your guide to your pension · (avcs) into the scheme to boost your benefits. you are required to...

YOUR GUIDE TO YOUR PENSIONWITH SCOTTISH AMICABLE STAFF PENSION SCHEME

July 2018

IntroductionYour membership of the scheme is an important and valuable part of the package of benefits you receive from your employer in terms of providing you with an income in retirement.

It provides some financial protection for your family and dependants should you die before them. The scheme also provides you with a tax efficient way to save for your pension by paying additional voluntary contributions (AVCs). You should read this guide in conjunction with any other communications you have already received about the scheme.

Once you have read the guide, if you have any questions about the scheme please contact the scheme’s administration team at:

Scottish Amicable Staff Pension SchemePrudential Defined Benefitsc/o EquinitiScotia HouseCastle Business ParkStirlingFK9 4TZ

Email: [email protected]: 0345 268 0291

The scheme is administered under a trust, which is governed by a formal trust deed and rules. This guide is a summary of the provisions of the scheme. Every effort has been made to accurately reflect the trust deed and rules in this guide but if there are any differences the trust deed and rules will always take precedence.

July 2018

Membership of the schemeThe scheme was closed to new members from 1 August 2003. This closure did not affect the membership of those who joined the Scheme before that date.

Opting out of the schemeCurrent active members have a right to opt out of active membership of the scheme at any time. If you are an active member and wish to opt-out, you should first speak with your local HR team and then complete an opt-out form.

If you do opt-out of the scheme you should be aware that:

›› you will not build up any further benefits in the scheme;

›› you will not be able to re-join the scheme at a later date; and

›› if you opt out before your pension date, you will be treated as an early leaver and be entitled to benefits as set out in the section headed “Leaving the scheme” on page 8.

The Trustee recommends that you seek independent financial advice before taking any decision to opt-out of the scheme.

Contents

Introduction 2

Membership of the scheme 2

Contributions 3

Retirement benefits 4

Family benefits 6

Leaving the scheme 8

The small print 9

Definitions 18

2 Your Guide to your pension with Scottish Amicable Staff Pension Scheme

ContributionsThe scheme is funded by the employer, who pays the costs of providing the benefits and the expenses of operating the scheme.

Additional voluntary contributions If you wish you can pay additional voluntary contributions (AVCs) into the scheme to boost your benefits.

You are required to pay AVCs via Pensions Plus or via a deduction from your monthly salary (if you have opted out of Pensions Plus). Pensions Plus is an arrangement whereby you exchange part of your gross salary for pension contributions paid by the employer. The amount you sacrifice is paid to your pension by the employer on your behalf, rather than being paid by you. Since your gross salary (and your contractual pay) is reduced by the amount you sacrifice, you (and the employer) pay less National Insurance (NI) contributions without affecting your income tax and so your take home pay increases. Further details of the employer’s Pensions Plus arrangement can be obtained from the M&G Prudential Intranet.

You can pay up to 100% of your pay (after any reductions for flexible benefit decisions, if appropriate) into the scheme (though there are limits to how much can be paid via Pensions Plus) – subject to certain conditions – and immediate tax relief at your marginal rate of tax will normally be available on the full amount. However, a tax charge will be imposed if your increase in pension savings under all your registered pension schemes for a tax year is more than your Annual Allowance. For more details see page 11.

You can start, stop, increase or decrease your AVCs at any time, subject to giving sufficient notice.

The value of the benefits that your AVCs will provide will depend on several factors including the amount of the contribution paid, any cost of exercising any right to transfer the benefits, any charges payable, the age at which you access the benefits, the performance of the investments and any cost of converting the benefit into an annuity.

There may be other ways of increasing your pension benefits which suit you and your personal circumstances better than paying AVCs through the scheme. Before investing in any financial product you should take independent financial advice.

If you would like more information about AVCs please contact the administration team (see page 2).

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Retirement benefits

PensionYour pension builds up at a rate of 1/60th of your final salary for each year of pensionable service. So your pension is worked out as follows:

1/60 x final salary x pensionable service = annual pension

Pensionable service also includes any part years you work. So, for example, if you retired with a final salary of £20,000 and pensionable service of 25 years and six months, you would receive a pension of:

1/60 x £20,000 x 25.5 = £8,500 a year

There is no limit imposed by HM Revenue & Customs on the benefits the scheme can pay out but the aggregate pension savings you can build up in a tax-efficient way in all your registered pension schemes is limited to the Lifetime Allowance. Any benefits paid above the Lifetime Allowance are liable to be subject to a tax charge. For more details see page 11.

