When You Retire
Normal Retirement Date
Your Normal Retirement Date is your 65th birthday. However, you could retire before or after this age. We will contact you shortly before your Normal Retirement Date to explain your retirement options.
Pension at Normal Retirement Date
The annual amount of your pension at Normal Retirement Date is the total of the Pensions Credits which you have built up over the years you contributed to the Scheme plus any bonuses awarded, less the amount of any Pension Credits used to provide you with a cash sum on retirement. Statements to provide an illustration of the pension you might receive are issued annually.
Cash Lump Sum on Retirement
When you retire you can choose to convert part of your pension to a retirement lump sum. You may be able to take up to 25% of the value of your pension benefits in the Scheme as a tax-free retirement lump sum. Members with small pensions may be able to convert all of their Pension Credits into a single lump sum. The administration team will set out your options in your retirement illustration.
Payment of Pension
Your pension will be paid monthly directly to a bank or building society account of your choice on the first of the month. If the first is a weekend or bank holiday, your pension will be paid on the latest working day before the first.
We will send you a payslip in May each year. You will only receive a payslip in other months if your monthly pension amount changes by more than £10, for example if your tax code changes.
Once in payment your pension will increase as follows:
- Your pension credits in respect of service before 6th April 1997 other than your GMP (see below) receive no guaranteed increases.
- Your pension credits in respect of service between 6th April 1997 and 5th April 2005 receive increases in line with the lesser of price inflation and 5% per annum.
- Your pension credits in respect of service after 5th April 2005 receive increases in line with the lesser of price inflation and 2.5%.
- If you were a member prior to 6th April 1997 you may have a Guaranteed Minimum Pension (GMP). GMP built up before 6th April 1988 is not increased by the Scheme. GMP built up after that date increases in line with price inflation subject to a limit of 3% a year.
The Trustee has the discretionary power to grant additional increases in respect of pensions not yet in payment and in respect of pensions in payment.
Increases to any pensions derived from additional voluntary contributions or special contributions paid by an employer or member will be in accordance with the terms on which they are granted.
You may choose to retire early or have to retire because of ill health. If you retire early, your benefits may be reduced.
Voluntary Early Retirement
You may choose to retire any time after the Normal Minimum Pension Age (currently age 55 but increasing to age 57 from April 2028). If you retire early, your benefits will be calculated as if you were retiring on your Normal Retirement Date but will be reduced to reflect the early payment.
The Scheme Rules require that the part of your pension equal to your GMP will be payable from your GMP age (age 65 for men and age 60 for women). If you retire earlier than your GMP age, a reduced pension reflecting the balance of your non-GMP pension will be payable from the date of your early retirement. The early reduction factor is calculated by the Scheme Actuary and allows for early payment and the likelihood that your pension will be payable over a longer period than might otherwise have been expected.
If you are forced to retire before Normal Retirement Date due to Incapacity, then an immediate pension may be payable at the discretion of the Trustee. This pension will be calculated as described above under Pension at Normal Retirement Date, although if you left Pensionable Service before the Closure Date, it may be reduced because it is being paid early. The calculation of the amount of cash lump sum on ill-health retirement is the same as above for normal retirement.
The Trustee will obtain evidence of continued Incapacity at intervals of not more than three years until you reach Normal Retirement Date. If you retire with an Incapacity pension and your health improves, your pension may be reduced or suspended.
If you choose to retire after your Normal Retirement Date, your Pension Credits earned up to Normal Retirement Date will be actuarially increased from Normal Retirement Date to your actual retirement date. Any Pension Credits earned after Normal Retirement Date will not be increased for late payment. The calculation of your cash lump sum on late retirement is as described under normal retirement.