More information about your benefits

Transcription

1 More information about your benefits This document summarises key aspects of benefits provided by the Scheme to members in a range of circumstances including if you are about to retire or are considering taking a transfer. It also includes information on Scheme benefits that may be due on death, whether before or after retirement. When you can take your pension benefits Your Normal Pension Date under the Scheme will depend on your date of leaving the Scheme and may also depend on the level of contributions you paid. If you left the Scheme prior to 1 May 2002, your Normal Pension Date will either be the first day of the month immediately after your 60th birthday (if you left before 26 April 1999) or the last day of the month of your 60th birthday (if you left on or after 26 April 1999). If you left the Scheme on or after 1 May 2002 your Normal Pension Date will be the last day of the month of your 65th birthday unless you paid additional contributions to retain a Normal Pension Age of 60. In some circumstances you can take your benefits earlier or later than your Normal Pension Date (up to age 75) but you may need the consent of the Trustee to do this. If you choose to take your pension earlier or later than your Normal Pension Date, the amount payable will normally be adjusted to take account of its early or late commencement. Payment of your retirement benefits Once payable, your pension will be paid monthly direct to your bank account on or around the 10th of each month. Depending on what day of the month your pension becomes payable, your first pension payment may be more or less than the normal monthly amount to take account of back payments or a part month. Calculation of your retirement benefits Your starting pension will be based on your pension on leaving, increased as described below (see Increases before retirement). Once your pension commences it will be reviewed as outlined below.

2 Increases to your pension Under the rules of the Scheme your pension will normally be reviewed annually. Any increases will depend on when you built up the pension and whether or not pension payments have commenced. The following tables provide more information on the level of increases normally payable. If you were an active member of the Scheme before 6 April 1997, part of your benefits are likely to be subject to a minimum level known as the Guaranteed Minimum Pension (GMP). Special increase rates apply to GMPs and further information on these are given in the GMP Appendix below. If you want further information about this, please let us know. Increases before retirement Your pension on leaving service will normally be increased as set out below: The pension you have built up: Will normally be increased: for service before 6 April 1997 for service between 6 April 1997 and 5 April 2009 for service from 6 April 2009 Bridging Pension For any benefit in excess of the GMP referred to above, broadly by the change (if any) in prices over the period from leaving service, but the total increase is capped at 5% for each year over the period. (See also GMP Appendix.) Broadly by the change (if any) in prices over the period from leaving service, but the total increase is capped at 5% for each year over the period. Broadly by the change (if any) in prices over the period from leaving service, but the total increase is capped at 2.5% for each year over the period. Broadly by the change (if any) in prices over the period from leaving service. Note: Any illustrations of possible increases between your date of leaving pensionable service and the date your pension becomes payable cannot be taken as guaranteed. These will be dependent on the overall increase in prices over the whole period, taking into account periods of both positive and negative inflation.

3 Increases after retirement After your pension has commenced the increases set out in the following table will normally apply with effect from each 1 June: The pension you have built up: Will normally be increased: for service before 6 April 1997 for service between 6 April 1997 and 31 May 2005 for service from 1 June 2005 Bridging Pension For any benefit in excess of the GMP referred to above, by 3% each year if the rise in the level of prices over the 12 months (or 24 months if no increase was applied in the previous year) to the previous February is greater or equal to 5%. (See also GMP Appendix.) Broadly in line with the increase (if any) in the level of prices to a maximum of 5% each year. Broadly in line with the increase (if any) in the level of prices up to a maximum of 2.5% each year. Broadly in line with the increase (if any) in the level of prices. Transfer option Before you start drawing your retirement benefits, you have the option of transferring the value of your Scheme benefits to another pension scheme perhaps to a new employer s scheme, or a personal pension scheme or a suitable insurance policy. If you have Defined Contribution benefits you can choose to transfer these in isolation, or likewise transfer only the value of your main scheme final salary benefits. In doing so a payment would be made to the receiving arrangement of your choice after which the Trustee would no longer be responsible for providing any benefits in respect of the transfer to you or your dependants under this Scheme. Benefits in the receiving arrangement are unlikely to take the same form as those under this Scheme. If you are considering a transfer option, you will normally be required to seek appropriate independent advice from an adviser who is authorised by the Financial Conduct Authority before the Trustee can make a transfer payment on your behalf and we will need to verify this. Neither the Trustee nor Lane Clark & Peacock LLP are authorised to give you advice. Note: Once you have started drawing your retirement benefits from the Scheme you will no longer have the option to transfer.

