Frequently Asked Questions

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Pensioners

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The tax office responsible for your ABF pension is:

HM Revenue & Customs (HMRC)
Pay As You Earn
PO Box 1970
Liverpool
L75 1WX

Tel.No. : 0300 200 3300 (+44 135 535 9022 if calling from overseas)

The ABF reference number which you should quote if you contact the tax office is 126/40510.They will require your National Insurance number.

It is important to remember that we can only apply the tax code issued to us by HMRC and also that HMRC will not discuss any individual codes with us. If you have a query you will have to make contact with their office – but if you are still having problems, please let us know.

When we start paying your pension, we will apply a 'BR code' which means that you will pay basic rate tax on your entire pension until HMRC issues us with a new code. We apply the BR code on a 'month 1' basis.

No. Payslips are issued to all pensioners in April each year and then only when your net pension changes by £1.00 or more from the previous month. This can happen after a change of tax code has been applied. You can look on this website and find details of your last 3 pension payments made, showing the gross and net payments and the tax deducted.

Your pension is paid monthly in advance on the sixth day of each month. This means that each monthly payment covers the period from the sixth day of one month to the fifth day of the following month. If the sixth falls on a weekend or bank holiday you will be paid on the last working day before the sixth.

Your pension is paid directly into either your bank or building society account. For security reasons we do not pay your pension by cheque. We are also not able to pay your pension into any other person’s bank or building society account unless a Court Order, Power of Attorney or equivalent is obtained.

Important: If your account has not been credited with your pension by the 12th day of any month, please contact one of the payroll administrators at the Pensions Department.

Although tax is not deducted from the State Pension when you receive it, the State Pension is taxable. HMRC will take into account your State Pension, your ABF Pension and any other income that you receive for the purpose of calculating your tax liability. Any tax which is due on your State Pension may be deducted from your ABF Pension.

No. Your pension is payable for life and does not cease on remarriage.

All such changes need to be provided in writing. It is important to advise us as soon as possible as we process the payroll approximately 10 days before payment date. Any changes received after we have begun processing the payroll will not be included until the following month’s payroll. If any correspondence we send you is returned, we will suspend payment of your pension until you write to us with your new address.

To change your personal/address details:

You will need to confirm the change of your personal and address details in writing quoting your member number to the Pensions Department.

Please download and return a 'Change of bank account details' form from the literature section and return to the Pensions Department.

Taxation

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If the overall value of pension benefits increases by more than the Annual Allowance in a year, a tax charge (Annual Allowance Charge) has to be paid on the excess increase in benefits over the Annual Allowance.

If you pay pension contributions outside of the Scheme, then any additional tax due (effectively removing the tax relief received on the excess contributions) will need to be dealt with as part of your self-assessment tax return.

To calculate the value of Final Salary (DB) pension benefits accrued over a period, you need to:

Calculate the total value of Final Salary benefits at the start of the period by multiplying the pension amount at the start of the period by 16 (A)

Calculate the total value of Final Salary benefits at the end of the period by multiplying the pension amount at the end of the period by 16 (B)

Increase the value in (A) by CPI over the period and deduct this from (B)

Note that for the period 6th April 2015 to 5th April 2016, CPI can be assumed to be 2.5%.

The value of benefits from any DC type arrangement for AA purposes is the total amount of contributions that have been paid in over the period.

To calculate the likely value of Final Salary (DB) pension benefits accrued between 6th April 2015 and 8th July 2015 and between 9th July 2015 and 5th April 2016, you need to:

Calculate your Final Salary pension at 6 April 2015 and multiply this by 16 (A)

Estimate your Final Salary pension at 5 April 2016 and multiply this by 16 (B)

Increase the value in (A) by 2.5% and deduct this from (B) - this gives you (C)

The value of Final Salary benefits for the period 6 April 2015 to 8 July 2015 is (C) x 94/366 (94 days during period and 2016 is a leap year)

The value of Final Salary benefits for the period 9 July 2015 to 5 April 2016 is (C) x 272/366

To calculate the value of accrued final salary benefits in the DB Section at any time before retirement, multiply the current annual pension amount by 20. For example a current accrued pension of £12,000pa has a value of £240,000 i.e. £12,000 x 20.