Your pension will be paid to you monthly on the 25th day of each month for the rest of your life, starting on the 25th of the month following your retirement date. Income tax will be deducted from each monthly payment under the PAYE system.

Tax-free cash sumYou have the option to convert part of your pension into a cash sum on retirement, which is currently paid tax free. Taking a cash sum in this way reduces the amount of pension you receive. When you approach your retirement date, you will be able to get more information about this option from the administration team (see page 2).

You can normally take up to 25% of the value of your pension as a tax-free cash sum up to a maximum of 25% of your remaining Lifetime Allowance.

Cash sum from AVC fundsIf you have paid AVCs, you have the option to withdraw any AVC funds as an additional cash sum on retirement. The technical term for this is an Uncrystallised Funds Pension Lump Sum (UFPLS). Usually, 75% of the cash sum will be taxed as income at your marginal rate and 25% will be paid tax free.

Early retirementCurrently you may be able to retire and take an immediate pension at any time from the age of 55, as long as the employer (or the trustee if you have a deferred pension) agrees. Your pension will be reduced to make allowance for the fact that it is being paid sooner and is likely to be paid for a longer period.

Late retirementIf you continue to work for the employer beyond your pension date, you may:

›› opt out of the scheme and take an immediate pension from your pension date;

›› opt out of the scheme and take your pension at the time you stop working for the employer, in which case your pension will be calculated as at your pension date but increased to take account of it being paid from a later retirement date; or

›› continue in pensionable service in the scheme and accrue further benefits, in which case your pension will be the greater of:

›❙ your pension calculated as at your pension date but increased to take account of it being paid from a later retirement date; and

›❙ your pension calculated as at the date you later opt out of the scheme or stop working for the employer.

If you choose to opt out of the scheme but do not take an immediate pension and are still working for the employer, and you die before you retire, you will be treated as having retired the day before you died and death benefits will be paid in accordance with “Death after you retire (before or after pension date)” (see page 6). You will be treated as having elected to take your maximum tax-free cash sum (see page 7), which will be paid as a lump sum.


Pension increasesOnce in payment, the scheme will provide increases on your pension as follows:

›› 3% (or the percentage increase in the retail prices index, if less) on that part which represents your “Guaranteed Minimum Pension” (GMP) earned from 6 April 1988; that part of your pension which represents your GMP earned before 6 April 1988 will not be increased by the scheme, but may instead be increased by the State if you reached State Pension Age before 6 April 2016. See “The scheme and the State pension scheme” on page 9 for further details about GMPs.

›› For members who retired from active service before 1 January 1997, were in active service on 1 January 1997 or who joined active service after 1 January 1997, 5% (or the percentage increase in the retail prices index, if less) on pension earned to 31 March 2006 and 2.5% (or the percentage increase in the retail prices index, if less) on pension earned from 1 April 2006.

Increases are paid on 1 July each year based on the RPI on 1 April.

Ill-health retirementIf you become too mentally or physically ill or incapacitated to continue working you may be able to retire and get a pension from the scheme whatever your age. You will need the permission of the employer to retire through ill-health. You will also have to provide medical evidence to the trustee and the employer to show that you meet the HM Revenue & Customs and the Scheme’s criteria for payment of an ill-health pension.

The pension will be worked out using your final salary and your pensionable service at the date you retire. The pension will not be reduced for early payment.

If you die while receiving a pension but before you reach your pension date a lump sum death benefit will be paid as described on page 6, based on the salary you were receiving on the day before you retired.

Extra pension for dependantsWhen you retire you may choose, with the consent of the trustee, to give up part of your own pension to provide an extra pension payable on your death for your dependants. Further information is available from the administration team (see page 2). If you wish to exercise this option, you should contact the administration team before you retire.

Flexible retirementYou have a number of options once you reach age 55 if you are an active member of the scheme and want to take your pension from the scheme and continue to work for the employer.

From age 55 you will have the choice of:

›› continuing your active membership of the scheme. The employer will continue to pay contributions on your behalf and you will continue to build up pension until you retire;

OR

›› taking your pension from the scheme and retiring, subject to employer approval;

OR

›› opting out of scheme membership altogether but deciding not to take your pension;

OR

›› taking your pension from the scheme but continuing to work for the company (this is called ‘flexible retirement’).

