How does the Plan work?

As a member of the Plan you  will have a Retirement Account.  The benefits provided under the Plan will be determined by reference to the amount in your Retirement Account. 

You will receive a credit in your Retirement Account of 25% of your Pensionable Pay* for each pay period you are in Service and a member of the Plan.  Pensionable Pay is your basic salary plus any regular payments specifically stated to be pensionable in your contract of employment.

Whilst you are in Service, provided you have not reached age 65 i.e. your Normal Pension Date, your Retirement Account will be increased each 31 December as follows:

  • any credits to your Retirement Account up to 30 June 2012 will increase in the future in line with the rise in the Retail Prices Index (RPI), up to a maximum of 5% a year;

  • any credits to your Retirement Account from 1 July 2012 will be increased in line with the rise in the Consumer Prices Index (CPI), up to a maximum of 5% a year.

The increases will be applied to the value of your Retirement Account at the previous 1 January as shown in the examples below. 

Example 1:

A member joins the Plan on 1 January 2013 with an initial Pensionable Pay of £20,000 which we have assumed will increase each year by £600. The member’s Retirement Account is calculated as follows (for the purposes of this example we have assumed that CPI is 2% each year). 

Example 1 Image Representation

 *  Pensionable Pay is your basic salary plus any regular emoluments specifically stated to be pensionable in your contract of employment or as otherwise determined by the Company. From 1 January 2014 Pensionable Pay will be capped at £160,000 (previously capped at £200,000 from 1 April 2011) for the purposes of calculating your contributions and the credit to your Retirement Account. If you participate in Salary Exchange for Pensions, Pensionable Pay is your pay before the deduction of the contributions (salary exchange adjustment).

More information on Salary Exchange for Pensions can be found by clicking here.

Example 2:

A member joined the Plan on 1 January 2011 with an initial Pensionable Pay of £25,000 which we have assumed will increase each year by £750. Any credits to the Retirement Account up to 30 June 2012 will increase in line with the RPI up to 5%. Any credits to the Retirement Account from 1 July 2012 will increase in line with the CPI up to 5%. For this example we have assumed CPI to be 2% per annum and RPI to be 2.5% per annum.

Example 2 Image Representation 
* Pensionable Pay is your basic salary plus any regular emoluments specifically stated to be pensionable in your contract of employment or as otherwise determined by the Company. 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 your contributions and the credit to your Retirement Account. If you participate in Salary Exchange for Pensions, Pensionable Pay is your pay before the deduction of the contributions (salary exchange adjustment).

More information on Salary Exchange for Pensions can be found by clicking here.