What options do I have if I leave the Plan?
You will leave the Plan if your employment with your employer ceases, or if you choose to opt-out while remaining in employment with your employer. However you will not be treated as leaving the Plan if you leave employment with one employer that participates in the Plan and immediately become employed by another employer that participates in the Plan. In this case, you will remain entitled to benefits from the Plan on the same basis as previously.
If you have more than two years of Qualifying service then on leaving you will be entitled to a preserved pension and lump sum based on your Pensionable final earnings and Reckonable service completed (see Pension and Lump Sum Benefit). Your preserved pension and lump sum will increase every year in line with RPI (sometimes called revaluation) and then be paid when you reach Pension age.
You may be able to draw your preserved pension and lump sum before Pension age if:
- You have opted out of the Plan and are subsequently retired by your employer on Medical Grounds;
- Your employment with an employer has come to an end but you would have been retired on Medical Grounds had that employment continued; or
- Subject to the Trustee’s consent, you are age 55 or over and you elect to take an actuarially reduced pension and lump sum.
If you have less than two years of Qualifying service you are entitled to a refund of your own contributions less any tax payable and the cost of reinstatement into S2P.
In all circumstances, you have the option of transferring your benefits. If you would like to transfer your benefits from the Plan to an alternative arrangement, the Trustee will ask the Scheme Actuary to calculate your transfer value, which can then be paid into an alternative pension arrangement. You should consider obtaining professional independent financial advice before considering this option. Please note that if you would like to transfer your defined benefit pension to a money purchase benefit, and the value of your defined benefit pension is more than £30,000, you must obtain appropriate independent financial advice.
Be aware of pension scammers: Please be aware your pension can become a target for illegal activities, scams or inappropriate and high risk investments. Before you make any transfer you should read the hints and tips about spotting a scam issued by the Financial Conduct authority and The Pension Regulator. Click here to see their advice.
What happens if I become too ill to work?
If you have more than two years’ Qualifying service and you have to leave your employer before your Pension age, and in the Trustee’s opinion, based on the advice of the Plan’s medical adviser you are entitled to retire on Medical Grounds (and your membership of the Plan is not subject to any medical restrictions), the Plan may pay you your pension and lump sum when you leave. In these circumstances, we will pay your pension without making any reduction because of early payment, based on your Pensionable final earnings and Reckonable service completed (See Pension and Lump Sum Benefit). We may also enhance your Reckonable service when calculating your pension and lump sum benefit, as set out below.
If you have paid extra contributions to qualify early for your ill-health benefits, and have completed less than five years’ Qualifying service, your benefits will be calculated on the basis that you have completed five years’ Reckonable service.
If you are not on a fixed term contract and have between five years and ten years of Qualifying service, your Reckonable service will be enhanced to twice Total Reckonable service less CPS Reckonable service (as long as the enhanced Reckonable service is not more than that which you would have earned if you had worked until age 65).
If you are not on a fixed term contract and have at least 10 years’ Qualifying service, your Reckonable service is increased under the methods below, whichever gives the better result:
- Increasing your Reckonable service so that your Total Reckonable service equals 20 years (or, if lower, the amount you would have built up if you had worked until age 65); or
- Increasing your Reckonable service by 6 2/3 years (or, to the amount you would have built up by age 60 if that is less or by age 65 if your Pension age is 65).
If you are on a fixed term contract, then Reckonable service is increased by the remaining term of your contract or five years if less.
No enhancement to Reckonable service would be paid if you have already left the Plan.
In cases of serious ill-health (medically assessed with a life expectancy of less than 12 months) you may be able to commute your pension for a lump sum equal to five times your annual ill-health pension.
If you have less than two years of Qualifying service you would be entitled to receive a refund of some of your member contributions (not those paid in respect of the cost of providing benefits for your dependants in the event of your death).