Staff Section

These pages describe the benefits for employees who joined the Staff section of the Grand Metropolitan Irish Pension Fund.

Please note that the following pages only describe the benefits under the Staff section of the Fund. If you have ever been a member of the Executive section, you will need to refer to the Executive section on this site for details of the benefits payable in respect of that period of membership.

The Fund 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 Normal Pension Date with more than 2 years of membership of the Fund

  • An opportunity to provide additional pension benefits by making Additional Voluntary Contributions

Eligibility

The Fund closed to new entrants from 10 May 2013.

Proof of age and marital status

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 Diageo Pensions Team if a change occurs in your marital status whilst you are a member of the Fund.

Evidence of health

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.

Do I contribute to the Fund?

You contribute 5% of your Contribution Pay to the Fund.  The Company meets the balance of the cost of providing the Fund 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 Fund. To ensure that the amount of money going into the Fund is at the level necessary to meet its future needs, the actuary carries out a valuation every three years and advises on the Fund’s financial health. Following an actuarial valuation it might be necessary to adjust the contributions payable by the Company and/or the members.

At Normal Pension Date

How is my Fund pension at Normal Pension Date calculated?

Your Fund pension is calculated using the following formula:

1.67% x Final Pensionable Pay x Pensionable Service on or after 1 October 2000

PLUS, if applicable, the accrued pension credit for any Pensionable Service prior to 1 October 2000.

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.

What is the maximum pension payable under the Fund?

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 more information on the SFT.

Fund pension and any additional pension purchased by your Additional Voluntary Contributions cannot exceed Revenue Commissioners’ limits, which will be advised on request.

Example:

Final Pensionable Pay at Normal Pension Date      €45,000 pa
Pensionable Service                                                  30 years
Pension calculation                                                   1.67% x 30 x €45,000
Giving a Fund pension of                                          €22,545 pa

In addition to the Fund pension, you may be entitled to a benefit from the State.

On retirement due to ill health

If you have to retire early because of ill health, you can apply to the Trustee for payment of an ill-health pension.

There are two levels of ill-health pension:

1. Permanent ill-health pension

You can receive this pension at any age if, in the opinion of the Trustee, having received medical advice, you are prevented from doing your own or another similar job or your earnings capacity is seriously impaired and you are unlikely to recover to any substantial degree.  This pension will be equal to the pension you would have received had you remained in service until Normal Pension Date but based on your Final Pensionable Pay at the date of ill-health retirement. 

Your pension will be calculated as follows:

1.67% x Final Pensionable Pay x Pensionable Service (actual service plus years you could have completed to your Normal Pension Date).

Example:

Age                                                     45
Actual service at date of early 
retirement due to illness                     20 years
Pensionable Service                       40 years (20 actual + 20 credit years)
Final Pensionable Pay at date 
of retirement                                  €45,000 pa
Pension calculation                        1.67% x 40 x €45,000
Giving a Fund pension of                 €30,060

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.

In addition to the Fund pension, you may be entitled to a benefit from the State.

2. Breakdown-in-health pension

You can receive this pension at any age if, in the opinion of the Trustee, having received medical advice, your ill health prevents you from doing your own job but you do not satisfy the criteria for a permanent ill-health pension.  The pension will be based on your actual Pensionable Service and Final Pensionable Pay at the point of ill-health retirement. 

Your pension will be calculated as follows:
1.67% x Final Pensionable Pay x Pensionable Service (actual service only).

Example:

Age                                                45
Pensionable Service at date of early 
retirement due to illness                     20 years
Final Pensionable Pay at date 
of retirement                                    €45,000 pa
Pension calculation                            1.67% x 20 x €45,000
Giving a Fund pension of                     €15,000

 

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.

In addition to the Fund pension, you may be entitled to a benefit from the State.

On late retirement

At the request of the Company, you may remain in service after your Normal Pension Date.

Your options under the Fund will be explained to you at this time.

Option to take part of pension as a cash lump sum

At retirement you have the option to exchange part of your Fund 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:
3.75% x Pay x Pensionable 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. Where retirement is due to extreme incapacity, the Trustee may pay a lump sum in full settlement of your pension less any tax which may be due on the payment.

Example:

Pay at date of retirement            €45,000 pa
Pensionable Service                    40 years
Maximum cash lump sum benefit    €45,000 x 40 x 3.75% = €67,500

If you take a cash lump sum from the Fund, your pension will be reduced accordingly. The amount of your reduced pension will be advised by the Diageo Pensions Team 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 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 your Normal Pension Date you will be entitled to a deferred pension calculated in the same way as the pension at Normal Pension Date, but based on Pensionable Service and Final Pensionable Pay at date of leaving. This pension will be payable from your Normal Pension Date.

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%).

Payments made on death in service

Cash lump sum

If you die in service, a cash lump sum of four times your Pensionable Pay at the date of death is payable together with a refund of your contributions to the Fund.

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. 

Spouse’s pension

Your spouse will also be paid a pension for life equal to 50% of the pension you would have received if you had survived to Normal Pension Date, but based on your Final Pensionable Pay at date of death.