If you want to continue your active membership of the scheme, you need to take no action – your membership will be maintained and you will continue to build up pension benefits.

If you want to retire and/or take ‘flexible retirement’, you should speak to your local HR team in the first instance and request a copy of the scheme’s flexible retirement guide for more information about how flexible retirement works. Your benefits will be lower than at normal retirement as they will have less time to build up and your pension is likely to be paid for a longer time.

If you opt out of the scheme but decide not to take your pension, your benefits and options will be as set out in the section “Leaving the Scheme” on page 8.

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Family benefitsDeath before you retire (whether before or after pension date)If you die in pensionable service and are not in receipt of pension benefits under the scheme, whether this is before or after your pension date, the following benefits are payable:

›› a lump sum of four times your basic annual salary (excluding any non-pensionable payments from the employer) plus any contractual pensionable bonus received in the twelve months before your death;

›› any lump sum or other benefits payable in respect of any AVCs you have paid into the scheme;

›› a lump sum equal to the total of your contributions (other than AVCs) to the scheme prior to 1 July 1984;

›› a pension for your spouse of 1/90th of your final salary at the date of your death multiplied by:

›❙ if you die before your pension date, the total pensionable service you would have completed if you had retired at your pension date; and

›❙ if you die after your pension date, your pensionable service at date of death;

›› pensions for any dependent children you may leave of 1/8th of your spouse’s pension, subject to a maximum annual rate of half of your spouse’s pension (or £600 if more). If your spouse dies before you, or your spouse dies after you leaving dependent children, the pension payable to one of your children will be increased to the rate of the spouse’s pension and the remaining children will each receive a pension of 1/8th of your spouse’s pension, subject to a maximum annual rate of half of your spouse’s pension (or £600 if more). The trustee can distribute the amounts differently if it wishes depending on the circumstances in each case.

Death after you retire (before or after pension date)If you die after you have retired, whether this is before or after your pension date, the following benefits are payable:

›› if you die in the first five years of retirement, a benefit equal to the value of the unpaid instalments of those first five years of pension (payable in equal instalments or a lump sum at the trustee’s discretion) (Note: If you retired before your pension date because of ill-health and you die before your pension date, this benefit will not be paid.);

›› a spouse’s pension equal to:

›❙ if you retired before your pension date, 2/3rds of your own pension, including increases made to your pension between your retirement and your date of death; or

›❙ if you retired on or after your pension date, 1/90th of your final salary multiplied by your pensionable service;

›› pensions for any dependent children you may leave of 1/8th of your spouse’s pension, subject to a maximum annual rate of half of your spouse’s pension (or £600 if more). If your spouse dies before you, or your spouse dies after you leaving dependent children, the pension payable to one of your children will be increased to the rate of the spouse’s pension and the remaining children will each receive a pension of 1/8th of your spouse’s pension, subject to a maximum annual rate of half of your spouse’s pension (or £600 if more). The trustee can distribute the amounts differently if it wishes depending on the circumstances in each case.


Death after you leave pensionable service but before you retireIf you leave pensionable service and keep your benefits in the scheme, the following benefits will be payable if you die before you retire:

›› if you continue to work for the employer, you may be entitled to a lump sum death in service benefit paid either from the Scheme or from another arrangement operated by the employer;

›› on death before pension date, any lump sum or other benefits payable in respect of any AVCs you have paid into the scheme;

›› on death before pension date, a lump sum equal to the total of your contributions (other than AVCs) to the scheme prior to 1 July 1984;

›› a pension for your spouse equal to:

›❙ 1/160th of final pensionable salary multiplied by your complete years of membership of the scheme before 6 April 1997 while you were contracted-out of the State scheme.

OR, if higher:

›❙ your widow’s or widower’s GMP (see page 9)

plus

›❙ 1/160th of final salary multiplied by your complete years of contracted-out service while you were a member of the scheme from 6 April 1997 increased in accordance with statutory requirements from your date of leaving to the date of your death.

If you do not have a spouse when you die, or if your spouse dies after you leaving dependent children, a children’s pension will be payable. The amount of the children’s pension will be equal to the spouse’s pension that would otherwise have been payable in respect of you. If there is more than one dependent child, the trustee will share this amount between the children as it sees fit. The children’s pension(s) will cease to be payable when your first child reaches age 23 or otherwise ceases to be eligible.

See the section “The scheme and the State pension scheme” on page 9 for further details about contracting-out.

