Silver

These pages describe the benefits for employees who joined the Silver level of the Diageo Pension Scheme on or after 1 April 1999.

Please note that the following pages only describe the benefits under the Silver section of the Scheme. If you have been a member of any other section of the Scheme you will need to refer to the appropriate pages on this site for details of the benefits payable in respect of that period of membership.

At normal retirement date

Your normal retirement date is the last day of the month in which your 65th birthday falls The pension you receive at retirement is paid monthly in advance for the rest of your life and will be increased each year. The amount of pension will be based on your pensionable service and pay near retirement.

If you retire at your normal retirement date, your Silver level pension will be calculated as:

1.6% x pensionable service x final pensionable pay

This will be added to any pension you may have earned at the higher Gold level.

Benefits payable from any Additional Voluntary Contributions you may have made are in addition to those described above. Please see section on Additional Voluntary Contributions for more information.

If you have paid sufficient National Insurance contributions throughout your working life you will also receive the State basic pension from State Pension Age.

On early retirement

However, not everyone waits until their normal retirement date before claiming their pension. The Scheme offers early retirement terms, which allow you to retire at any time after your 50th birthday.

If you retire before your Normal Retirement Date, your pension will be reduced to reflect that it is being paid early. The reduction will depend on your age when you retire. As an active member, if you retire between age 58 and 65, your pension will not be reduced for early payment.

Incapacity retirement

If you become seriously ill, you can apply to the Trustees for an incapacity pension. The amount of pension you would receive depends on the extent of your illness or disability. Incapacity pensions are not reduced for early payment.

  • A total incapacity pension is equal to the pension you would have received at age 65 based on prospective pensionable service as a Silver level member to that date but your pay at your date of leaving.  However if the pension is less than one half of your Pensionable Pay at the date of leaving Service a temporary pension equal to the difference will be paid until age 65, subject to Scheme limits.

    Note: If you changed levels of membership less than 12 months before leaving Service, the period of Pensionable Service between your date of leaving and Normal Retirement Date will be deemed to be partly Gold level and partly Silver level in the same proportions as the member was a Gold level Member and a Silver level Member over the twelve month period immediately before leaving Service.

  • A partial incapacity pension is calculated in the same way as described in the section called “At normal retirement date “ but based on your pensionable service and pay at your date of leaving.

    Until your Normal Retirement Date, the Trustee may from time to time require a medical review of your continued Total or Partial Incapacity. Following the review the Trustee may increase, reduce, suspend or withdraw the pension and adjust any benefits payable on your death as it considers appropriate.

Options on retirement

When you retire, you will usually be able to give up part of your pension for a cash sum known as a pension commencement lump sum. Under current legislation this is paid tax free. If you do decide to take a lump sum, any pensions payable on your death will not be affected.

You will normally be able to take a pension commencement lump sum in the region of:

25% of the value of your pension benefits

The amount of pension you give up depends on the amount of lump sum you wish to take and your age at retirement.

Pension increases

Your pension increases at different rates depending on when the pension was earned, whether you are over or under GMP* age and how much is in respect of GMP*.

Click here for further details on how pensions in payment are increased.

* GMP is Guaranteed Minimum Pension. GMP Age is 60 for females and 65 for males.

The Scheme provides you with an excellent package of benefits. As a member of the Silver section, you contribute 6% of your Pensionable Pay. The Company will pay whatever is required to meet the balance of the cost of the benefits provided under the Scheme.

How do I pay my pension contributions?

Pension contributions not deducted through the Salary Exchange for Pensions arrangement are automatically deducted from your Pensionable Pay before tax is deducted. This means you will get tax relief on your contributions at the highest rate appropriate to your pay.

What is Salary Exchange?

Salary Exchange gives you and Diageo an opportunity to save money by the way your pension contributions are paid to the Scheme. Whilst contributions deducted from your Pensionable Pay attract income tax relief you will stay pay National Insurance (NI) on this part of your pay. Under Salary Exchange, the Company pays your pension contributions to the Scheme by reducing your salary by the amount of your pension contributions. This means that you pay reduced tax and both you and Diageo pay lower NI contributions.

Maternity Leave

Will pension contributions still be deducted during my period of maternity leave?

Yes, assuming you’ll receive maternity pay from the Company, you’ll continue paying contributions on your pensionable pay at the rate currently applicable to your level of membership.

However, when your pay reduces below your normal level of pensionable pay, you’ll only be required to pay contributions on your reduced pay. If your pay stops altogether, or if you’re not entitled to maternity pay, you won’t be required to pay any contributions during this part of your maternity leave. What’s more, you’ll continue to gain pensionable service as if you had continued paying contributions.

Will my pensionable service build up during maternity leave?

