Company and the Trustees, choose an immediate pension. Your pension will be calculated in the same way as at Normal Retirement Date, but based on your Final Pensionable Earnings and Pensionable Service at the date you retire. Your pension will be reduced for early payment as determined by the Trustees, after considering actuarial advice. If you have completed at least 10 years Company service you may, with the Trustees consent, choose an immediate pension. Your pension will be calculated in the same way as described under Your benefits at Normal Retirement Date (page 8), but as if Pensionable Service included the shorter of: an additional period of 10 years; or the period between leaving service and Normal Retirement Date; or the actual Pensionable Service you have completed The increased pension will be subject to terms and conditions decided by the Trustees. If you retire with an Incapacity pension and your health later improves, your pension may be reduced or suspended. Incapacity is used here to mean physical or mental incapacity which prevents you from following your normal occupation and very seriously impairs your earning capacity. The Trustees decision as to whether you are suffering from Incapacity will be final. Page 10

12 Late retirement If you remain in the Company s service after Normal Retirement Date, you may choose one of the following options: Option 1 Take your retirement benefits at Normal Retirement Date and continue in employment with the Company. Option 2 Continue to contribute to the Scheme and accrue further benefits until you actually retire (up to a maximum age of 75). Option 3 Cease your contributions to the Scheme and defer receipt of your retirement benefits until your actual retirement date. In this case your pension benefits will be calculated at Normal Retirement Date and will be increased by such amount as the Trustees determine, after considering actuarial advice. Page 11

13 Short Brothers Pension Scheme Death benefits Death in Service The Scheme also provides a death benefit if you die whilst employed by the Company. If you die before Normal Retirement Date, while still employed by the Company, the following benefits will be payable: Cash lump sum The amount payable is three times your annual Pensionable Earnings at date of death. A refund of all your contributions (including AVCs and any notional contributions in respect of NI Saver) will be paid in addition. You should complete an Expression of Wishes Form. You should remember to update this form, if appropriate, when your personal circumstances change, e.g. if you marry, separate or divorce. The Trustees may pay the cash lump sum to or for the benefit of your nominated beneficiaries, but are not bound to do so. This is so that these benefits can be paid free of inheritance tax. If there is no obvious beneficiary, the Trustees may decide to pay the cash sum to your estate. Spouse s pension Your Spouse will receive a pension equal to 50% of the pension you would have received if you had stayed in Pensionable Service until Normal Retirement Date, based on Final Pensionable Earnings at the date of your death. In certain circumstances the Trustees may have to reduce the Spouse s pension, for example: if the Trustees decide to pay part of your Spouse s pension to one or more of your other Dependants, or if your Spouse remarries after your death. Page 12

14 However, your Spouse s pension cannot be reduced to less than the minimum Spouse s pension that is required as a condition of contracting out. Children s pensions In addition, if you die leaving Pensionable Children, a children s pension will be paid until the youngest child reaches age 18, or 21 if in full-time education or training approved by the Trustees. The children s pension will be equal to one half of your Spouse s pension, or equal to the Spouse s pension while there is more than one child who qualifies. If your Spouse does not survive you, the children s pensions will be doubled. Death in service after Normal Retirement Date If you die after Normal Retirement Date, while still employed by the Company, the benefits payable will depend on which of the late retirement options was chosen (see Late retirement section on page 11), as follows: Option 1: benefits would be payable as described in the following paragraph (Death after pension starts) Option 2: benefits would be payable as described in for Death in Service (see page 12) Option 3: benefits would be payable as described in the following paragraph (Death after pension starts) Death after pension starts On your death after starting to receive your pension, the following benefits are payable: Spouse s pension Your Spouse will receive a pension equal to 50% of your pension calculated as if you had not Page 13

15 Short Brothers Pension Scheme surrendered any pension for an additional Dependant s pension (see page 9); or taken any tax-free cash at retirement (see page 9). In certain circumstances the Trustees may have to reduce the Spouse s pension, for example: your marriage took place after you started to receive a pension; or the Trustees decide to pay part of your Spouse s pension to one or more of your other Dependants, or your Spouse remarries after your death. However, your Spouse s pension cannot be reduced to less than the Spouse s pension that is required as a condition of contracting out. Children s pensions In addition, if you die leaving Pensionable Children, a children s pension will be paid until the youngest child reaches age 18, or 21 if in full-time education or training approved by the Trustees. The children s pension will be equal to one half of your Spouse s pension, or equal to the Spouse s pension while there is more than one child who qualifies. Cash sum If you die within five years of starting to receive a pension, a cash sum will be paid to or for the benefit of your nominated beneficiaries or other persons as determined by the Trustees. This will be equal to the value of the unpaid balance of your first five years pension payments. The cash sum will normally be paid free of tax. If a Spouse s pension is payable (see page 13) the cash sum will be reduced by an amount equal to the value of the pension payments (i.e. discounted for early payment) that will be made to your Spouse during the remainder of the 5-year period (assuming that your Spouse s pension continues until the end of the 5-year period). If this amount is more than the benefit described in the above paragraph, no lump sum death benefit will be paid. Page 14