Payment of lump sumsAny lump sums payable on your death will be paid tax free provided you have not used up all your Lifetime Allowance at the date you die. If you do not have enough Lifetime Allowance left, part or all of the lump sum may be taxed.

The lump sum death benefit is insured under an insurance policy. Payment of the benefit is subject to completion of any underwriting requested of you, acceptance of the claim by the insurer and any terms and conditions they may properly impose.

Expression of wishes formsSo that the lump sums payable on your death can be paid free of inheritance tax, the trustee makes the final decision over who should receive these benefits. However, they will always take your wishes into account and so you should complete an expression of wishes form to let them know what your wishes are. You should keep this form up to date if your circumstances change (for example if you get married or divorced or if your civil partnership is dissolved or if you have children). You can get new forms from the administration team (see page 2).

Notes:1. If your spouse is more than 15 years younger than

you the trustee will reduce any spouse’s pension payable on a basis certified as reasonable by the scheme actuary.

2. If you die after you left service and within 180 days of your marriage that part of the spouse’s pension which is in excess of your widow’s or widower’s GMP (see “The scheme and the State pension scheme” on page 9) shall not be payable.

3. Your spouse’s and dependent children’s pensions will be increased in the same way as your own pension (see page 5).

4. Any spouse’s pension paid will be subject to income tax but its value will not count towards your spouse’s own Lifetime Allowance.

July 2018 7

Leaving the schemeIf you leave the scheme you have the choice of:

›› leaving your benefits in the scheme until you retire. This is known as opting for a deferred pension;

or

›› transferring your benefits out of the scheme to another suitable pension arrangement.

You will not be required to pay any additional charges.

Your deferred pension is calculated in the same way as your normal retirement pension but based on your final salary and completed pensionable service at the date you leave. It is then increased from the date you leave the scheme to the date you retire in accordance with statutory requirements. Broadly, this means your deferred pension will be revalued in line with inflation up to a maximum of (i) for benefits attributable to Pensionable Service before 6 April 2009, 5% per annum compound and (ii) for benefits attributable to Pensionable Service on or after 6 April 2009, 2.5% per annum compound. (If your deferred pension includes a GMP element, please see page 9 for details of how this will increase).

Further information regarding your options on leaving pensionable service are available from the administration team (page 2).


The small printYou should read this in conjunction with the rest of the guide and the defined terms are set out on pages 18 and 19 of this guide.

The scheme and the State pension schemeThe Scottish Amicable Staff Pension Scheme operates in conjunction with the State pension scheme.

For individuals reaching State Pension Age before 6 April 2016, there are two parts of the State scheme:

1. the basic State pension, which is a flat rate retirement pension paid to everyone who has paid sufficient National Insurance contributions; and

2. the State Second Pension (S2P), which is an additional pension, related to your earnings.

For individuals reaching State Pension Age from 6 April 2016, the State pension is a single-tier, flat-rate pension.

Further information about the state pension can be accessed at https://www.gov.uk/new-state-pension.

Contracting-outThe scheme was contracted-out of the S2P until 6 April 2016 when it ceased to be possible for the scheme to contract-out due to the introduction of the single-tier, flat-rate state pension. All active members of the scheme ceased to be in contracted-out service on 6 April 2016.

Guaranteed Minimum PensionsBefore 5 April 1997, in order to be contracted-out of the State Earnings Related Pension Scheme or “SERPS” the scheme had to promise to provide members with pensions that were subject to a minimum calculated in a similar way to SERPS for the same period of time. This minimum amount was known as the Guaranteed Minimum Pension (GMP).

Benefits for members who were contracted-out of SERPS before 6 April 1997 will not be less than the GMP. Spouses’ benefits will not be less than the widow’s or widower’s GMP which is:

›› for men – at least half your own GMP, and

›› for women, civil partners and same sex spouses – half your own GMP earned from 6 April 1988.

Once in payment, any GMP earned from 6 April 1988 will be increased by the scheme by 3%; any GMP earned before 6 April 1988 will not be increased by the scheme, but may instead be increased by the State for individuals who reached State Pension Age before 6 April 2016.

If you leave the scheme before your pension date and you are entitled to a deferred pension from the scheme, the GMP part of your deferred pension will be increased between the date you leave and your pension date at the rate laid down by the Government.

Payment of State pensionsYour eligibility for the basic State pension is unaffected by your membership of the scheme.State pensions are payable from State Pension Age. Your State Pension Age depends on your date of birth. You can check your State Pension Age at https://www.gov.uk/calculate-state-pension.

