Retirement Benefits
This section describes the benefits you will receive from the Scheme if you stay in the Group’s employment until you retire. The actual benefits will depend on whether you stay with the Group until your Normal Pension Date or retire early.
Cash sum at retirement
What will my pension be at Normal Pension Date?
If you work for the Group until your Normal Pension Date, you will be entitled to an annual pension which is linked to your salary and service. The rate at which the pension grows depends on whether you are a
Pre 95 Member or a
Post 95 Member.
The first of two key steps in calculating your pension is as follows:
Please note that complete months of service in a part year count towards your Target Percentage.
The second step in calculating the pension is then:
The maximum pension payable at Normal Pension Date is 2/3rds x Final Pensionable Salary (subject to the Individual Salary Cap)
If you are a Long-standing Member please click here for details of how your benefits are calculated
Can I retire early?
You may seek early retirement subject to the consent of the Group and the Trustees and draw an immediate pension, however, currently you must be aged 55 to take early retirement under Government legislation.
Early retirement benefits are calculated by revaluing your accrued deferred pension as at your date of leaving/retirement date to your Normal Retirement Date (NRD) and then reducing that estimated pension at NRD by the appropriate early retirement factor (currently 5.75% a year compound). The reduction is not a penalty but simply reflects the longer time the pension is paid. For Senior members with a Normal Retirement Age of 60, pension accrued after 1 July 2011 is only payable from 65 unreduced.Deferred pensions increase in deferment in line with price inflation over complete years of deferment, but subject to certain limits. Pension earned before 6 April 2009 will not increase by more than 5.00% per annum. Pension earned after 5 April 2009 will not increase by more than 2.50% per annum. When estimating retirement pension figures we assume the preserved pension increases by assumed inflation of 2.40% per annum for future years. If future inflation is lower than this assumption the actual amount payable will be less. Inflation is currently assessed using the Retail Prices Index for periods up to 2011 and the Consumer Price Index thereafter.
Please note that factors and assumed inflation rates are subject to regular review and could change at any time with immediate effect.
What if I am too ill to continue working?
If you are in serious ill-health so that you are unable to continue your job, you may seek early retirement at any time subject to the consent of the Group and the Trustees. The amount of your ill-health early retirement pension would depend on the severity of your illness. The Trustees will decide when a member is suffering from serious ill health and will take independent medical advice for this purpose when necessary.
If you do retire early due to serious ill-health and subsequently recover sufficiently to return to work, your pension may be adjusted to take account of any increase in your earnings.
If I continue to work for the Group after Normal Pension Date, will I continue to earn pension?
You can continue working beyond your Normal Pension Date. In this situation you can either draw your pension and continue working or defer taking your pension which will then be subject to late retirement increases. In addition it may be possible for you, at the discretion of the Group, to earn extra benefits. You would have to maintain your contributions. Further details will be provided to you if you are affected in this way.
The late retirement pension is calculated by increasing the pension payable at Normal Retirement Date (NRD) by a late retirement factor. The actual late retirement factor used is based on the factors in place at your NRD. The current factors are 6.5% for members with a Normal Retirement Age of 60, and 7% for members with a Normal Retirement Age of 65. Both are per annum figures and compound.
Can I draw my pension before Normal Pension Date and continue working?
Yes, but again this is subject to the consent of the Group and the Trustees. In addition you would have to opt out of the Willis Pension Scheme loosing valuable death benefits. It is not possible to accrue additional pension in the Willis Pension Scheme if you opt out to draw your pension early.
Cash sum at retirement
Can I take a cash lump sum at retirement ?
You are able to surrender part of your own pension for a cash sum up to the maximum allowed by the Inland Revenue. Under current Inland Revenue rules, this lump sum is paid tax free. The maximum amount of cash that you can take in this way is calculated in a very complicated manner, but broadly speaking it is based on one quarter of the value of all your pension benefits (including any AVCs you have made).
The rates at which pension is exchanged for cash are set by the Trustees, after taking the advice of the Scheme Actuary, and may vary from time to time. The amount of pension you will have to give up to take a cash sum will also depend on your age at retirement. Examples of the current factors can be obtained from the Group Pensions team, Friars Street, Ipswich.
Key notes:
•
Your pension from the Scheme cannot be less than your contracted out rights (
Click here for further details). Therefore, the amount of cash you can take may have to be restricted to ensure that your pension does not fall below this level.
• If you take cash, you will only be surrendering part of your own pension. The pension paid to your widow/widower on your death after retirement will not be affected by any cash taken.
