The exact contribution the company makes depends on your age and how much you have decided to pay. Contributions are based on pensionable earnings.
If you choose to pay at the standard rate of 5%, the company pays:
| Your age | Standard rate Company Contributions |
|---|---|
| Under 45 | 8% |
| 45 - 49 | 9% |
| 50 - 54 | 10% |
| 55 - 59 | 11% |
| 60 + | 12% |
If you choose to pay at half rate, the company will also pay at half rate. If you choose not to contribute, the company will pay a flat rate contribution of 2.5%, irrespective of your age.
The company will also add 50% to any AVCs you choose to make. (Maximum AVCs are 10% of pensionable earnings plus 15% of non pensionable earnings each month).
On top of this, the company pays extra to meet the general administration costs of running the Plan and to pay for your Life Assurance.
Use the Contributions Calculator for more information.
If you want to save for your future, then paying contributions into the Lifestyle Plan has two major advantages over other savings arrangements. Firstly you get tax relief on all contributions you make and secondly the company will also pay significant contributions into your Lifestyle account. The more contributions you pay, the less tax you pay and the more contributions the company pays on your behalf.
If you participate in PaySmart, you can increase your monthly contributions at any time. However, you can only reduce your contributions annually, each 1st April, unless there is a fundamental change in your personal circumstances. If you do not participate in PaySmart, you can increase or reduce your monthly contributions at any time. Contribution forms received by the Pensions Department or your Payroll Department will become effective from the next available monthly payroll date.
Your money is held in a fund that the Company cannot touch. The value of your own pension account may go up or down depending on what happens to investment markets. While there are no guarantees about how much your pension will be when you retire, the Company cannot touch your money once it is in your personal account.
The Trustees have appointed Legal & General Investment Management Ltd to manage the day to day investments using pooled ‘index tracking‘ funds.
Whenever your personal circumstances change, it is likely that you will want to change the details of how you would like any lump sum death benefit to be paid.
Each time your circumstances change, you may need to complete a new form to inform the Trustee of your new wishes. If you would like a nomination form and envelope please contact the Pensions Department.
If you are entering into divorce proceedings, you may need to provide details of your pension benefits. Contact the Pensions Department for the value of your pension account under the Lifestyle Plan. The Court could decide to "split" your pension benefits, which could involve part of your pension account being allocated to your ex-spouse.
Any lump sums due will be paid under discretionary trust (with the exception of any benefits arising from any contracted-out part of your account). This means that the Trustees of the Lifestyle Plan have to decide who is to receive the benefit. The purpose of this arrangement is to ensure that the payment is free from inheritance tax under current legislation and that it can also be paid quickly without needing to wait for Probate etc.
Although the Trustees have the final decision as to who receives any death benefit, a form is provided so that you can indicate the person or persons whom you would wish the Trustees to consider.
If you later wish to alter any details you should complete a new form. If you would like a nomination form and envelope please contact the Pensions Department.
Death in service benefit is dependent upon whether you pay contributions. Please click here for further information.
Income Protection Insurance is fully explained in the relevant booklet. Please click here to view the booklet.
Are any charges being applied by your previous scheme or policy for transferring?
Do you want all your investment eggs in one basket? i.e. You may prefer not to transfer thus giving you a greater spread of investments by having your Lifestyle fund and your previous benefits invested separately, perhaps in much different investment assets.
Alternatively, particularly if your pensions benefit is relatively small, you may decide to transfer into the Lifestyle Plan because it will be easier to keep track of your pension in one place.
Before deciding to transfer you need to compare the benefits expected from the arrangement from which you are planning to take the transfer value, with your expected entitlement in the Lifestyle Plan. Because the Lifestyle Plan is a money-purchase scheme (that is, the ultimate benefit depends on investment returns on the underlying funds and the cost of buying benefits when you take your pension) the comparison will be difficult, since the benefits payable cannot be predicted with certainty. If your other arrangement is also a money purchase scheme, it would certainly be wise to compare charges (including whether you would suffer a penalty by transferring) and investment choice.
Often it will be impossible to say whether leaving benefits where they are or transferring them into the Lifestyle Plan will be the best approach.
You may wish to consider taking independent financial advice before deciding whether to transfer or not, particularly if any of your previous benefits are in a final salary pension scheme.
The trustees of the Plan are responsible for investment strategy and providing an appropriate range of funds for members. Their strategy, including the reasons for investing passively, is set out in the Statement of Investment Principles (S.I.P.), which is regularly reviewed.