You may obtain a forecast from the Department for Work and Pensions (DWP) of how much pension you are likely to receive from the State. This can be done at any time by contacting the Future Pension Centre at:

The Pension Service 9Mail Handling Site AWolverhamptonWV98 1LU

Tel: 0345 3000 168

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How the scheme is managedThe scheme is operated under a trust which is administered by an appointed trustee. The trustee is a company. 50% of the directors of the trustee company are currently appointed by the principal employer and 50% are currently nominated by the members (Member Nominated Trustee Directors).

The trust is legally separate from the employer so its assets (the scheme’s investments) are held separately from the employer’s assets.

The trustee uses outside experts to ensure that the scheme rules are up to date and the scheme is run efficiently. It also delegates some of the day-to-day decision making, such as investment decisions, to its advisers. The advisers change from time to time and you will find up to date details of who the trustee’s advisers are in the annual report and accounts which is available on request from the administration team (see page 2).

AbsencesTemporary absenceMost absences from work are for a relatively short period of time and your membership and benefits under the scheme in these circumstances remains unchanged.

If you are away for a longer period due to illness or disability and you stop receiving contractual pay or statutory pay, your membership and benefits may be continued with trustee consent.

Maternity/adoption and shared parental leaveIf you are away from work to have or adopt a baby, or take time off to care for your child under shared parental leave, your membership and benefits under the scheme will continue in line with the company’s maternity and adoption/shared parental leave policy (as appropriate) and the scheme rules.

Your membership and benefits will continue on the same basis which would have applied to you had you been working normally. The company will continue to make its normal contributions on your behalf. Your benefits will continue to build up based on the full salary you would have received had you not been on maternity/adoption leave.

For further information please contact your local HR team or the administration team.

Paternity leaveYour membership and benefits will continue as if you were working normally.

Other leaveThere may be circumstances in which you need to take time off work for other reasons, for example parental leave or unpaid leave due to an emergency. In these circumstances please contact your local HR team for further information.

InformationBenefit StatementsYou will receive a benefit statement each year showing the pension you will receive (based on your current final salary) if you continue your scheme membership to your pension date. In addition, the benefit statement will show the amount of dependants’ pensions payable in the event of your death and the amount of your life assurance cover.

If you pay AVCs into the scheme, you will also receive a benefit statement each year showing the value of your AVC account and the level of benefit it may provide at your pension date in today’s money.

Scheme documentationAny scheme member can ask to see the trust deed and rules, the latest actuarial valuation and the annual report & accounts. Please contact the administration team (see page 2) in the first instance.

The small print continued


Tax and other important informationHM Revenue & CustomsThe scheme is a registered scheme for HM Revenue & Customs purposes. As a result, it enjoys various tax advantages:

›› tax relief is generally available on contributions paid into the scheme;

›› the money in the scheme largely builds up free of tax;

›› lump sum benefits are usually payable tax-free.

There are no limits imposed by HM Revenue & Customs on the amount of benefits that the scheme can provide nor on the amount of contributions that can be paid in. However, any benefits paid in excess of the Lifetime Allowance or contributions paid in excess of the Annual Allowance will be taxed.

You are responsible for monitoring your own position regarding the Annual Allowance and Lifetime Allowance and submitting the relevant information to HM Revenue & Customs. The trustee will supply information to assist with the completion of tax returns.

Shortly before your benefits become payable the trustee will ask you for information about the amount of Lifetime Allowance you have used in respect of other pension arrangements. Once your benefits start to be paid the trustee will provide a certificate detailing the amount of your Lifetime Allowance your benefits from the scheme have used up. You should keep all certificates issued to you about the Lifetime Allowance in a safe place.

Limits to your benefitsThe scheme was set up at a time when HM Revenue & Customs imposed limits on the level of benefits that the scheme could provide. To control the costs of the scheme and help protect its long-term funding and security, the trustee and the employer have decided to keep some of these limits and you will be informed individually if your benefits are affected.

Annual AllowanceThe Annual Allowance is a limit on the amount by which your pension savings can grow annually before being subject to tax. The period over which your pension savings are measured for comparison with the Annual Allowance is the “pension input period” which runs from 6 April to 5 April in the following year.

