The ExxonMobil Pension Plan
For your future
UK member guide
The ExxonMobil Pension Plan is a valuable benefit.
It’s one of just a handful of final salary pension
schemes in the UK that still let members build up
benefits. So that you can get the most from it, we
want you to know how the Plan works and how
your pension will be calculated when you retire.
Pensions can seem complicated, so this guide
explains the main benefits of the Plan, as well as
telling you more about how it’s run and where to
get more information. There’s also a jargon buster
at the back that explains the pensions terms we
sometimes have to use.
Every year we send you a statement that shows
your own benefits in the Plan. And there’s an
online pensions administration site, ePA, where
you get retirement quotes, change your AVCs,
tell us who you would like to receive your life
assurance lump sum and check your personal
details whenever you want.
If you joined the Plan before 6 April 2006…
There’s additional information on page 24 that explains changes we made to the
Plan that affect you.
There’s also information for Heritage Mobil employees who were members of the
Mobil Plan and transferred into the Plan following the merger between Exxon
and Mobil.
Welcome
2
02 Welcome
05 The main benefits
06 Membership of the plan
Who can be a member?
Can I opt out?
Can I rejoin?
ePA
07 Contributing to the Plan
How much is the SMART adjustment or
contribution?
Working part-time
Is shift pay included?
How much does the Company pay?
Boost your benefits
Can I transfer in benefits from another
pension plan?
Annual Allowance
10 Retirement benefits
When can I take my pension?
Retiring at 65
Retiring before your State Pension Age
Retiring early
Medical retirement
How is my pension paid?
Will my pension increase?
Taking part of your benefits as cash
How much pension will I have to give up?
If I pay AVCs, can I take these as a lump sum?
15 State pensions
State Pension Age
Basic State Pension
Single-tier pension
State Pension statement
Want to know more?
17 Death benefits
If you die while still working for the Company
Who’s eligible to get my death benefits?
If you die after you’ve retired
If you die after leaving the Company but
before you retire
20 Leaving the Company
or the Plan
Leaving the Company
Leaving the Plan
23 Periods of absence
Statutory leave
Career breaks
Illness or injury
What if I don’t return to work?
24 Additional information
For members who joined before
6 April 2006
For Heritage Mobil employees
25 General information
The Trustee
How the Plan is financed
How the Plan is run
Plan changes
Divorce or dissolution of a civil partnership
Disputes
Data protection
29 Useful contacts
30 Pension terms explained
Contents
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The main benefits
It doesn’t cost
as much as
you’d think
Benefits
at retirement
Benefits while
you’re working
Manageable level of
contributions
Your SMART adjustment or
contributions start with a
minimum of just 1.5% of
annual pensionable salary
up to £30,000 and 6.5%
thereafter.
Choose when to take
your benefits
Normal retirement date is
your 65th birthday but you
can take your benefits from
age 55 (although they would
be reduced).
Your benefits grow
every year
Each year you are a
member of the Plan,
your pension increases.
The Company saves the
rest for you
The Company pays the
difference between your
SMART adjustment or
contributions and what’s
needed to cover the cost of
your benefits. The SMART
adjustment is paid by the
Company into the Plan.
A pension for life
When you retire you get a
pension that’s paid for the
rest of your life. And it
usually increases every year.
Life assurance
A lump sum of three times
your pensionable salary for
your dependants if you die
as an employee.
They may also get
a pension.
Tax relief and NI savings
Your SMART adjustment
gives you tax relief and it
reduces your National
Insurance charge. If you do
not use SMART pensions but
instead make a contribution,
tax relief is available but
there is no reduction in your
National Insurance charge.
Tax-free lump sum
You can give up some of
your pension for a tax-free
lump sum.
Ill-health pension
If you can’t work long-term
or permanently, because of
illness or an accident, your
pension may be paid
immediately.
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Who can be a member?
If you’re an eligible, regular or fixed-term
employee of:
• Esso Petroleum Company, Limited*
• ExxonMobil Chemical Limited*
• International Marine Transportation Limited*
you are automatically put into the Plan as part of
your contract of employment.
*Referred to as the Company throughout this Guide.
Employees on a formal career break can join the
Plan during their periods of temporary service.
Can I opt out?
You can opt out within one (calendar) month of
joining and you will receive a refund of any
contributions you’ve paid or the SMART pension
adjustment. Please consider this decision carefully
as you would be giving up valuable benefits, not only
for you but for your dependants too.
The Company, Trustee and administrators can’t
give you advice about this decision. You must
decide whether opting out or rejoining the
Plan is right for you.