Assuming you return to work, you’ll be credited with pensionable service for your entire period of maternity leave (subject to a maximum period of 52 weeks).

What happens if I don’t return to work?

Your pensionable service will stop at the end of the month when your contract of employment ends.

Where can I get further information?

For more general information about maternity leave, you should read a copy of the Company’s maternity policy available from your Human Resources contact.

Temporary Absence

If you are away from work you will normally be treated as having left service if you stop receiving contractual pay. The Company and the Trustee may however, agree to treat you as still in service for so long as they see fit and the Inland Revenue allows if you are away from work or on secondment.

The Scheme is registered with HMRC under Section 153 of the Finance Act 2004. Under current legislation, this gives members and the Company certain important tax exemptions and ensures that investment income is largely tax-free. As a member of the Scheme and any other pension schemes, you are responsible for the tax consequences of your membership.You should therefore note the following:

  • Since 6 April 2006, only certain benefits are “authorised” by the Finance Act 2004.If unauthorised benefits are paid by a pension scheme, both the scheme and the recipient will be liable for additional tax.It is generally expected that the benefits payable by the Scheme will be authorised, but in rare cases some benefits may be classed as unauthorised.In such cases, the Trustee is not required to pay the benefit. There may be adverse tax consequences if you invest (or it could be construed that you had invested) part or your entire tax-free cash sum from a pension scheme, into another pension scheme.This is often called ‘recycling’ tax-free cash sums. If you are concerned about this issue you should seek professional independent financial advice.

  • If you have obtained one of the forms of pension protection from HMRC (Enhanced, Primary, Fixed 2012, 2014 or 2016, Individual 2014 or 2016), you should bring this to the attention of the Pensions Team in Edinburgh and seek specialist advice before continuing in the Scheme.

  • Your total pension benefits from all sources are subject to a Lifetime Allowance tax threshold. The Lifetime Allowance for the following tax years is:
    2017/18 £1,000,000 (equivalent to a pension of about £50,000 pa)
    2016/17 £1,000,000
    2015/16 £1,250,000
    2014/15 £1,250,000
    2013/14 £1,500,000
    2012/13 £1,500,000
    2011/12 £1,800,000

  • If the value of your benefits exceeds the Lifetime Allowance they will be subject to additional tax. Before we pay retirement benefits from the Scheme, you will need to provide details of how much of the Lifetime Allowance you have already used up within other pension arrangements.Benefits over the Lifetime Allowance can be taken as a cash sum subject to a Lifetime Allowance tax charge of 55% or as additional pension which will be subject to a Lifetime Allowance tax charge of 25% plus your normal marginal income tax rate.

  • If the value of your pension benefits is close to (or above) the Lifetime Allowance, the amount of the tax-free cash you can take at retirement may be restricted.Different rules apply if you have one of the pension protections.Other events can also have an impact;e.g. a Pension Sharing Order following divorce or a period of time working overseas. Please tell the Pensions Team in Edinburgh if you believe special circumstances may apply to you.

  • There are no restrictions on the number of pension arrangements that you can be a member of at any one time.For example, if you wish, you can contribute to a personal pension (including a stakeholder pension) at the same time as paying contributions to the Scheme.You may generally obtain tax relief on pension contributions (to all schemes) up to the greater of 100% of your earnings or £3,600. However, each year, the pension benefits you earn in all pension schemes are subject to an Annual Allowance (AA) tax threshold.

  • The pension benefits you earn in the Scheme are measured over the year to 5 April (called the ‘Pension Input Period’). If, in one year, the total of the value of the pension benefits you earn in the Scheme, plus any contributions you pay to another pension scheme, exceed the Annual Allowance, you will generally be subject to an Annual Allowance tax charge.It is possible to carry forward any unused Annual Allowance from the previous 3 years. Exemptions to the Annual Allowance tax charge also exist such as in the event of serious ill-health retirement. If you incur an Annual Allowance tax charge you may have the option of asking the Scheme to pay the tax charge on your behalf in return for a reduction in your benefits from the Scheme. The Pensions Team in Edinburgh will provide full details of the available options in the event you incur an Annual Allowance tax charge under the Scheme

  • From 6 April 2016, the AA tax threshold is tapered for members who have a ‘threshold income’ of over £110,000 and an ‘adjusted income’ of £150,000. The rate of reduction in the annual allowance is by £1 for every £2 that the adjusted income exceeds £150,000, up to a maximum reduction of £30,000.The Annual Allowance for the following tax years is:
    2016/17 £40,000
    2015/16 £40,000
    2014/15 £40,000
    2013/14 £50,000
    2012/13 £50,000
    2011/12 £50,000