To work out the figure that counts towards your Annual Allowance you take the increase in your basic pension entitlement for the pension input period (the Scheme administrator can provide this information) and multiply it by 16. You then add the value of any AVCs you have paid that year to the scheme (and to any other schemes to which you are contributing). If the total is more than the Annual Allowance you will have to pay tax on the excess. You should contact the administration team for more information about the value of your scheme benefits for Annual Allowance purposes.

Lifetime AllowanceThe aggregate pension savings you can build up in a tax-efficient way in all your registered pension schemes is limited to the Lifetime Allowance. Any benefits paid above the Lifetime Allowance are liable to be subject to a tax charge.

July 2018 11

To estimate the value of your benefits in the scheme for comparison with the Lifetime Allowance, please follow the steps below:

›› Scheme pension - To calculate the value of your Scheme pension simply take the initial annual pension that will be put into payment, before tax, and multiply it by 20. For example, if your initial pension before tax is £15,000 pa then it has a value of £300,000 (i.e. £15,000 x 20) for Lifetime Allowance comparison purposes.

›› Tax free cash - The value of any tax free cash taken from the Scheme is simply the amount of cash actually taken. For example, if you take £100,000 of tax free cash, it has a value of £100,000 for Lifetime Allowance comparison purposes.

›› AVCs - You also need to include the value of your AVC pot, if you have one.

If you are receiving any pension payments from other sources the value of those pension payments for the purposes of the Lifetime Allowance is the amount of the pension pot in the case of defined contribution arrangements and, in the case of other defined benefit arrangements, any tax free cash taken plus:

›› 25 times the annual pension (if the pension started to be paid before 6 April 2006); or

›› 20 times the annual pension (if it started to be paid on or after 6 April 2006).

You should contact the administration team for more information about the value of your scheme benefits for Lifetime Allowance purposes.

Transfers inIf you have pension plans with other companies or previous employers or a personal pension, it may be possible, with the agreement of the trustee (and subject to HM Revenue & Customs requirements), to transfer the value of those into the scheme. The trustee will review applications for transfers and accept or decline them at their discretion.

Transfers outIf you leave the scheme before your pension date, instead of leaving your benefits (including AVC funds) in the scheme you may be able to transfer them to your new employer’s scheme, a personal or stakeholder pension scheme or an individual insurance policy. If you have paid AVCs, you may be able to transfer your AVC funds only, your main Scheme benefits only or all your Scheme benefits together. Various rules and regulations apply to transfers and you will be advised if these affect you. In particular, if the transfer value of your “safeguarded benefits” (scheme benefits excluding any AVC funds) is greater than £30,000 and if the transfer is being made to acquire “flexible benefits” including money purchase and cash balance benefits, you will need to obtain independent financial advice before the trustee will be able to process the transfer.

In calculating transfer payments, future pension increases are taken into account but not discretionary increases.

If you are an active member of the scheme, you may ask the trustee for an estimate of your transfer value at any time. This will be calculated as if you had left the scheme on the date the calculation is carried out. The transfer value provided will be indicative only and will not be guaranteed.

If you have left pensionable service in the scheme, you may ask the trustee for a guaranteed transfer value quotation at any time. This transfer value quotation of your benefits will be guaranteed for 3 months from the date on which it is given (excluding any AVC funds). The trustee is not obliged to give you another quotation within 12 months of your last request. If another statement is provided a charge may be made for the additional administration involved.



Divorce or dissolution of a civil partnershipIf you get divorced or dissolve your civil partnership your benefits under the scheme may become subject to a Court Order. This would require the trustee to allocate a specified part of your retirement benefits and death benefits under the scheme to your ex-spouse or your ex-civil partner.

If a Court Order applies to your scheme benefits you will be given details of the reduction to apply to your benefits. Any pension deducted from your own entitlement will count towards your ex-spouse’s or ex-civil partner’s Lifetime Allowance rather than your own.

On divorce or dissolution you should tell the trustee about the changes in your personal details. You should also consider changing any expression of wishes form you previously completed (see page 7).

The trustee may charge you for the cost of any work to do with a divorce or dissolution of a registered civil partnership.

Assigning your benefitsYou are not allowed to assign your benefits under the scheme or to use them as security for a loan.

Part-time serviceIf you are in part-time service, your benefits will be adjusted to reflect this.

If you switch from part-time to full-time service, or from full-time to part-time service, or if your hours of part-time service change, you will be advised of the effect on your benefits and any AVCs at the time.

Right of amendmentUnder the terms of the trust deed and rules, the trustee with the principal employer’s consent may vary details of the scheme for future service only.