16 The value of any future pension payments will be determined by the Trustees after considering actuarial advice. Dependant s pension A Dependant s pension will be payable if, at retirement, you surrendered part of your pension. More detail is given about this on page 9. Funeral Expenses Benefit If you die after starting to receive a pension, a lump sum towards funeral expenses may be payable by the Trustees (or by the Company if over age 75). Some further restrictions may apply. You can obtain further information from the Pensions and Insurance Manager at the address given on page 2. If you die within five years of starting to receive a pension the lump sum benefit payable will be the greater of the funeral expenses benefit and the cash sum described on page 12. The funeral expenses benefit will not be payable where the funeral is prepaid. Death while receiving an Incapacity pension before Normal Retirement Date If you die while receiving an Incapacity pension and before your Normal Retirement Date, your beneficiaries will receive a lump sum of 3 times the annual rate of your Pensionable Earnings at the date of starting to receive your Incapacity pension. This benefit will be reduced by the amount of any benefit paid under Cash Sum (page 12). If the benefit paid under Cash Sum (page 12) is more than the benefit described here, this benefit will not be paid. Page 15

17 Short Brothers Pension Scheme Leaver benefits If you leave having completed 3 months or less qualifying service in the Scheme: you will be reinstated in S2P for the period that you were contracted out through the Scheme; and you will receive a refund of your contributions to the Scheme, less: - your share of the cost of reinstating you into S2P; and - tax, normally 20%, on the balance refunded. If you leave having completed between 3 months and 2 years qualifying service in the Scheme you will be offered the choice of a refund of your contributions (as described in the previous paragraph), or alternatively a transfer value to another registered pension scheme. If you leave with 2 or more years qualifying service in the Scheme, you will be entitled to: leave your benefits in the Scheme as a deferred pension. This is payable from Normal Retirement Date and is based on your Final Pensionable Earnings and Pensionable Service at the date you leave the Scheme and/or the Company, or transfer the value of your deferred pension to another registered pension scheme. A certificate of your benefits will be forwarded to you in due course after you leave Pensionable Service. You cannot continue contributing to the Scheme if you leave the Company. You can leave the Scheme while still employed by the Company by giving the Company and the Trustees one month s notice in writing. Please note scheme leavers cannot rejoin the SBPS scheme at a later date. Page 16

18 Deferred pension Deferred pensions are increased between the date you leave and Normal Retirement Date, in line with price inflation as specified in statutory revaluation orders. For pension accrued before 18 April 2009, these orders are subject to a maximum revaluation percentage of 5% per annum compound over the period. For pension accrued from 18 April 2009, these orders are subject to a maximum revaluation percentage of 2.5% per annum compound over the period. You will be advised of your pension at retirement. Death in deferment If you die before receiving your deferred pension (i.e. before Normal Retirement Date), a refund of your contributions to the Scheme will be paid to or for the benefit of your beneficiaries or other persons as determined by the Trustees. In addition, your Spouse will receive a pension consisting of 50% of your total deferred pension. The Spouse s pension includes increases made between the date of your leaving the Scheme and the date of your death. Transfer You can ask for a quotation of your transfer value at any time (but not more than once a year). The transfer value is an estimate of the value of the benefits you have earned in the Scheme to date. It is calculated in two stages: 1 An estimate is made of the amount of money that would be needed at retirement in order to pay your pension for the rest of your life and to pay for any death benefits. In making this estimation, no Page 17

19 Short Brothers Pension Scheme allowance is included for discretionary increases to the pension in payment. 2 An estimate is then made of the amount of the money which needs to be invested today in order to realise the amount of money needed to pay for your benefits at retirement. This amount is your transfer value. These calculations are based on assumptions about future investment returns, inflation rates and average life expectancy. The transfer value also depends on market conditions at the time of the quotation. For this reason, transfer values can go up and down. However, the amount shown on your quotation will normally be guaranteed for three months. If you do not take a transfer within the guaranteed period, you may lose your right to transfer for the remainder of the year. If you have paid AVCs, they will be transferred at the same time as your Scheme benefits. Page 18

20 State pensions The State provides two types of retirement benefit: the basic State pension; and a pension from the Second State Pension (S2P) State pensions are payable from State pension age, which is currently 65 for men. The State pension age for women will be raised to 65 and will be phased in from 2010 to Women born before 06 April 1950 are not affected by the change. Women born after 06 April 1955 now have a state pension age of 65. Basic State pension To qualify for the full basic State pension, you will need to have paid sufficient National Insurance (NI) contributions during your working life. If you have not paid sufficient NI contributions, you may qualify for a reduced basic State pension or you may be able to make up the difference. You can obtain information about State pension entitlements from The Pension Service (part of the Department for Work and Pensions) or from the Department for Social Development in Northern Ireland. Second State Pension (S2P) S2P was introduced in April 2002 as a replacement for the State Earnings Related Pension Scheme (SERPS) and provides an additional State pension. The Short Brothers Pension Scheme is contracted out of S2P and this means that you will not earn a full S2P pension while you are a Member of the Scheme. Contracting out does not affect your entitlement to the basic State pension. It also means that you pay lower National Insurance contributions. Page 19

