Special Benefits for Long Standing Members
Special benefits for long-standing members
The Pension Scheme has a long history during which the benefits structure has changed from time to time. In particular a major change took place on 6 April 1988 with the consolidation of the following schemes:
- Willis Faber Pension and Life Assurance Scheme
- Willis Faber Senior Pension Scheme
- Stewart Wrightson Pension Fund
Members of these Schemes were automatically transferred to the Willis Pension Scheme. However certain special benefits apply under the Scheme to reflect the pension rights accrued by service prior to 6 April 1988 provided by the former schemes. There are three differences for former Willis Faber members, two differences for former Stewart Wrightson members as described in this section and one difference in relation to a change in
Normal Pension Date which may apply to both groups.
Benefits for former Willis Faber members
Difference One - SERPS Offset
The Scheme is contracted-out of the second tier of State pension as described
here. By contrast the former Willis Faber schemes were contracted-in from 6 April 1978 until 5 April 1988 (during which period the second tier was known as the State Earnings Related Pension Scheme or SERPS).
To take account of the additional National Insurance contributions paid by the Company to secure the additional State benefit, a SERPS Offset will be deducted from your pension in respect of this period of service.
The Offset is calculated as an amount equal to 0.5 per cent of your
Base Salary between the Lower and Upper Earnings Limits (LEL and UEL) for National Insurance Contributions at the date of leaving service, for each complete year of
Pensionable Service between 6 April 1978 and 5 April 1988.
For the 2018/19 year LEL is £6,032 and UEL is £46,350. Therefore the maximum SERPS offset is £2,015.90 calculated as 0.5 per cent x 10 (maximum service) x (£46,350 (UEL) - £6,032 (LEL)).
Difference Two - Accelerated Units
In the former Willis Faber schemes a special form of Additional Voluntary Contribution facility was made available known as Accelerated Units. This facility allowed members to increase their
Target Percentage by entering into a long-term agreement to pay an additional contribution. Members using this facility have been advised individually of the
Accelerated Units that are being purchased and any changes required on the grounds of equal treatment. The facility was closed to new entrants with effect from 31 December 1989 alongside the introduction of the current AVC.
Difference Three - Pre-consolidation Benefits
Prior to 6 April 1988 the former Willis Faber pension schemes provided benefits at the rate of 60ths for each year of service. Accordingly for a
Pre’95 Member a who was also a member of the former Willis Faber pension schemes the
Target Percentage is calculated in two steps as follows:
In addition a special benefit applies on leaving the Scheme early to protect the pension earned by service prior to the consolidation. Section 10.2 of the members booklet explains how the
Target Percentage is reduced by the ratio of completed to total potential
Pensionable Service. For a Willis Faber member the ratio is based on actual and potential service after 6 April 1988 and it will only apply to the benefit (including any Accelerated Units) earned by service after 6 April 1988.
Benefits for former Stewart Wrightson members
Difference One – Percentage Table
Prior to 1 April 1984 the Stewart Wrightson Pension Fund calculated the
Target Percentage on the basis of a Percentage Table. This was designed to provide extra benefits for those who joined the Group late in their career and may have given up pensions with previous employers. A former Stewart Wrightson member who joined prior to 1 April 1984 and can complete more than 20 years of
Pensionable Service at
Normal Pension Date, has a
Target Percentage of 60% or the 50ths basis if greater.
Members have been advised individually of any changes to their
Target Percentage in relation to the table which arise from the equalisation of retirement ages.
Notes:
- Obsolete information has been removed from this table.
- Members have been advised individually of any changes to their Target Percentage in relation to this table which arise from the equalisation of retirement ages.
Difference Two - Special Early Retirement
If Willis Towers Watson consents, former Stewart Wrightson members may retire early without the application of any reduction factors once they have completed 40 years
Pensionable Service. Under this option you must give at least 12 months' notice of your intention to retire. Females can retire from age 55 under this option. Males can also retire from age 55 in line with their female counterparts, however if they are retiring before age 60, then the proportion of their benefits earned by service before 17 May 1990 (from when equal treatment is required) will be reduced for early payment.
Benefits in relation to equal retirement ages
- From 6 April 1988 the Normal Pension Date was set at 65 for everyone who joined the Group after that date.
- From 1 May 1992 Normal Pension Date was increased to 65 for all members of the Scheme irrespective of their joining date. They were given a guarantee that the pension would never be less than the amount payable if they had left service on 1 May 1992.
With effect from 1 January 2002 this guarantee has been replaced by a right under the Rules of the Pension Scheme to receive a proportion of the benefits from age 60 without a reduction for early payment. The benefits concerned are:
- for female members, those earned by pensionable service prior to 1 May 1992
- for male members, those earned by pensionable service between 17 May 1990 and 1 May 1992.
For example a female member aged 58 with 20 years service split evenly before and after 1 May 1992 would have half the pension reduced for two years early payment and the other half reduced for seven years early payment. If the member were male pension earned by one year and 11 months service (17 May 1990 to 1 May 1992) would be reduced for two years early payment with the balance (pension earned by 18 years 1 month service) reduced for seven years early payment.
The significance of 17 May 1990 is that this was the date of a leading judgement of the European Court of Justice (known as the Barber case) from when
Normal Pension Date is to be equalised. It applies only to male members because the benefits earned by female members up to the effective date of the changes are protected.
Please note that these rights in relation to equal retirement ages do not apply to Senior Members for whom the
Normal Pension Date has always been equal between men and women.
