Pension benefits
At a glance
When you reach your Normal Retirement Date at age 65, your pension would generally be worked out as:
1/60 X Final Pensionable Pay x Pensionable Service*
Pensionable Service: Your Pensionable Service ended when the DB section of the Plan closed in January 2009 (or before, if you left the Plan before that).
Your Final Pensionable Pay: This is your highest average annual Pensionable Pay in any three consecutive tax years, in your last ten years of pensionable service before retirement. Your Pensionable Pay is the pay on which you paid contributions, which was generally your basic pay.
*Please note that there are a few members who built up pension at a different rate for some of their service – you can check if this applies to you by logging in to the secure area of the website: Member Online
Case study
Eric retires at age 65 in April 2022. He joined the Plan in 2000, so he had nine years’ service before the Plan closed in January 2009. He went part time in the last few years so his earnings have varied a little. But his highest earnings in three consecutive years in the last 10 years were in 2015-2017, when he was still full time. At that time his Pensionable Pay was:
2015: £35,000
2016: £35,500
2017: £35,700
So Eric’s Final Pensionable Pay is the average of these:
£35,000 + £35,500 + £35,700 = £106,200 / 3 = £35,400
Eric’s pension is therefore calculated as:
1/60 x £35,400 x 9 years = £5,309.98 a year
As explained below, Eric could choose to exchange part of his pension for a tax-free cash lump sum.
Taking a cash lump sum
You can choose to exchange part of your pension for a tax-free cash lump sum of up to 25% of the total value of your benefits, if you wish. In most cases the maximum tax-free lump sum (across your pension schemes) is £268,275.
See your own benefits
Did you know that you can see the current value of your own benefits by logging onto the secure area of the website: Member Online?