These pages describe the benefits for employees who joined the Contributory section of the Guinness Ireland Group Pension Scheme on or after 1 January 1987.
Please note that the following pages only describe the benefits under the Contributory section of the Scheme. If you were a member of the Scheme prior to 1 January 1987, you will need to refer to the Pre 1987 section on this site for details of the benefits payable in respect of that period of membership.
The Scheme is designed to provide the following benefits:
A pension on retirement
The option to exchange part of that pension for a cash lump sum
Spouse’s pensions and children’s pensions on death in service and death after retirement
Cash lump sum on death in service and on death within 5 years of retirement
Deferred pension rights on leaving the Company before the Retiring Age with more than 2 years of membership of the Scheme
An opportunity to provide additional pension benefits by making Additional Voluntary Contributions
This Scheme is an integrated scheme, which means it looks at benefits payable under the Social Welfare system as part of the total pension package. In this case, the Scheme takes account of the State Pension (Contributory)* or Invalidity Pension/Benefit (in case of early retirement on ill-health grounds) in designing the overall pension package for service up to and including 30 June 2000. Both employers and employees make Pay-Related Social Insurance (PRSI) contributions and these, in turn, entitle Scheme members to Social Welfare benefits.
The Scheme takes into account Social Welfare benefits to calculate:
The amount of occupational pension required so that the combined pension from both sources is at the level being aimed for in designing the scheme
The level of contributions payable by the employee towards the cost of his or her occupational pension
Benefits payable by the State (e.g. State Pension (Transition)*, and State Pension (Contributory)*, Widow’s/Widower’s Pensions, Child Allowances etc) are additional to the Scheme pension and other benefits described in this site.
*Formerly known as Retirement and Old Age (Contributory) Pension
The Scheme closed to new entrants from 10 May 2013.
No pension or death benefit will be paid until satisfactory evidence of age and marital status has been produced. In addition it will be necessary to advise the Company if a change occurs in your marital status.
In most circumstances evidence of health is not required. In the case of early retirement on ill-health grounds, you may be asked to undergo a medical examination. You will be notified of any such requirements.
You contribute 5% of your Pensionable Emoluments to the Scheme. The Company meets the balance of the cost of providing the Scheme benefits, based on the recommendation of the actuary. You may secure additional benefits by making Additional Voluntary Contributions (see AVC section).
The Company’s and your contributions are invested to build up a fund of money sufficient to pay pensions and other benefits from the Scheme. To ensure that the amount of money going into the Scheme is at the level necessary to meet its future needs, the actuary carries out a valuation every three years and advises on the Scheme’s financial health. Following an actuarial valuation it might be necessary to adjust the contributions payable by the Company and/or the members.
Your Scheme pension is calculated using the following formula:
1/60th x Pensionable Emoluments x Reckonable Service
(see example below).
Benefits purchased by any Additional Voluntary Contributions (AVCs) you may have made will be payable in addition to these benefits. Click this link for further information on AVCs.
Your pension is subject to the Government's Standard Fund Threshold (SFT) currently €2 million (from 1 January 2014), which is the total amount of tax efficient savings that you can make. Under current legislation, the value of any pension benefits on retirement in excess of the SFT would be subject to a one off tax payment at the rate of 41%.
Click here for further information on the SFT.
Scheme pension and any additional pension purchased by your Additional Voluntary Contributions cannot exceed Revenue Commissioners’ limits, which will be advised on request.
Example:
Emoluments at the
Retiring Age (age 65) €45,000 pa
State Pension at single rate
at date of retirement €11,611.60 pa
Pensionable Emoluments for
service from 1 July 2000 €45,000 pa
Pensionable Emoluments for
service prior to 1 July 2000 €45,000 – (€11,611.60 x 1½)
= €27,582.60 pa
Reckonable Service 10 years prior to 1 July 2000
30 years from 1 July 2000
Pension calculation 10/60ths x €27,582.60
+ 30/60ths x €45,000
Giving a Scheme pension of €27,097.10 pa
In addition to the Scheme pension, you may be entitled to a benefit from the State.
If you are unable to continue in employment because of serious ill health or injury and if the Company’s Medical Officer so recommends, you may retire early and receive an immediate pension.
In these circumstances your pension will be calculated based on completed Reckonable Service plus the service you could have completed up to the Retiring Age.
Your pension will be calculated as follows:
1/60th x Pensionable Emoluments x Reckonable Service (actual service plus years you could have completed to the Retiring Age).