If you opt out you will be automatically enrolled
every three years and can choose to opt out
again if you wish.
Can I rejoin?
If you opt out, you cannot rejoin the Plan, other
than in exceptional circumstances, until the
anniversary of the Company auto-enrolment staging
date. If you’re eligible and want to rejoin
the Plan after opting out, contact HR Direct.
Please note: if you opt out you can’t ‘buy back’
any missed service.
ePA
As a member of the Plan you have access to the
information we hold about you, as well as the ability
to produce calculations for future benefits and
update your nominations for death benefits online.
As a new joiner, you will be sent a letter explaining
how to log on to ePA for the first time. At the first
log in you will be asked to accept the site’s terms
and conditions and set a new password that is
personal to you.
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Remind
Membership of the Plan
66
Saving in the Plan
doesn’t cost as much as
you might think, using
SMART adjustment means
you get tax relief and
National Insurance
savings automatically.
How much is the SMART
adjustment or contribution?
All members must adjust pensionable salary,
via SMART pensions (SMART adjustment),
or contribute equivalently, according to the scale
below (subject to a minimum of 1.5% of their
pensionable salary):
• 0% on first £3,800 of pensionable salary
• 1.7% on the next £26,200
• 6.5% on everything above £30,000
Regular
Contributing to the Plan
SMART is a way of contributing which allows you
to reduce your before-tax salary by the amount of
your annual pension contributions. The Company
will pay both yours and its contributions and you
will pay lower NI on your remaining salary.
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Greg earns £40,000 a year,
without overtime or
allowances, so his
pensionable salary is
£40,000.
As members don’t SMART
adjust or pay contributions
on the first £3,800 of their
pay and 1.7% for the next
£26,200, Greg’s monthly
SMART adjustment or
contribution would be
just over £91
a month
- 2.7% of his
pensionable salary.
And it’s taken from his pay
before tax.
Greg
Chloe earned £32,000 in
one particular year, which
included overtime of
£2,000. As this included
overtime of £2,000, her
pensionable salary is
£30,000.
Because she won’t SMART
adjust or pay contributions
on the first £3,800 of her
pay and only 1.7% on
the rest, her monthly
SMART adjustment or
contribution is
just over £37
- 1.48% of her
pensionable salary.
But because members must
SMART adjust or contribute
at least 1.5%, her annual
SMART adjustment or
contribution is
£37.50
a month.
Chloe
Satish earns
£42,000,
which includes shift
pay of £8,000 that
is pensionable.
His monthly SMART
adjustment or
contributions is
£102
a month
- 2.9% of his
pensionable salary.
Satish
Bev earns
£55,000
a year
all of which counts as
pensionable salary.
Her monthly SMART
adjustment or
contribution is
£172
a month
- 3.76% of her
pensionable salary.
Bev
Here are some examples of how SMART adjustment or
contributions are worked out for members on different
levels of pensionable salary:
Saving in the Plan won’t cost as
much as you think:
• You get tax relief on your SMART adjustment or
contributions at your highest rate of tax:
• if your highest tax rate is 20%, each £1 only costs you
80 pence
• if your highest tax rate is 40%, each £1 only costs you
60 pence
• If you SMART adjust your pay, your National Insurance is
lower than if you are paying contributions from salary.
Contributing to the Plan
8
Working part-time
The pensionable salary bands on which SMART
adjustments and contributions are calculated are
converted to part-time equivalents. You will pay
the same percentage SMART adjustment or
contribution, just of a lower amount.
Your benefits are based on your full-time equivalent
pay before SMART adjustment but your pensionable
service is adjusted to reflect your reduced hours.
Jenny works 35 hours per week and has
worked for the company for 20 years,
She successfully applies for flexible working and
her hours are reduced to 28 hours per week.
Each year going forward her pensionable
service will increase by 0.8 of a year. If she retires
whilst still working part time after a further 10
years, her pension will be calculated using
service of 28 years (20 years full time + 10 x 0.8
part time)
Is shift pay included?
Many members work shifts for part of their careers.
To make sure it is included in your pension, we
calculate an average of your shift pay and spread
it over your working life.
For example, if shift pay represented 10% of your
pay averaged over your whole career, your
pensionable salary would be uplifted by 10%,
whether or not you’re working on shift when
you retire.
Martin has been in the Plan for 20 years. He worked
shift in the first 10 years with shift pay at 20% of
base pay each year. During his second 10 years he
didn’t work shift. When he retires his shift pay is
averaged over all of his service.
