Diageo is committed to providing good quality pension benefits. The Diageo Lifestyle Plan (the Plan) is a ‘defined benefit’ pension scheme in which you build up credits in a Retirement Account. At retirement you use the value of your Retirement Account to buy a pension that suits your needs and lifestyle.The Company makes a substantial contribution towards providing you with all the benefits under the Plan.
Let’s have a look at what’s on offer:
Each month you will receive a notional credit in your Retirement Account of 25% of your Pensionable Pay*. You will only pay 6%. And you’ll get tax relief on your contributions so the cost to you is less than you may think.
Your Retirement Account is also increased each year in line with inflation up to 5%.
You will have the opportunity to retire between age 55 and 75.
When you retire you can use the value of your Retirement Account to provide you with benefits to suit your needs and lifestyle. The benefits can be provided as
a cash lump sum (you can take up to 25% of the value of your Retirement Account as a tax free lump sum with any more cash being taxable at your marginal rate of income tax);
an annuity (a pension) from an insurance company;
flexi-access drawdown (allowing you to take a cash lump sum and/or an income without buying an annuity); or
a combination of the above.
A minimum of six times your Pensionable Pay* will be paid on death in service or ill health.If you die in service this amount will be paid as a lump sum to your family.
If you are unable to work due to ill health or disability this amount will be used to provide you with an income although you will have the option to take part of it as a cash sum.
If you leave Diageo before retirement you have the option to transfer your benefits to another pension arrangement.
*Pensionable Pay is your basic salary plus any regular payments specifically stated to be pensionable in your contract of employment. From 1 January 2014 Pensionable Pay is capped at £160,000 (previously capped at £200,000 from 1 April 2011) for the purposes of calculating member contributions and the credit to your Retirement Account.