When you leave the Company, if you are under the minimum retirement age (which is currently 55 increasing to 57 from April 2028), your pension will become deferred in the Scheme. Your deferred pension is calculated by taking your Pensionable Service and Final Pensionable Earnings at the date you left employment to calculate your pension using the same formula as for Normal Retirement but using your service up to your date of leaving.
The pension that is calculated is payable from age 65. You can apply to take the pension early, but it will be reduced to reflect the longer payment period. Early retirement is granted at the discretion of the Trustees and will only be approved if the reduced early retirement pension exceeds any Guaranteed Minimum Pension (GMP) that the Scheme must pay from your GMP Payment Date.
Following the introduction of the Single Tier State Pension, contracting out of the State Second Pension ceased on 6 April 2016. Benefits in the Scheme prior to this date will continue to include an element of GMP which the Scheme is required to provide for members with Pensionable Service prior to April 1997. The GMP does not affect the calculation of your overall pension but is required to be increased in a different way to the rest of the Scheme pension.
Once your pension is deferred, it will be revalued (or increased) each year between the date that you leave and the date you take your benefits. Your pension will be split into a number of periods of service and the increase applied differently to each part. You can find more information on how the increases are applied here.
If you leave the Scheme and you are over the minimum retirement age, then you may wish to speak to your local HR about taking early retirement. The early retirement terms are better for active employees. For more information on the early retirement terms that apply when retiring as an active employee or as a deferred member please click here.
The minimum pension age is increasing from age 55 to 57 on 6 April 2028. In certain circumstance members who joined before 1 January 1993 can retire early from age 50. The change to the minimum pension age will not affect these members.
If you are suffering from a medical condition that means you are permanently unable to perform your role within the Company, you may be able to apply to take your benefits early. Please click here for more information.
Once your pension is deferred, you may consider transferring the value of your benefits to another registered pension scheme. For more information about transferring out please click here.