Pensions and Lump Sum benefits

How do you work out my pension?

At retirement, the value of your Investment account is used to provide your benefits.  The value of the account will depend upon how much has been contributed and the investment returns that the contributions have earned.

What choices do I have when I retire?

At retirement you will be able to choose:

  • how much tax-free cash you would like to receive.  You will be able to take up to 25% of your Investment account as a tax-free lump sum.
  • to transfer your Investment account to an external provider and continue to invest it or use it to fund a Flexi-access drawdown arrangement or an Uncrystallised funds pension lump sum.
  • the type of pension you want to receive.
  • how this will increase whilst in payment (for example, you could choose for the pension not to increase once in payment or you could choose for the pension to increase in line with inflation).
  • whether any pension payments will be guaranteed if you die soon after retiring (for example you could choose a pension where the first five years’ payments are guaranteed).
  • the level of Dependants’ pension that would be payable on your death (for example you might wish to provide a spouse’s pension of half or two-thirds of your pension).

If you choose to buy a pension with your Investment account, the amount of the monthly pension will depend on the remaining amount of your account after the lump sum and at the rate at which cash is converted into pension (the Annuity rate).  The actual conversion of the Investment account to a pension will depend on market conditions at the time of retirement. Pension benefits will be secured by the purchase of a pension (known as an annuity) from an insurance company and so the rate cannot be guaranteed in advance.  If you have any questions on these retirement options, please see the "Frequently Asked Questions" for all members for the New Joiners Benefit Structure or contact the DC Plan administrator (tel: 01733 353 414; email:  Full information will be provided to you when you retire to help you understand the options open to you. 

There may be alternative options available to you at retirement. If you are interested in finding out more about these options and whether they are appropriate for you, you should seek independent financial advice.


Jenny is age 65 and has an Investment account of £275,000.

For the purposes of this example, the Annuity rate is 18. This means that £1 p.a. of pension for life will cost £18. (Note that this rate is not guaranteed and the actual rate will depend on the market cost of pensions (also known as annuities) at the point the pension is purchased.) 

This particular Annuity rate will provide a pension for Jenny increasing in line with inflation, and will provide a pension of 50% on her death to her partner.

If Jenny elects to take the maximum lump sum of £68,750 (25% of £275,000), the annual pension will be:

(£275,000 - £68,750) = £11,458 p.a.

If Jenny elects not to take any tax-free cash, the annual pension will be:

£275,000 = £15,278 p.a.

In addition to this pension, benefits will usually be payable from the State.

Can I transfer in benefits from other pension schemes?

The Trustee will not accept transfers of benefits into the Plan from previous pension arrangements.