DB Consultation on proposed Pension Scheme changes
You may be aware the Government announced some time ago that a new Single Tier State Pension would be introduced and contracting out of the State Second Pension (S2P) would cease. These changes will become effective on 6 April 2016. From that date both employers and members of contracted out pension schemes, like the Defined Benefit (DB) Sections of the Associated British Foods Pension Scheme (the Scheme), will see an increase in their National Insurance Contributions. The Company will see an increase of 3.4% and your own National Insurance will from that date be paid at the full rate, which will mean an increase of 1.4% for you as an individual on middle band earnings, which for the 2015/2016 tax year are earnings between £5,824 and £42,380.
The DB sections of the Scheme were designed to provide members with a combined pension benefit calculated to reflect that the Scheme would pay an amount of pension in place of the S2P pension that would not be paid by the State as the member had been contracted out i.e. an integrated arrangement.
From April 2016, the Scheme in its current structure cannot continue. Associated British Foods plc (the Company) does not want to close the Defined Benefit section for you and has such been working to create a new Defined Benefit section to provide you with benefits from 6 April 2016.
Letters from the Company and the Chair of the Trustee Board have been loaded to your secure online account where you will find more information and a personalised statement. If you have any problems logging in, please contact Group Pensions at email@example.com.