Step 1: Add together all percentages of shift pay
for each year (and month) on shift. 10 years of
shift X 20% of base pay gives a total of 200%.
Step 2: Divide this by the total number of years (and
months) in the plan (20 years) 200% ÷ 20 = 10%.
Therefore his final 12 month’s pensionable
salary would be uplifted by 10% when calculating
his benefits.
How much does the
Company pay?
The Company pays a share of the contributions
needed to cover the cost of the benefits, and its
contributions will change from time to time, at a rate
agreed with the Trustee on the advice of the Plan’s
actuary. In recent years, it has contributed around
30% of pay, and made special contributions on top
of that.
Boost your benefits
The more you save, the bigger your benefits
are likely to be. You can pay up to 25% of your
pensionable pay into the Plan as Additional
Voluntary Contributions (AVCs). To find out how
AVCs work with the Plan benefits, see the
Boost your benefits – AVC factsheet.
Can I transfer in benefits
from another pension plan?
You can’t automatically transfer in benefits but
you can ask the Trustee to consider it by asking the
Administrator for a transfer-in quotation. They will
tell you how much additional service the transfer
will buy in the Plan so you can decide whether to
request a transfer.
The Administrator can’t advise you on transferring
in benefits from other company or personal pension
plans so we recommend that you take independent
financial advice. We tell you how to find a local
Independent Financial Advisor (IFA) on page 29.
The Trustee may require you to take advice before
considering a transfer in request.
If you save into another pension plan while
contributing to our Plan, these benefits cannot
be transferred into our Plan.
Annual Allowance
You can contribute to pension arrangements, as
well as to our Plan, but there are some potentially
relevant tax restrictions. Read our leaflet about the
Annual Allowance to find out what the limits are.
Contributing to the Plan
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Receive
Retirement benefits
As a member of the Plan, you’re building up valuable benefits
for when you retire. These benefits are linked to your earnings
and how long you’ve been a member.
When can I take my pension?
The Plan’s normal retirement date is your 65th
birthday. But you could take your pension before
or after then.
You may also be able to take your pension if you have
to retire early because of ill-health or an accident.
Retirement is a big change
To help you prepare for life after work, the
Company runs regular pre-retirement courses
you can attend when you’re approaching the
Plan’s normal retirement date or your chosen
retirement date. The course covers making the
transition from work to retirement, as well as
financial planning support. Details of course
dates can be accessed on the UK HR intranet.
1010
A - B = Your Pension
If you retired at 65 with 19½ years’ service and the last
12 months’ pensionable salary of £35,000, your pension would be:
Retiring at 65
Let’s look at how your pension is worked out if you want to retire at 65 (or later if you continue working and
stay in the Plan):
Some circumstances, such as an exceptional
increase in pensionable salary may cause the
amount of pension you build up in any one year to
be capped due to having reached the HMRC
standard Annual Allowance of £40,000 per tax year
after taking into account any unused Annual
Allowance from the previous 3 years. To find out
more see the Annual Allowance factsheet. If your
pension benefit is capped when you are ready to
take it, the Company will currently make up the
difference between the capped and uncapped
benefit from its own resources.
1.85% £647.50 £12,62619.5
x x
= =
The accrual
rate
Step 1
Step 3
Step 2
Your last 12 months’
pensionable pay
Your pensionable
service*
£35,000
£8,094 £231.26 £4,510
£8,116
19.5
÷ x
= =
-
New
State Pension
State Pension Offset
* This figure could include additional service, arising from a transfer into the Plan, for example.
† The State Pension deduction is called the ‘State Pension Offset’ , the maximum State Pension Offset is the
value of the New State Pension.
†
Your pensionable
service*
35
A
B
Did you join before 1 January 1989?
If you are a woman your position was
safeguarded when the Plan’s retirement
age changed. For men this was not
as comprehensive.
Did you join before 6 April 2016?
If so the State Pension Offset is calculated as follows:
(1/49 X Basic State Pension X years of Pensionable
Service up to 5 April 2016)
(1/35 X New State Pension X years of Pensionable
Service from 6 April 2016)
Retirement benefits
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The Plan gives you and your beneficiaries valuable
benefits based on the last 12 months of your
pensionable salary, but you may find when you come
to retire that you’d like more flexibility in how you
receive those benefits.
From April 2015, members of defined contribution
pension plans, such as personal pension plans or the
AVC scheme, aged over 55 can take all of their
defined contribution pension savings as cash.