21 Short Brothers Pension Scheme About the Scheme The Scheme is governed by a Trust Deed & Rules and is a Registered Pension Scheme for the purpose of HMRC (Inland Revenue). This means that all benefits paid by, and contributions paid to, the Scheme are subject to the various tax rules that apply to Registered Pension Schemes. Money paid into the Scheme is held in a trust. The assets of the trust are kept entirely separate from those of the Company. The Trustees The Trustees are responsible for running the Scheme in accordance with the Rules and for looking after the interests of all members. In order to administer the Scheme, the Trustees need to hold and process information about you. From time to time, this information may need to be passed to the Trustees professional advisers or delegates. At all times this personal information will be held and processed in accordance with Data Protection legislation. Pensions and Insurance Office The Pensions and Insurance Office handles all matters relating to the dayto-day running of the Scheme. Enquiries on all matters should be addressed to the Pensions and Insurance Manager at the address given on page 2 in the first instance. Professional Consultants The Trustees take advice from appointed advisers on legal, actuarial and investment matters. Terms and Conditions Short Brothers plc reserves the right to discontinue the Scheme. The Trustees may amend the Rules with the Company s consent. If the Scheme is discontinued, you will be entitled to benefits as described under Leaver benefits on page 16. You will be given more information if this happens. Page 20

22 Transfers from other pension arrangements Transfers-in to the Scheme are not permitted. Keeping You Informed The Trustees will provide you with: this Scheme explanatory booklet an annual statement of benefits while an active Member of the Scheme a benefit statement on your retirement, death or withdrawal from the Scheme a summary annual report & accounts each year, including the funding statement They will also advise you of any changes affecting your benefits. In addition, you can request the following information: Scheme information Further copies of this explanatory booklet. The Rules of the Scheme. A report on the most recent valuation of the Scheme undertaken by the Scheme s actuary The Trustees Statement of Investment Principles. The Trustees Annual Report and Accounts. Copies of these documents can be provided but there would be a charge made to cover costs. Member information A statement of benefits available for transferring out to another pension scheme. Your rights and options available if you wish to leave Pensionable Service. Members who have left service can request a statement of their benefits once a year. Page 21

23 Short Brothers Pension Scheme If you wish to see any of the above Scheme or Member information, you should write to: The Pensions and Insurance Department Short Brothers plc Airport Road Belfast BT3 9DZ Page 22

24 Further guidance for members Shorts Pensions and Insurance Office The Pensions and Insurance Office is located at the Company s main premises in Belfast. General and specific enquiries about individual entitlements should be referred to the Pensions and Insurance Office. The Pensions and Insurance Office provides a range of services in addition to the day-to-day administration of the Scheme. These include the provision of Scheme information for prospective members, existing members, pensioners and dependants. Resolving Disputes The Trustees wish to resolve any disputes connected with the running of the Scheme. If you have a complaint that cannot be resolved to your satisfaction, you should follow the procedure below or appoint a personal representative to follow the procedure on your behalf. First, state your complaint in writing to: The Pensions and Insurance Manager Short Brothers plc Airport Road Belfast BT3 9DZ You should include your name, address, date of birth, National Insurance Number and the full details of your complaint. If you are acting on behalf of a Member, but are not a Member of the Scheme yourself, you should provide your details as well as the details of the Member you are representing. The Pensions and Insurance Manager will acknowledge receipt of your complaint, usually within five working days, and will inform you of his/her decision within two months. Page 23

25 Short Brothers Pension Scheme As a second step, if you are not satisfied with the response, you should write to the Trustees within six months, stating why you are dissatisfied with the response and providing the information detailed above and a copy of the Pensions Manager s response. The Trustees will acknowledge receipt of your complaint, usually within five working days, and will inform you of their decision within two months. Their reply will include a statement of their decision and an explanation of whether their decision upholds or overrides the previous decision. If you are still not satisfied, you can refer your complaint to the Pensions Ombudsman, or at any time to the Pensions Advisory Service. The Pensions Advisory Service (TPAS) TPAS is available at any time to assist Members and beneficiaries of the Scheme with: any difficulties that cannot be resolved with the Trustees; or in connection with any pension query the Member or beneficiary may have. You can contact TPAS direct at: 11 Belgrave Road LONDON SW1V 1RB Tel No: enquiries@pensionsadvisoryservice.org.uk Your local Citizens Advice Bureau will be able to refer you to TPAS, if necessary. Page 24

26 Pensions Ombudsman The Pensions Ombudsman may investigate and determine any complaints of injustice or disputes of fact or law in connection with the Scheme. Normally the Ombudsman would only be involved if TPAS has not resolved a dispute. The Ombudsman s decision is final and binding, subject only to appeal on a point of law. The Ombudsman can be contacted at: 11 Belgrave Road LONDON SW1V 1RB Tel: The Register of Pension Schemes Information about the Scheme has been lodged with the Register of Pension Schemes, which has been set up to help individuals trace any deferred benefits they may be entitled to from other pension plans. The register is maintained by the office of the Pensions Regulator. The Pensions Regulator can be contacted at: Address: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW Tel No: customersupport@thepensionsregulator.gov.uk Page 25

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