Benefits purchased by any Additional Voluntary Contributions (AVCs) you may have made will be payable in addition to these benefits. Click this link for further information on AVCs.
Example:
Age 45
Actual service at date of
early retirement due to illness 20 years of which 10 were prior to
1 July 2000
Reckonable Service 40 years (20 actual + 20 credit years)
Emoluments at date of retirement €45,000 pa
State Disability Benefit at
date of retirement €10,285.60 pa
Pensionable Emoluments for
service from 1 July 2000 €45,000 pa
Pensionable Emoluments for
service prior to 1 July 2000 €45,000 – (€10,285.60 x 1½)
= €29,571.60 pa
Pension calculation 10/60ths x €29,571.60
+ 30/60ths x €45,000
Giving a Scheme pension of €27,428.60 pa
In addition to the Scheme pension, you may be entitled to a benefit from the State.
At the request of the Company, you may remain in service after your Retiring Age.
The pension due at the Retiring Age is calculated and payment may commence immediately. Alternatively, payment may be deferred to the date when you actually retire. In this case the amount calculated at the Retiring Age is increased as advised by the actuary to take into account the later commencement date.
At retirement you have the option to exchange part of your Scheme pension for a cash lump sum. Lump sums up to €200,000 are currently paid tax-free. For larger lump sums, the excess over €200,000 will be subject to tax at the standard rate, but any amount over €500,000 will be taxed at the higher rate.
The cash lump sum is calculated as follows:
3/80ths x Emoluments x Reckonable Service
If you do not have benefits under any other pension arrangement and you have 20 years’ Company service the maximum cash lump sum is 1½ times your final remuneration. For shorter periods of Company service or on early retirement, the maximum cash lump sum is appropriately reduced. Where retirement is due to extreme incapacity, the exercise of this option will be deemed to take place at the Retiring Age.
Example:
Emoluments at date of retirement €45,000 pa
Reckonable Service 40 years
Maximum cash lump sum benefit €45,000 x 40 x 3/80ths = €67,500
If you take a cash lump sum from the Scheme, your pension will be reduced accordingly. The amount of your reduced pension will be advised at your date of retirement.
Note:
Any pension payable to your dependants on your death is unaffected and will be calculated as if no cash lump sum had been taken. The cash lump sum as outlined above, which is approved by the Revenue Commissioners, is inclusive of any cash lump sum taken in respect of Additional Voluntary Contributions.
On leaving the Company before the Retiring Age you will be entitled to a deferred pension calculated in the same way as the pension at the Retiring Age, but based on Reckonable Service and Pensionable Emoluments at date of leaving. This pension will be payable from the Retiring Age.
If you have less than the statutory qualifying service (currently two years) you may instead opt for a refund of your own contributions less tax (current tax rate is 20%).
If you die in service before the Retiring Age, a cash lump sum of four times your Emoluments at the date of death is payable together with a refund of your contributions to the Scheme.
The Trustee has the discretion to decide to whom this death benefit should be paid. Your wishes as to whom you would like to receive this benefit will be taken into consideration by the Trustee but are not binding.
It is important to complete a new expression of wish form if there is any change in your personal circumstances.
Your spouse will also be paid a pension for life equal to 50% of your expected Scheme pension at date of death, assuming you had remained in service until the Retiring Age with no change in Pensionable Emoluments.
The Trustee has, in certain circumstances, discretion in determining to whom, if anyone, the spouse’s pension is payable. If there are any special circumstances applying in your case, which you would wish the Trustee to take into account, please notify the Trustee in writing using an expression of wish form.
If there are dependent children (i.e. unmarried children aged under 18 or under 22 if undergoing full-time education) a pension will be paid equal to 25% of the spouse’s pension to each child, up to a maximum of four dependent children.
A member dies in service and is survived by a spouse and two dependent children. Had the member lived to the Retiring Age, Reckonable Service would have been 40 years, of which 10 were completed prior to 1 July 2000.
Emoluments at date of death €45,000 pa
State Pension at single rate
at date of death €11,611.60 pa
Pensionable Emoluments for
service from 1 July 2000 €45,000 – (€11,611.60 x 1½)
= €27,582.60 pa
Potential Scheme pension 10/60ths x €27,582.60
at the Retiring Age + 30/60ths x €45,000
= €27,097.10 pa
Spouse’s pension from Scheme 50% of €27,097.10 pa = €13,548.55 pa
Children’s pension from Scheme 50% of €13,548.55 pa = €6,774.28 pa
Cash lump sum benefit
from Scheme €180,000 (4 years’ Emoluments)
In addition to the benefits payable from the Scheme, a State Pension and Child Allowances may be payable.