However, unless taken as part of the tax-free cash
from the Plan, you would receive 25% tax free and
pay tax on the remaining 75% lump sum payment at
your marginal rate.
It is possible to take just one AVC cash withdrawal
after age 55 and leave the remainder in the Plan
until retirement.
After the first cash withdrawal no new AVC savings
can be paid into the Plan, although you can continue
to make savings outside of the Plan into a personal
pension plan.
You do have the option to transfer your benefits,
both AVC and Plan benefits, out of the Plan to a
personal pension plan or other defined contribution
pension plan. However, you must have received
independent financial advice from a regulated
Independent Financial Adviser (IFA) before you apply
to transfer your pension out of the Plan.
Partial Transfer Out at
Retirement
At the point of retirement you are able to transfer a
portion of your defined benefit pension to a defined
contribution plan (Partial Transfer). This will enable
you to utilise some defined contribution freedoms in
retirement whilst retaining a base regular pension
income from the Plan.
Retiring before your State
Pension Age
A Temporary Early Retirement Allowance is
paid if you retire before your State Pension Age.
This allowance is equal to the State Pension Offset
applied to your pension as part of the calculation of
your benefit.
When you get to your State Pension Age, the
Temporary Early Retirement Allowance stops, as you
will be eligible to receive your State Pension. The
allowance is included when calculating how much of
the Annual Allowance and the Lifetime Allowance
you have used.
Retiring early
You can retire at any time from your 55th birthday,
but your pension will be reduced, depending on
your age, because it’s likely to be paid for longer:
Age 60+
You would need to give the Company one month’s
written notice of your plans, so that there is time
to replace you or to reallocate your work.
Your pension won’t be reduced. It will be based on
your last 12 months’ pensionable salary and your
actual pensionable service.
Age 55 – 59
You would need to give the Company three months’
written notice of your plans, so that there is time to
replace you or to reallocate your work.
Your pension will be based on your last 12 months’
pensionable salary and pensionable service up to
when you retire. It is then reduced by a ‘discount’,
depending on your age in years and months.
Current standard early retirement discounts for
members in employment are listed here.
Retirement age Discount
59 -5%
58 -10%
57 -15%
56 -20%
55 -25%
Please note: you could give less than three months’
notice between 55 and 60 but your pension will be
reduced by higher discounts. You can find out more
from the Administrator, but here is an indication of
the kind of discounts you could incur:
• 6% discount at age 59
• 30% discount at age 55
If you leave the Company before 55, your benefits
will stay in the Plan as a deferred pension until you
retire. However, if you joined the plan before 6 April
2006 you can take your pension, with a reduction
for early payment, from age 50.
Retirement benefits
1212
If I retire early, when will I get my
State pension?
You won’t get your State Pension until you reach
State Pension Age. But the Plan will pay you a
Temporary Early Retirement Allowance until your
State Pension can be paid. You can see how the
allowance is worked out above.
If I retire early, can I still have a tax
free cash lump sum?
Yes, and you can read about how this is worked
out below.
Medical retirement
If you can’t work at any age, because of illness or
an accident, the Company can ask the Trustee to
consider if you are eligible to receive an immediate
pension based on total or partial disability. You must
have two years’ service to be considered. Further
information is available from HR Direct and the
Medical retirement factsheet.
How is my pension paid?
Your pension will be paid every month in advance.
Income tax will be deducted before it is paid.
Please make sure the Administrator has your bank
account details, as well as your home address and
email (if you have one), in case they need to contact
you about your pension.
If you want your pension paid to an overseas bank
account, an administration charge will be deducted
from each pension payment to cover costs.
You will also be required to participate in an annual
‘Proof of Life’ exercise if you are paid or live outside
the UK, or if the bank account into which your
pension is paid is not in your own name.
Will my pension increase?
Pension built up after 6 April 1997
This part of the pension will automatically increase
by Limited Price Indexation (LPI) each April after you
retire. The increase will be in line with the annual
percentage change in the Retail Prices Index (RPI),
up to a maximum of 5% for service up until 5 April
2006 and 2.5% for service after that.
Pension built up before 6 April 1997
The way this part of the pension increases is
worked out differently. This is because, in general,
only a portion of this gets statutory increases.
See page 24 for details.
In addition to statutory increases, which are laid
down by law, the Company may, at its discretion,
pay further increases.
Taking part of your benefits
as cash
You can exchange part of your pension at retirement
for a tax-free lump sum, subject to HMRC limits.