Termination of the SchemeThe principal employer has no current plans to discontinue the scheme but reserves the right to do so at any time. If the scheme is terminated the trustee will use the assets of the scheme in the way set out in the trust deed and rules to secure members’ benefits.

Data ProtectionThe trustee holds personal data provided by you (and where appropriate, by third parties such as the employer or medical advisers about you), and uses that data, including sharing it with others (for example, the scheme administrator) in order to run the scheme

The trustee and the scheme actuary are data controllers under the UK Data Protection Act 2018 and the EU General Data Protection Regulation which came into effect on 25 May 2018). The Trustee has taken steps to ensure that it and any party to whom it passes your data complies with the new requirements. You can read more about how the trustee uses your data in the Scheme’s privacy notice, which is available at any time by writing to the Pensions Team, Prudential UK, 3 Sheldon Square, London W2 6PR.

July 2018 13


Resolving disputes

Usually any queries or complaints about the scheme can be sorted out informally. You should first address your query to the administration team (see page 2).

The Pensions Advisory Service (see page 15) is available to assist you with any pension query or complaint you may have.

If you are unable to resolve your query informally, you should follow the formal Internal Dispute Resolution Procedure (IDRP) set out on the right.

Stage 1 – Head of Staff Pensions ManagementPut your case in writing and address it to the Head of Staff Pensions, M&G Prudential, 3 Sheldon Square, London W2 6PR. Please include the subject of your complaint, an outline of the facts and the following personal details:

›› if you are a member – your full name, address, date of birth and National Insurance number;

›› if you are the dependant of a former member – your full name, address, date of birth and relationship to the member; and the member’s full name, date of birth and National Insurance number.

An acknowledgement will be sent on receipt of your complaint and you should expect a full written reply within two months. If this is not possible you will be notified as to why there is a delay and when a reply can be expected. You may, if you wish, nominate someone to represent you in making your complaint (for example a solicitor or colleague). Your representative should include their full name and address as well as your personal details, the subject of your complaint and an outline of the facts.

Stage 3 – External AdvisoryIf the reply from the trustee is not satisfactory, you can take your case to The Pensions Ombudsman (see page 15).

Stage 2 – The TrusteeIf you disagree with the reply from the Head of Staff Pensions you may complete a Stage 2 IDRP form, asking for the complaint to be reconsidered by the trustee and giving the reasons why you disagree with the response from Stage 1. A copy of the Stage 2 IDRP form is available from the administration team (see page 2). An acknowledgement will be sent on receipt of your Stage 2 IDRP form and you should expect a full written reply within two months. If this is not possible you will be notified as to why there is a delay and when a reply can be expected.

ExclusionsPlease note that this procedure does not cover:

›› any dispute which has nothing to do with the trustee (for example, a dispute which is solely with the employer);

›› a dispute which is already being investigated by the Pensions Ombudsman or where proceedings have started in a court or industrial tribunal;

›› if you transfer your benefits out of the scheme then this procedure is only available to you for six months after your transfer out.


Useful addresses

Pensions OmbudsmanThe Pensions Ombudsman may investigate and decide upon any complaint or dispute of fact or law in relation to an occupational pension scheme referred to him. However, the Pensions Ombudsman normally insists the matter is first dealt with through the Scheme’s own internal dispute resolution procedure. If you have any complaint or dispute that cannot be resolved by the internal dispute resolution procedure, or if you want assistance with a complaint or dispute you are considering raising with the trustee, you can contact the Pensions Ombudsman at:

10 South ColonnadeCanary Wharf E14 4PU

Tel: 0800 917 4487 Website: www.pensions-ombudsman.org.uk

The Pensions RegulatorThe Pensions Regulator is a regulatory body which has a range of powers to help safeguard pension rights of members of pension schemes and is able to intervene where trustees, employers or professional advisers have failed in their duties. The Pensions Regulator may be contacted at:

Napier HouseTrafalgar PlaceBrightonBN1 4DW

Telephone: 0345 600 7060Website: www.thepensionsregulator.gov.uk

TPAS (The Pensions Advisory Service)TPAS is an independent service that provides free help and advice to members and other beneficiaries of occupational and personal pension schemes. TPAS is available at any time to assist members and other beneficiaries with any pension query they may have or any difficulty they have failed to resolve with the trustees or administrators of the scheme. If you want to contact TPAS the address is:

11 Belgrave RoadLondonSW1V 1RB

Tel: 0800 011 3797Website: www.pensionsadvisoryservice.org.uk

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Your notes


July 2018 17

DefinitionsAnnual Allowance A limit on the amount by which your pension savings can grow in a tax year before being subject to tax.

