TIME TO CHOOSE Issue 1 August 2017 From the Trustee of the British Steel Pension Scheme BritishSteel_August_Newsletter_A5_CG.indd 1 16/08/2017 14:12
2 Time to choose British Steel Pension Scheme YOUR PENSION SCHEME IS CHANGING From the end of March 2018, the current scheme starts moving into the Pension Protection Fund (PPF). This is a safety net, set up by the government. The PPF can pay benefits to members if the scheme can t afford to. But for some members these will be lower benefits than in the current scheme, and future increases will be lower. We re also setting up a new scheme, which members can switch to if they want to. The new scheme will pay the same benefits as the current one, except that future increases will be lower. The new scheme will need to meet certain conditions, connected with its funding for example, before it can go ahead. We re confident it will meet these conditions. We ve been working with the Pensions Regulator, the Pension Protection Fund and Tata Steel UK to agree how the new scheme would work and how the current scheme will move into the PPF. Now that we ve agreed these details, we can tell you about the new scheme and help you think about your options. We re sorry you ve had to wait to get this information. IT S TIME TO START THINKING ABOUT WHAT S RIGHT FOR YOU Later this year, you ll have a choice about what to do with your pension. There isn t one right choice for everyone. What s right for you will depend on your circumstances. As your Trustee, we ll help you choose by giving you clear information about the new scheme and the PPF. Whichever you choose, you ll still receive a pension. This newsletter outlines your options. By October, we ll send you personal information, to help you make your choice. We ll also tell you about a free and impartial helpline you can call to speak to a pensions expert. You ll then have until December to choose.
Time to choose British Steel Pension Scheme 3 ALL MEMBERS WILL HAVE THESE TWO OPTIONS 1. 2. Move with the current scheme into the Pension Protection Fund and get benefits from that Switch to the New British Steel Pension Scheme and get benefits from that Non-pensioners who are more than a year from normal retirement age (usually 65), could choose instead to transfer out of the current scheme, to a different pension arrangement. PENSIONERS WILL GENERALLY BE BETTER OFF CHOOSING THE NEW SCHEME The new scheme will offer pensioners the same or higher pension increases compared to the PPF, though not as high as the current scheme. The personal information we send to you will help you see how the different increases work. The new scheme might also give pensioners extra one-off benefits in the future. The vast majority of pensioners over their normal retirement age (usually 65), or with a spouse s or ill-health pension, will get the same amount of starting pension that they do now, whichever option they choose. Other pensioners would see their pension reduce if they move into the PPF. Most would get 9 for every 10 they re getting at the moment. The new scheme wouldn t reduce members pensions.
4 Time to choose British Steel Pension Scheme THE CHOICE FOR NON-PENSIONERS WILL DEPEND ON THEIR PERSONAL SITUATION When a member in the PPF retires before their normal retirement age, the PPF reduces the pension that is due to them. Most members get 9 for 10 they would otherwise get. The new scheme doesn t reduce members pensions in this way. The new scheme will also offer the same or higher pension increases compared to the PPF, though not as high as the current scheme. On the other hand, the PPF is currently more generous than the new scheme when it works out early retirement pensions and the lump sum you can take instead of some of your pension income. There are other differences too. These differences mean some non-pensioners will want to choose the PPF, and some the new scheme, depending on their situation and their plans for the future. The personal information we send you will help you think through these differences and choose the option that s right for you.
Time to choose British Steel Pension Scheme 5 THINK CAREFULLY BEFORE YOU TRANSFER OUT OF THE SCHEME Non-pensioners who are a year or more from normal retirement age have the right to transfer out of the current scheme. If you do this, you give up your future pension income for a sum of money that you transfer to a different pension arrangement for example a private pension. This transfer value can seem like a lot. But remember that your pension scheme would pay you an income every year for the rest of your life and to your spouse if you die before they do. If you transfer out, you ll have to make sure your money lasts as long as you need it to. So please be careful before making any decisions about transferring out. If you think transferring might be right for you, please ask us for a quote. You may want to wait until you get your personal information before you decide whether to transfer out. If you switch to the new scheme, you can still transfer out in the future, though it may give you less money than the current scheme would. If you move into the PPF, you won t be able to transfer out in the future.
6 Time to choose British Steel Pension Scheme HOW TO CHOOSE YOUR OPTION Once they get their personal information, it will be clear to most members which option is best for them. Pension Protection Fund New British Steel Pension Scheme Some non-pensioners might choose to transfer out of the current scheme, to a different pension arrangement For some members it won t be clear, so they might need more help to choose. WE LL GUIDE YOU THROUGH YOUR CHOICE In October and November, we re holding meetings around the country, so you can come and find out more, talk to other members and ask us questions face-to-face. We ll tell you more about why this is happening and how the two options work. We ve put answers to questions you might have, on a new part of our website. Visit www.bspensions.com/choose to see them and get all the latest information. We re not allowed to give financial advice, but we re setting up a free and impartial helpline, so members can speak to a pensions expert. If you decide you want to get financial advice, you can find an adviser through www.unbiased.co.uk. Please make sure that they are qualified to help members of a defined benefit pension scheme. You will probably have to pay them for their advice.
Time to choose British Steel Pension Scheme 7 WHAT S HAPPENING NEXT 2017 August September October November December Newsletter, Q&As on website Members get personal information to help them choose Members are invited to come to meetings to find out more and ask questions Helpline becomes available More newsletters and website updates Deadline for choosing 2018 January February March We organise members into the two new options If it meets qualifying conditions, the new scheme begins and the current scheme starts moving into the PPF
HOW TO FIND OUT MORE If you have questions about your options, please visit www.bspensions.com/choose or wait until you receive your personal information. If you have questions about your current pension arrangement, here s how to contact us: If you d like to get these newsletters by email, please email us, including your National Insurance number. If you move home, or you didn t get this newsletter to the correct home address, please tell us straight away. Email pension.enquiries@tatasteel.com Phone 0330 440 0844 Our normal hours are 8.45am to 4.45pm Monday to Friday Writing from the UK (no need for a stamp) British Steel Pension Scheme FREEPOST RLXS-ZXKT-AUER Glasgow G2 7BW Writing from outside the UK British Steel Pension Scheme, 105 Waterloo Street, Glasgow, 2 7BW, United Kingdom