If you are unmarried and want someone who is financially reliant on you to receive a dependant's pension on your death, you should complete an Expression of Wish Form available from the Pensions Team. A nomination will only be accepted on this form and the payment of any benefit is subject to the approval of the Trustee.

The amount and duration of that pension is at the discretion of the Trustee.

Children’s pension

If there are dependent children (i.e. children aged under 18 or under 22 if undergoing full-time education or vocational training) a pension will be paid equal to 12.5% of your prospective pension to each child, up to a maximum of 50% for four or more children.

Example:

A member dies in service and is survived by a spouse and two dependent children. Had the member lived to their Normal Retirement Date, Pensionable Service would have been 40 years.

Final Pensionable Pay at 
date of death                                         €45,000 pa
Prospective pension                             1.67% x 40 x €45,000 = €30,060 pa
Spouse’s pension from Fund               50% of €30,060 pa = €15,030 pa
Children’s pension from Fund             25% of €30,060 pa = €7,515 pa
Cash lump sum benefit from Fund    €180,000 (4 years’ Final Pensionable
                                                Pay)

In addition to the benefits payable from the Fund, a State Pension and Child Allowances may be payable.

Payments made on death after retirement

Cash lump sum

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.

Spouse’s pension

Your spouse will receive a pension equal to 50% of the Fund 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 are unmarried and want someone who is financially reliant on you to receive a dependant's pension on your death, you should complete an Expression of Wish Form available from the Pensions Team. A nomination will only be accepted on this form and the payment of any benefit is subject to the approval of the Trustee.

The amount and duration of that pension is at the discretion of the Trustee.

Children’s pension

If there are dependent children (i.e. children aged under 18 or under 22 if undergoing full-time education or vocational training) a pension will be paid equal to 12.5% of the Fund 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, to each child, up to a maximum of 50% for four or more children.

Example:

Fund pension at date of death             €28,000 pa
Member exchanged part of Fund 
pension for a cash lump sum at time 
of retirement and, ignoring this, 
pension would have been                      €32,000 pa
Spouse’s pension from Fund                  50% of €32,000 pa =  €16,000 pa

In addition to the benefits payable from the Fund, 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.

Payments made on death after leaving service before reaching your Normal Retirement Date

If you are survived by a spouse, they would be entitled to a pension of 50% of your deferred pension at date of death, and children’s pensions will also be payable. In certain circumstances the Trustee may pay a pension to a dependant.  The amount and duration of that pension is at the discretion of the Trustee.

If a pension is payable, a lump sum equal to your contributions will be payable in addition. The Trustee has discretion over who receives the lump sum. If no pensions are payable, a lump sum equal to the greater of a refund of your contributions and the actuarial value of your pension will be paid to your estate.

Deferred pensions are increased between the date of leaving and Normal Pension Date by the increase in the Consumer Price Index (CPI), up to a maximum of 5% each year.

Pensions in payment which have been built up before 1 January 2014 are guaranteed to increase in line with inflation each year up to 5% and subject to a minimum of 3%. 

For benefits built up from 1 January 2014 consideration will be given by the Company to awarding discretionary pension increases on a regular basis and where such pension increases are granted; normally they will be effective on 1 April. In deciding whether or not to exercise its discretion and if so, the amount of such increase, the Employer will have regard to:

  • the funding position and solvency of the Fund;

  • the extent to which any funding plan agreed between the Employer and the Trustee is considered to be “on track”;

  • the trend in inflation - currently the Consumer Price Index (CPI) - over an appropriate period.

Where the Company exercises its discretion to award an increase, it will be effective from 1 April and at the lower of:

  • the rate of price inflation; and

  • 3.0% per annum

In periods of deflation, as have been experienced in recent years, there will be no reduction in the level of pension, although the effects of the deflation may be taken into account in deciding on the appropriate level of increase to be given when inflation is later taken into account. This policy will be subject to future review.

How is the Fund constituted?

The Fund is a defined benefit scheme for the purposes of the Pension Act 1990, established under irrevocable trust and is approved as an Exempt Approved Fund under Chapter 30, Part I of the Taxes Consolidation Act 1997. Benefits paid under the Fund must be within the limits specified by the Revenue Commissioners from time to time. The Fund has been registered with the Pensions Board (PB No. 1838).

The money to meet the cost of the Fund benefits is held in a single fund under the control of the Trustee and is invested on the advice of specialist advisers.

Can the Fund be changed or discontinued?

The Trust Deed and Rules of the Fund contain powers of amendment. The Fund may therefore be changed from time to time, subject to any relevant legislation.

The Company reserves the right to discontinue the Fund at any time. However, if this were to happen, you would receive advance notice.

How are pensions paid?

Pensions are normally paid monthly by credit transfer to your Bank or Building Society account.

Will my pensions be taxed?

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 Fund 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.

Assignment of benefits

The benefits provided under the Fund are strictly personal to you and your dependants and may not be used as security for borrowings or assigned in any other way.

Judicial separation and divorce and Pension Adjustment Orders

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.

What happens if I have a dispute?

If you have a complaint or dispute relating to your Fund membership, you should first contact the Financial Services Manager - Pensions Administration in Edinburgh. If the Financial Services Manager - Pensions Administration is unable to resolve the issue to your satisfaction, you may then use the Fund’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 Fund’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.