The most you can currently take tax-free is around
25% of the HMRC value of your benefits, so long as
you don’t exceed the lifetime limit on the capital
value of benefits, called the Lifetime Allowance.
Taking part of your benefits as cash is sometimes
called ‘commuting’ your pension or ‘commutation’.
How much pension will I
have to give up?
The amount of pension you give up for the lump
sum depends on your age, gender, and when you
completed your pensionable service. The factors
used reference these aspects and are also updated
for market conditions monthly. For example with a
factor of 18 and a pension of £20,000 pa, if the
member chooses to exchange (commute) 25% of
their pension then they will receive a pension of
£15,000 pa and a cash lump sum of £90,000.
If I pay AVCs, can I take these
as a lump sum?
Your AVC fund is a type of defined contribution plan
and as such you have the freedom to take your
pension savings in one of several ways:
• Use the AVC funds towards your tax-free cash
when drawing main Plan benefits.
• Receive one lump sum cash payment, 25%
of which would be paid tax-free and the rest
at your marginal rate.
• Use the AVC fund to buy an annuity (an income
for life).
• Transfer your AVC fund out of the Plan.
To find out more please see our factsheet:
Boost your benefits
Retirement benefits
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State pensions
You will get your State pension when you reach
State Pension Age. In April 2016 a single-tier pension was
introduced replacing the previous two parts making up
the State pension.
State Pension Age
This is when you can start to take the Basic State
Pension. It is currently 65 for men and increasing to
65 for women by October 2018.
State Pension Age will gradually increase from
65 to 66 towards the end of 2018 onwards to
late 2020.
And then between 2026 and 2028, it will gradually
increase to 67. In future it will rise in line with
improvements in how long people typically live.
You can check your State Pension Age at
www.gov.uk/calculate-state-pension
State Pension
You will get this as long as you have paid enough
National Insurance contributions. This is paid by
government directly to you and is separate from
the Plan provision.
Single-tier pension
From April 2016, the State Pension changed to a
new single-tier State Pension and the Plan will no
longer be contracted out of the State system. If you
have pensionable service before 5th April 2016 you
will have earned an amount towards the Basic State
Pension. This will be taken into account as part of
the ‘foundation amount’ of pension from the state
calculated as at 5th April 2016. From 6th April 2016
you will build up further State Pension under the
single-tier State Pension system.
State Pension statement
The State Pension Forecasting Team can tell you,
in today’s money, how much State Pension you’ve
earned already and how much you can expect at
State Pension Age. You can get a statement
online at:
www.gov.uk/check-state-pension
or by contacting the team at:
Future Pension Centre
The Pension Service 9
Mail Handling Site A
Wolverhampton
WV98 1LU
Tel: 0345 300 0168
Want to know more?
You can find out more about State Pensions at
www.gov.uk/new-state-pension
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Death benefits
As well as providing valuable retirement benefits for you,
the Plan also provides financial security for your
dependants when you die.
If you die while still working
for the Company
Cash lump sum
A lump sum of three times your pensionable salary
at the time of your death will be paid if you die in
service. It will be paid tax-free as long as it doesn’t
exceed the Lifetime Allowance.
The Trustee has discretion to decide who receives
your death benefit lump sum. However, if you leave
an eligible spouse, civil partner and/or dependant
children, they will normally receive your death
benefit automatically. If you want the Trustee to
consider others it’s really important to let them know
your wishes by completing an expression of wish
form and returning it to the Administrator.
You can tell us who you would like to receive your
death benefit on ePA www.epa.towerswatson.com/
doc/XOM/login.htm or download an expression of
wish form from the HR intranet, complete it and
return it to the Administrator.
Please note: If you pay AVCs, you need to complete
a separate AVC expression of wish form to tell the
Trustee who you would like your AVCs to be paid to.
If you don’t complete an AVC expression of wish
form, your AVCs will be paid to your personal
representatives. If you die before age 75 your
dependants or personal representatives will be able
to withdraw the full value of your fund without
paying tax.
Spouse’s or civil partner’s pension
If you have an eligible spouse or eligible civil partner,
they will get a pension of 50% of your projected
pension. This will be based on your pensionable
salary when you died and the pensionable service
you would have had until normal retirement date.
Their pension is paid for life from the date you die,
regardless of whether they remarry or register
a new civil partnership.
If you die leaving no spouse/civil partner, children or dependants,
a cash lump sum equal to all of your SMART adjustments and own
contributions, plus 3% a year interest, will be paid at the Trustee’s
discretion to your estate.
