The Plumbing & Mechanical Services (UK) Industry Pension Scheme is a career average scheme which provides benefits on retirement and also on death. You built up benefits based on your salary for each year you were a contributing member, and each year your benefits receive bonuses until you retire. The Scheme aims to increase pensions in payment each year in line with price inflation when there are sufficient funds to do so. Protection is also given to those who leave contributory membership, with their benefits being treated no less favourably than those who continued contributing.
Benefits start to accrue from the date of joining the pension scheme, there is no waiting period.
At the end of each year that you were a contributing member, you will have been granted pension credits equal to a certain percentage of your earnings, in most cases 1.25% equating to 1/80th salary for each year of service. These credits have bonus additions added annually which effectively “inflation proof” their value. On retirement a pension equal to the total value of credits + bonuses accrued throughout service is payable. If you have 40 years service this will give an annual pension of approximately half (i.e. 40/80ths) of your salary during your career.
The Benefits Department will contact you shortly before your Normal Retirement Date to explain your retirement options.
Lump Sum Retirement Benefits
On retirement you have the option to “give up” some of your pension in return for a lump sum cash benefit. Depending on the value of potential benefits held elsewhere, all or part of this lump sum would be tax-free. If you have a small pension, you may be able to exchange all of your pension credits for a single cash lump sum.
If you die before your pension starts, there will be a lump sum payment based on your contributions to the Scheme with interest. The lump sum will be paid at Trustee discretion to an entitled beneficiary or beneficiaries. The lump sum will be paid at Trustee discretion to an entitled beneficiary or beneficiaries. You are asked to complete an Expression of Wish Form and keep it up to date, to help the Trustee understand who you would like to receive any lump sum benefit due after your death. Although not binding, the Trustee will take this into account when deciding who will receive the death benefits and will make every effort to meet your wishes where possible.
Spouse’s, Civil Partner’s, Dependants’ and Children’s Benefits
If your spouse or civil partner who is receiving a pension under the Scheme dies leaving one or more children under 18 years of age, a children’s pension will be payable up to the amount of the spouse’s pension at date of death. If your spouse or civil partner is more than 10 years younger than you, the pension will be reduced. For any period where members built up benefits on the Basic and Higher Benefit Scales, if you do not leave a spouse or civil partner on your death or if you are unmarried at date of death a pension equal to the amount which would have been payable to a spouse or civil partner may be paid to any person who was financially dependent on you.
Full details of all Member Benefits can be found in our online Scheme Guide
Certificate of Pension Credits
Each year before retirement you will receive a Certificate of Pension Credits. This shows the amount of your annual pension, including bonuses, as at 5th April in that year. An example certificate is available to view here.
You may be able to transfer the pension credits you built up in the Scheme to another pensions arrangement, for example, into a new employer’s pension plan or personal pension. If you wish to transfer out of the Scheme, this must be completed before your 66th birthday.
In line with guidance issued by The Pensions Regulator (TPR), the Scheme has a policy of contacting members living overseas in receipt of a pension on a regular basis to check that the personal details we hold for them are correct. This policy is intended to help prevent fraud, and to ensure that pension payments continue to be made only to those individuals who are entitled to them under the Scheme Rules. This process will take place bi-annually.
If you have received a form from us to complete, to ensure we hold the correct details for you, please complete this form.