  • From 6 April 2015 individuals who meet certain criteria have been able to flexibly access pension savings in a money purchase arrangement (MPA) (including Additional Voluntary Contributions within defined benefit schemes such as DPS).If you flexibly access these arrangements you will be subject to a money purchase annual allowance of £10,000 in respect of your money purchase pension savings. Accessing money purchase arrangements flexibly is referred to as a ‘trigger event’. Examples of a trigger event are:

    • An Uncrystallised Fund Pension Lump Sum – where funds are withdrawn from a MPA and up to 25% is tax free;

    • Funds taken from a flexi-access drawdown arrangement;

    • Funds taken in excess of the cap in a capped drawdown arrangement;

    • Conversion of capped drawdown arrangement to a flexi-access drawdown arrangement and income taken;

    • Purchase of a flexible annuity;

    • Payment of pension from a MPA in which there are less than 12 pensioners; and

    • A standalone lump sum (from a MPA) if you have Primary Protection.

If you have received any of the above benefits since 6 April 2015 please let the Pensions Team know as this may impact figures we provide.

In addition to the above, the Trustee of the Diageo Pension Scheme has retained some of the pre 6 April 2006 Inland Revenue limits and incorporated them into the Scheme Rules.

Generally, this means that the maximum pension payable under the Scheme is calculated as 2/3rds of your final remuneration at age 60.  Furthermore, the maximum amount you can pay into the Scheme (including normal contributions and any Additional Voluntary Contributions) is 15% of your earnings subject to the Scheme Specific Earnings Cap (£150,600 for the 2016/17 tax year).

If you leave the Scheme before Normal Retirement Date, you will be known as a deferred member. You will have the following rights and options:

  • As a right, you will be entitled to a deferred pension calculated in the same way as at Normal Retirement Date but based on your pay and service at your date of leaving

  • You have the option to transfer your deferred pension to another pension arrangement

  • If you are age 50 or over, you may take an early retirement pension.

The deferred pension is payable from your normal retirement date.

Click here for details on how pensions increase whilst in deferment.

Early payment

You also have the option to claim your deferred pension at any time after age 50 with the Trustees' consent. The pension will normally be reduced because it is being paid early.

If you are entitled to a deferred pension and become seriously ill, you can apply to the Trustees for an incapacity pension. If you are granted an incapacity pension, the pension would not be reduced for early payment.

Transfer to another pension arrangement

If you leave the Company, you can choose to transfer the value of your deferred pension to your new employer's Scheme or to another suitable pension arrangement.

The transfer value is calculated on a basis agreed by the Trustees on the advice of the Scheme actuary and in accordance with legislation.

The Scheme provides you with peace of mind by providing benefits for your family if you die.

Any lump sum benefits payable on your death are payable at the discretion of the Trustees. Because of this, they're not subject to inheritance tax.  The Trustees will, however, take account of your wishes and it's therefore important to complete a Tell us who matters - lump sum payment form.

Death in service

If you die as an active member, the following benefits are payable:

  • life cover equal to the greater of either 4 times your Pensionable Pay or 4 times your Final pensionable Pay plus a refund of your own contributions

  • a pension for your spouse payable for life of 50% of your prospective pension (if you are unmarried this pension can be paid at the Trustees’ discretion to a dependant)

  • a pension for each child (up to a maximum of four) of 12.5% of your prospective pension

Death in deferment

If you die as a deferred member, the following benefits are payable:

  • a refund of your own contributions

  • a pension for your spouse payable for life of 50% of your deferred pension (if you are unmarried this pension can be paid at the Trustees’ discretion to a dependant)

  • a pension for each child (up to a maximum of four) of 12.5% of your deferred pension

Death in retirement

If you die following your retirement, the following benefits are payable:

  • a pension for your spouse payable for life of 50% of your pension at the date of death plus any pension you exchanged for a lump sum at retirement, with increases to date (if you are unmarried this pension may be paid at the Trustees’ discretion to a dependant)

  • a pension for each child (up to a maximum of four) of 12.5% of your pension at the date of death as described above

  • if you die within five years of retiring, the balance of five years' pension payments payable as a lump sum

The Scheme is set up and run under a Trust Deed and Rules. The Scheme is managed by a trustee company, Diageo Pension Trust Limited, whose directors are responsible for running the Scheme in the best interests of all the Scheme’s members. The day to day running of the Scheme is delegated to the Pensions Team in Edinburgh.

The Scheme assets are held entirely separate from those of the Company and can only be used for the benefit of members and their dependants. The Trustee manages the Scheme’s investments in accordance with the Trust Deed and Rules and the legislative requirements and it's Statement of Investment Principles.

Changing or closing the Scheme

The Trust Deed and Rules contain provisions for amending, closing or winding up the Scheme.