The Annual Allowance for the 2017/18 tax year is £40,000. This will be reduced by 50p for each £1 of earnings over £150,000, tapering down to £10,000 for anyone earning £210,000 or more. For these purposes, “earnings” include the value of employer contributions to a registered pension scheme, as well as all taxable income from employment and other sources (i.e. from savings, investment or property). This means that some individuals with a salary of less than £150,000 will be affected.

If you access any defined contribution pension savings (e.g. Scheme AVCs) flexibly, your Annual Allowance for DC pension contributions will be £4,000 in the tax year 2017/18.

The Annual Allowance does not apply in the year you start to receive your benefits. An Annual Allowance tax charge applies to any benefits in excess of the Annual Allowance. There is the potential to carry forward unused Annual Allowance from the previous three years.

Civil Partner The person you are in a registered civil partnership with.

Dependant Any person (other than a child) who is financially dependent on or interdependent with you.

Dependent Child A child of a member of the scheme, including adopted children and any child to whose maintenance the member is legally obliged to contribute or at the trustee’s discretion any other child who the trustee considers was dependent on the member, up to the age of 23.

Earnings Cap An amount determined by the trustee on the same basis as the earnings cap that applied under pensions tax legislation before 6 April 2006. For the tax year beginning 6 April 2007 the earnings cap used by the scheme was £112,800 and this amount is increased yearly broadly in line with increases in prices. For the tax year beginning 6 April 2017 the earnings cap used by the scheme is £154,200.

Employer The principal employer together with any other employer whose employees are eligible for membership of the Scheme.

Final Salary If you are not eligible to receive new business bonus: your basic salary (before any reductions for flexible benefit decisions you made, if appropriate) in the last year before your pension date or earlier date of leaving pensionable service.

If you are eligible to receive new business bonus and are a sales official: your basic salary (before any reductions for flexible benefit decisions you made, if appropriate) in the last year before your pension date or earlier date of leaving pensionable service plus the yearly average of new business bonus (“on target” new business bonus only for members who joined after 14 December 1997) received in each of the previous three years.

If you are eligible to receive new business bonus and are not a sales official: the better of:

1. Final Salary calculated as for a member who is eligible to receive new business bonus and is a sales official; and

2. the sum of:

a. for benefits earned before 1 April 2009, Final Salary calculated as one third of your basic salary (before any reductions for flexible benefit decisions you make, if appropriate) in each of the three years before your pension date or earlier date of leaving pensionable service multiplied by the ratio of the salary appropriate to Grade 7C in the salary scale applicable to head office staff and branch sales support staff of the principal employer to the corresponding figure at the end of each year in question, plus the yearly average of new business bonus (“on target” new business bonus only for members who joined after 14 December 1997) received in each of the previous three years, increased to reflect statutory revaluation; and

b. for benefits earned from 1 April 2009, Final Salary calculated as for a member who is eligible to receive new business bonus and is a sales official.

In each case, final salary is subject to the earnings cap.


Final Pensionable SalaryYour final salary less an amount equal to the lesser of:

›› 1.25 times the basic State pension for a single person (see page 9). If you work less than 35 hours a week the deduction is 5/7ths of the basic State pension.

and

›› 1.5 x the annual equivalent of the lower earnings limit.

Final pensionable salary is only used to calculate your spouse’s pension if you leave the scheme and is subject to the earnings cap.

Lifetime Allowance The overall limit on the pension savings that will qualify for tax relief and will apply to all of the pension benefits you build up over your entire working life.

It is £1m worth of benefits at 6 April 2016. A Lifetime Allowance tax charge applies to all benefits in excess of the Lifetime Allowance.

Pension Date Your 60th birthday.

Pensionable Service Your years and complete months of continuous service as an active member of the scheme. It also includes any service credit that may have been notified to you separately.

Principal Employer Prudential Distribution Limited.

Sales Official A person classified as a sales official by the principal employer.

Scheme The Scottish Amicable Staff Pension Scheme.

Spouse This is the person you were married to at the date of your death and includes a same sex spouse. If you have entered into a registered civil partnership, spouse will include your civil partner.

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your guide to your pension · (avcs) into the scheme to boost your benefits. you are required to...

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