To calculate the value of final salary benefits either at the point of retirement or in payment, multiply the annual pension at that time by 20. For example, a pension in payment of £15,000pa has a value of £300,000 i.e. £15,000 x 20. The value of any tax free lump sum taken at retirement should be added to this if the pension is already in payment.

Note though that any pensions which started being paid before April 2006 are valued using a multiplier of 25 instead of 20 and any tax free lump sum taken can be ignored.

The value of benefits from any DC type arrangement e.g. the DC Section, Personal Pensions and Additional Voluntary Contributions for LTA purposes is simply the current fund value or the fund used to secure the benefits on retirement.

The Group Pensions Department are not able to calculate your personal Annual Allowance or your Carry Forward. We are not tax experts and are unable to perform this calculation for you. We will provide you with the Pension Savings that you have used in the year on your Annual Benefit Statement.

If you require assistance in assessing your personal tax position, we strongly recommend you seek professional advice.

Disclaimer: The pension tax changes affect your personal tax status so it is your responsibility to ensure that you understand the impact of the changes. The Scheme and the Company can accept no liability for any tax charges incurred.

The Group Pensions Department is not allowed to give you advice about your personal tax position. You could seek advice from a financial adviser – you can find information on financial advisers by visiting register.fca.org.uk

If your overall pension benefits are more than the Lifetime Allowance, a tax charge (the Lifetime Allowance Charge) has to be paid on the excess benefits.

If your pension benefits are over 90% of the LTA, then you can opt out of future pension savings altogether (for example, to apply to HMRC for ‘fixed’ protection). Instead of pension benefits you will receive a taxable salary supplement from the Company which will depend on which section of the Scheme you are a member of. In addition, your death in service benefits will continue to be calculated as if you had remained a member of the Scheme.

If your pension benefits are less than 90% of the LTA, then you can opt out as above only if you are able to supply a copy of formal advice from a qualified Financial Adviser recommending this, a copy of your application for protection, and confirmation of protection once it has been granted.

Transferring Out

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A transfer out is the payment of a sum of money from one pension scheme to another. Once the payment is made, you and your family no longer hold benefits in the original (transferring) scheme and the new (receiving) scheme takes over the responsibility for providing those benefits.

There are a number of things that we check for before making the payment:

  • We must receive all our requirements before we can make the payment
  • You must be a deferred member of the Scheme. If you are still active and making contributions then you will need to opt out and wait for this to be processed before we can make the payment
  • We can only make the payment to an approved pension arrangement - we do a number of checks on the receiving arrangement to make sure that they are approved and are not being used as a scam or liberation scheme. If we are unable to establish the status of the scheme, we will write to both you and the scheme administrators to obtain more information.

If you are already a deferred member, the transfer value is guaranteed for 3 months from the date it is calculated. This should allow enough time for you to obtain the necessary financial advice, however it will be important that your adviser is given a full copy of the transfer pack as this contains all the information that they should need to advise you on the transfer.

If you are an active member, we cannot provide a guaranteed transfer value. This is because the transfer value is calculated using your deferred pension, therefore until we know what your deferred pension is, we can only provide you with an estimated, non-guaranteed transfer value.

It is the responsibility of your new scheme to tell you what benefits you will be provided with once you transfer. Even if you are transferring to another Defined Benefit arrangement, the benefits are likely to be different so it is important that you understand what will change and what impact that may have on the benefits payable both at retirement and in the event of your death.

As you hold benefits in the Defined Benefit section, we have to convert your annual pension to a value. This calculation is done on a basis specified by the Scheme Actuary (a qualified expert on pension scheme funding). The calculation takes into account a number of factors including your age, future investment returns and current financial market conditions.

Generally, when you transfer your benefits everything is transferred. If the receiving arrangement isn't able to accept GMP, or you don't wish to transfer your AVCs, then these can be left in the Scheme when the rest of the benefits are transferred. If you are interested in either of these options, then please contact the Member Services team on 0800 090 2267.