The Company may terminate the Scheme at any time by giving written notice to the Trustee. In addition, the Company may make changes to the Scheme subject to a period of consultation with members and certain legislative restrictions.

Your benefits are not assignable

Your Scheme benefits are strictly personal and cannot be assigned to any other person or used as security for a loan. Any attempt to do so may result in loss of benefits. Please note however, that should you divorce, the court has certain powers to allocate a proportion of your Scheme benefits to your ex-spouse.

Regulation of the Scheme

The Pensions Regulator

The Pensions Regulator is the regulator of work based pension schemes in the UK.

Its objectives are to:

  • protect the benefits of members of work based pension schemes;

  • to reduce the risk of situations arising which might lead to calls on the Pension Protection Fund; and

  • to raise the standards of administration of work based schemes.   

The Pensions Regulator is based at:

Napier House
Trafalgar Place
Brighton
BN1 4DW

Telephone:  01273 811 800

The Pension Protection Fund

The Pension Protection Fund (PPF) was established to pay compensation to members of eligible defined benefit schemes if their employer becomes insolvent and there are insufficient assets in the scheme to cover PPF levels of compensation.

Broadly speaking the PPF protects pensions in payment where the member is already over normal retirement age at the insolvency event (but with reduced pension increases); and 90% of benefits payable to members who were below this age at the insolvency event, up to a cap. The cap varies according to a schemes normal retirement age but is in the order of £27,700 (2008/09).

The PPF is funded by levies on pension schemes. The levy consists of a number of components; the two main ones are the risk based levy and the scheme based levy. The majority of the levy comes from the risk based element. This focuses on the funding level of the scheme and the strength of the employer.

The Pension Tracing Service

Details of the Scheme have been forwarded to the Pension Tracing Service. If in the future you should wish to contact the Pension Tracing Service to trace any previous pension rights you can write to:

The Pension Tracing Service
The Pensions Service
Tyneview Park
Whitley Road
Newcastle Upon Tyne
NE98 1BA 

Data Protection Act 1998

Under the Data Protection Act 1998, the Trustee of the Scheme is a ‘data controller’ in relation to your ‘personal data’.  Your personal data is information personal to you, and which identifies you, such as your name, address and National Insurance number.  Some of this information may be sensitive (such as details of your health and personal relationships).  As data controllers, the Trustee will process your sensitive and non-sensitive personal data – and that of other members and beneficiaries – for purposes associated with the Scheme (as indicated below). The Trustee may process your personal data itself, or use carefully selected advisors and third parties (data processors) to help it.

Processing personal data about you and others may involve transferring this personal data to third parties (in the UK or any other country) who advise or assist the Trustee, your employer and any business associated with it, prospective purchasers (although in the latter case, where practicable, the Trustee will provide anonymised data), Government bodies and persons authorised by you or by court orders.

Under the Data protection Act 1998, your consent to the Trustee (and any other data processors or other data controllers it uses) processing any personal data about you for any purposes associated with the Scheme is assumed to have been given.

Under the Data Protection Act 1998, as a data subject, you have certain rights in relation to the data we process about you, in particular, you have the right to access the information kept about you.

Keeping you informed

Each year, whilst you are an active member of the Scheme, you will be provided with a personal statement of benefits, which will illustrate the current value of your main Scheme benefits. In addition, if you pay AVCs, you will receive an AVC statement, which will show the value of your AVC fund.

In addition, each year you will receive a newsletter summarising the annual report and accounts and enclosing an Annual Funding Statement of the Scheme.

Any queries about the Scheme and your benefits should be referred to the Pensions Team in Edinburgh, who will always try to provide a prompt and accurate response.

If however, you are not satisfied with the response you receive, the Scheme has an internal disputes resolution procedure to resolve any disputes between the Scheme and its members and beneficiaries.  You can obtain a copy of the procedure from the Pensions Team in Edinburgh.

You may also apply to The Pensions Advisory Service (TPAS) for assistance at any time.  TPAS is available to help members and other beneficiaries who have pension queries or other difficulties, which they have not managed to resolve with their scheme’s trustees or administrators.  TPAS is a Government funded body and will allocate a professional adviser to liaise with the Scheme on your behalf. 

The Pensions Advisory Service
11 Belgrave Road
London
SW1V 1RB

Telephone:  0845 601 2923

Email: enquiries@pensionsadvisoryservice.org.uk

You may also approach the Pensions Ombudsman to decide a matter involving your membership of the Scheme. He can investigate and determine complaints or disputes of fact or law in relation to an occupational pension scheme which are referred to him within his jurisdiction under the Pensions Act 1993.

The Pensions Ombudsman
11 Belgrave Road
London
SW1V 1RB

Telephone:  020 7834 9144

Email: enquiries@pensions-ombudsman.org.uk