Your spouse will receive a pension equal to 50% of the Scheme pension being paid to you at the date of death, ignoring any reduction if you had exchanged part of your pension for a cash lump sum when you retired.
If you die within five years of starting to receive your pension, a cash lump sum will be payable. This is calculated as the pension payable at date of death multiplied by the unexpired portion of the five-year period.
A children’s pension, if applicable, is payable on the same basis as for death in service. As in the case of death in service, the Trustee has discretion to decide to whom any cash lump sum is payable and has, in certain circumstances, discretion in determining to whom, if anyone, the spouse’s pension is payable. You should notify the ;Trustee in writing of any special circumstances applying in your case using an expression of wish form.
Scheme pension at date of death €28,000 pa
Member exchanged part of Scheme
pension for a cash lump sum at time
of retirement and, ignoring this,
pension would have been €32,000 pa
Spouse’s pension from Scheme 50% of €32,000 pa = €16,000 pa
In addition to the benefits payable from the Scheme, a State Widow’s/Widower’s Pension may also be payable.
If the member died after two years of retirement a cash lump sum of €84,000 (3 years x €28,000) would be payable in addition to the spouse’s pension of €16,000 pa.
If you are survived by a spouse, they would be entitled to a pension of 50% of your deferred pension at date of death. A children’s pension, if applicable, will be payable on the same basis as for death in service in respect of children born before you left the Company’s service.
The Trustee has discretion in determining to whom, if anyone, a spouse’s pension is payable. You should notify the Trustee in writing of any special circumstances applying in your case using an expression of wish form.
If not survived by a spouse (and the Trustee does not exercise the discretion referred to in the previous paragraph) the value of your deferred pension rights would be calculated as at the date of death and then paid as a cash lump sum to your estate.
The Scheme is a defined benefit scheme for the purposes of the Pension Act 1990, established under irrevocable trust and is approved as an Exempt Approved Scheme under Chapter 30, Part I of the Taxes Consolidation Act 1997. Benefits paid under the Scheme must be within the limits specified by the Revenue Commissioners from time to time. The Scheme has been registered with the Pensions Board (PB No. 1684).
Funds to meet the cost of the Scheme benefits are accumulated under the control of the Trustee and are invested on the advice of specialist advisers.
The Trust Deed provides that, with the approval of Diageo plc, the Trustee may amend the Scheme terms and conditions but not so as to prejudice substantially the rights of existing members or pensioners.
The Scheme Rules allow the Company to discontinue its contributions to the Scheme. Such action by the Company would be taken only in exceptional circumstances and, subject to the funding position of the Scheme, your rights to benefits secured by contributions already made would not be affected.
Pensions are normally paid monthly by credit transfer to your Bank or Building Society account.
Pensions, including spouse’s pensions and children’s pensions, are liable to tax under the PAYE system. Tax payable on State pension or benefit will also be deducted from your Scheme pension, since the tax authorities take your income from the State into account when calculating tax-free allowances.
Cash lump sums paid on death are not liable to Income Tax but may be liable to Capital Acquisition Tax. As mentioned earlier, a cash lump sum arising on commutation of pension is currently tax-free up to €200,000 with higher amounts being subject to tax.
The benefits provided under the Scheme are strictly personal to you and your dependants and may not be used as security for borrowings or assigned in any other way.
In the event of judicial separation or divorce, a Court Application may be made for a Pension Adjustment Order relating to retirement or contingent benefits in respect of a married member. Further information about the operation and impact of Pension Adjustment Orders may be obtained from the Pensions Board.
If you have a complaint or dispute relating to your Scheme membership, you should first contact the Pensions Administration Manager in Edinburgh. If the Pensions Administration Manager is unable to resolve the issue to your satisfaction, you may then use the Scheme’s Internal Dispute Resolution (IDR) procedure, details of which may be obtained from the Diageo Pensions Team in Edinburgh.
You will be required to provide information relating to your complaint or dispute. The determination under the IDR procedure will be made within three months of the date of receipt of your application (or, if later, the date of receipt of any additional information requested from you).
The determination will be issued to you in writing. If you are unhappy with the outcome of the Scheme’s IDR procedure, you may then wish to refer the matter to the Pensions Ombudsman who may be contacted at 36 Upper Mount Street, Dublin 2.