What happens if...
Things change and when they do, the Plan can provide valuable support for you and your family.
Your deferred pension is based on your final pensionable pay at the date you left pensionable service. It is payable from normal retirement age of 65 when, if eligible, you are also entitled to a SAP (special additional pension). As a deferred member, your pension will increase each year between the date you leave and the date you retire in line with the Consumer Prices Index capped at a maximum of 5% for service to 5 April 2009 and at a maximum of 2.5% for service after 6 April 2009.
Your options as a deferred member are:
- Draw your pension - if you are aged 55 or over and have at least five years pensionable service, you may be able to draw your Plan pension. Your pension will be reduced for early payment. However, you will not be able to take your pension early if, after reduction, the pension is less than the Guaranteed Minimum Pension (GMP) at GMP age.
- Transfer out – if you are under age 65, you are entitled to transfer your pension to another registered pension arrangement. Please remember that the Plan pension is a valuable benefit. If you wish to consider transferring your benefits, it would be advisable to seek independent financial advice. If the transfer value is greater than £30,000, it is a requirement to take independent financial advice.
If you are interested in transferring your Fund benefits, you can request a transfer value from the Pension Department. Your transfer value is guaranteed for three months from the date it is calculated. You are entitled to a statement once a year, unless it is required for divorce proceedings.
If you have to stop working for the Company because of serious ill health, you may be able to take your pension, with the approval of the Company and the Trustee.
If you die while you are still contributing to the Plan, the following benefits will be paid to your spouse or civil partner:
- a lump sum of three times your pensionable pay, and
- a pension equal to half the basic pension you would have received if you had stayed in the Plan until age 65.
Your spouse or civil partner is also paid an amount equal to half the SAP you would have received if you had stayed in the Plan until age 65. This is payable from the month that you would have reached age 65.
In addition, your eligible children receive a proportion of the spouse’s pension as follows:
|Number of eligible children||% of spouse’s pension|
|4 or more||100%|
The eligible child’s pension is payable until the child reaches age 16, or until age 23 if the child remains in full-time education.
If no spouse’s or civil partner’s pension is payable, your own contributions to the Plan (including those made via SMART) with interest are also payable as a lump sum.
…with a deferred pension
If you have left the Plan but your deferred pension has not come into payment, a spouse’s or civil partner’s pension in respect of your pre-6 April 1997 pensionable service and Guaranteed Minimum Pension is payable. In respect of your post-5 April 1997 service in contracted-out membership, a pension of broadly equal to half of your revalued pension is payable. In addition, an amount equal to half of the SAP is payable from the month you would have reached age 65.
If no spouse’s or civil partner’s pension is payable, your own contributions to the Plan (including those made via SMART) with interest are payable as a lump sum. The value of your AVC fund (including AVCs made via SMART) is also paid as a lump sum.
If you die and your pension is in payment, your spouse or civil partner will receive:
- half of the pension you were entitled to when you retired (before any exchange of pension for a cash sum or reduction on early retirement)
- half of the increases already awarded to your pension, and
- half of your SAP (starting in the month you would have reached age 65, if you die before then).
If no spouse’s or civil partner’s pension is payable and you die within five years of the date your pension starts, a lump sum is payable equal to your own contributions to the Plan with interest, less the total value of pension instalments already paid to you and any cash sum taken in exchange for pension).