4 Death benefits The benefits payable after your death depend on whether you die before or after you start drawing retirement benefits from the Scheme. The following tables and notes indicate which benefits would be payable and provides further information about the nature of these. Death before retirement after leaving pensionable service Spouse or civil partner s pension Children s pensions Lump sum Benefit payable? Yes see below for further details. In certain circumstances see below for further details. Yes see below for further details. Death after retirement Benefit payable? Spouse or civil partner s pension Children s pensions Lump sum Yes see below for further details. In certain circumstances see below for further details. Yes if you were to die within the first five years of taking your retirement benefits from the Scheme.

5 Spouse s and civil partner s pensions Where indicated above a spouse s or civil partner s pension may be payable if you are married or have a civil partner at the date of your death. If you are not married (or in a civil partnership) when you die a pension may be paid to someone who is financially dependent on or interdependent with you, although this would be at the discretion of the Trustee. If you were to die after leaving pensionable service but before retirement the starting pension payable to your spouse would broadly be based on one half of your pension at date of death increased as described above see Increases before retirement. If you were to die after your pension has commenced, the starting pension payable to your spouse would broadly be based on one half of the pension you were receiving just before your death, adjusted to allow for any elections you made on retirement such as scheme pension you may have exchanged for a tax-free lump sum. These pensions would be reviewed each year (in the same way as yours) and are payable for life. Children s pensions In some circumstances children s pensions may also be payable after you die. If payable, these will be reviewed in the same way as your pension. They are not payable for life - to qualify the child must normally be under age 22 and in full-time education or vocational training. Further restrictions may also apply. If you would like further information about this please let us know. Lump sum benefit If a lump sum is payable after your death, the Trustee will decide who will receive it. If you have completed an Expression of Wish form they will take your wishes into account, although ultimately they will decide who the beneficiaries will be. If you die after leaving pensionable service but before your pension starts and before your Normal Pension Date, the lump sum payable would be equal to the value of your own contributions. If you were to die after your pension starts but within the first five years of taking your retirement benefits, the lump sum would broadly amount to the value of the remainder of the first five years of pension instalments. In the case of death after your Normal Pension Date but before your pension commences, your lump sum would be equal to five years worth of pension payments assuming you had retired on the day immediately before your date of death.

6 GMP Appendix Guaranteed Minimum Pensions Although a new State Pension was introduced from 6 April 2016, some of the old rules still apply, in particular for Guaranteed Minimum Pensions. If you were in pensionable service in the Scheme at any time between 6 June 1988 and 5 April 1997 you will have been what is known as contracted out of part of the State Pension arrangements and you will have built up a Guaranteed Minimum Pension (GMP) under the Scheme This means that during that time you will have paid a lower rate of National Insurance Contributions and your entitlement to part of the State Pension may well be reduced to take account of this, but following the most recent changes in the State Pension you should check your position with How this affects you may depend on your age. Nevertheless a GMP is payable to you and, as the name suggests, it is a minimum level of pension for that period of service that the Scheme must provide for you from GMP Age (age 60 for women and 65 for men). GMPs built up during this period may be increased before and after GMP Age on a different basis to the rest of your Scheme pension, but a test is made at GMP Age to ensure your pension for service before 6 April 1997 is at least equal to your GMP increased as described below. GMP increases before GMP Age For each complete tax year for the period from your date of leaving pensionable service up to GMP Age, the GMP part of your Scheme pension increases at the rate given in the table below. This system of increases is often known as revaluation.

7 The rate of fixed rate revaluation depends on when you left pensionable service Revaluation rate Between 6 April 1978 and 5 April % Between 6 April 1988 and 5 April % Between 6 April 1993 and 5 April % Between 6 April 1997 and 5 April % Between 6 April 2002 and 5 April % Between 6 April 2007 and 5 April % Between 6 April 2012 and 5 April % GMP increases from GMP Age The way that your GMP increases once it is in payment is also subject to a minimum, set out in law. The Scheme increases reflect this as follows: Increases from GMP age GMP for any service before 6 April 1988 GMP for any service between 6 April 1988 and 5 April 1997 None Broadly in line with the increase (if any) in prices up to a maximum of 3% a year