Children’s pensions
Each eligible child you have will get a pension of
10% of your projected pension. If a spouse’s or civil
partner’s pension is not being paid, your children’s
pensions are doubled. The maximum total children’s
pension is 50% of your projected pension if a
spouse’s or civil partner’s pension is being paid, and
100% if not. Your children and/or spouse cannot
receive more than 100% of your pension in total.
This restricts the number of child beneficiaries to
5 children. If there are more than 5 children, the
children’s pension is divided equally between them.
You can find the eligibility for children’s pension on
page 18.
Here’s an example:
Bill dies while working for the Company.
His projected pension would have been
£8,760, so his widow would get a pension of
£4,380 (50% x £8,760).
He had three eligible children, so they would
each get a pension of £876 (10% x £8,760).
Bill’s pensionable pay was £25,000 so his
lump sum death benefit would be £75,000
(3 x £25,000).
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Who’s eligible to get my
death benefits?
Spouse or civil partner
You must be legally married or have a legally
registered civil partnership. A ‘common-law spouse/
partner ‘ won’t qualify automatically. And:
• You must be living together when you die.
• If you marry after leaving the Company (or after
normal retirement date, if you left the Company
with a deferred pension), your spouse or legally
registered civil partner only qualifies for benefits
after six months of marriage/civil partnership.
• A spouse or registered civil partner may be
eligible for benefits in other circumstances,
if they satisfy the contracting-out regulations.
You should contact the Administrator for
more details.
Children
Your child must be:
• born or conceived before you terminate your
active membership of the Plan and adopted
or stepchildren must also have become yours
before this point, and
• either living with or receiving substantial financial
support from you when you die, and
• under 18, or under 23 if in full-time education or
training when you die.
Anyone else?
If you don’t leave a spouse, civil partner or children
the Trustee may, at its discretion, award a
dependant’s pension. The Plan rules state that the
Trustee has to be satisfied that the person being
considered was financially dependent on you when
you died. For example, this could be if you and your
partner are not married and they can’t provide for
their own financial security.
If you want to check if someone can be considered
a dependant, please contact the Administrator. The
Trustee will base its opinion on your current situation
but this will not be binding because the final decision
will be based on the circumstances when you die.
What if my dependants don’t qualify for
a pension?
You may feel responsible for people who do not
meet the Plan eligibility or dependency rules and
so are not eligible to receive a pension. If you are an
employee, you may consider using the expression of
wish form to nominate them for a death in service
benefit payment, otherwise you should consider
alternative provision from your own resources.
If you die after you’ve retired
Spouse’s or civil partner’s pension
If you die after you’ve retired, the Plan will still
provide financial support for your family (see the
eligibility criteria). Your eligible spouse or civil partner
will get 50% of your full pension before any discount
for early retirement (see page 12) or any pension you
gave up for a lump sum (see page 13), but it won’t
include any Temporary Early Retirement Allowance.
If your spouse or civil partner is 20 or more
years younger than you, the Trustee will reduce
their pension.
Cash lump sum
In most cases, if you die after normal retirement age
and before your 75th birthday, a cash lump sum of
two months’ worth of your pension will be paid.
This will include the pension you gave up for a cash
lump sum at retirement and will be between £600
and £2,500.
However, if you die within five years of retirement
and before age 75, a bigger lump sum benefit may
be paid:
five years’ pension
(at the date you died)
The total of all pension payments
you received before you died
The total due to your spouse/dependant
until the end of the 5 years*
–
–
*Calculated at the rate of pension immediately after
you died.
Death benefits
1818
The lump sum can be paid tax-free, as long as the
Trustee has the final say on who gets the money.
This would normally be your spouse, civil partner
or children. If you have no eligible beneficiary, the
Trustee may pay it to someone else. If there is more
than one beneficiary, the Trustee will decide who
gets the benefit and in what proportions.
If you paid AVCs
If you used all of your AVCs to provide a lump sum
at retirement or bought an annuity (income for life)
then no further AVC benefits would be paid if you
die. If you didn’t use all of your AVCs, a check is done
to see whether there’s any money left in your AVC
account after all payments made to you have been
deducted (including the cost of providing a
dependant’s pension if you requested this). Any
money left would be paid as a lump sum, taking
into account your wishes, or to your personal
representatives.. If you die before age 75 any
remaining AVC funds would be paid to your
dependants or estate free of tax.
What if a pension payment is made after
I die?
Your Plan pension stops when you die, although it
will be paid for the rest of that month. If we receive
notification of your death too late, or if extra pension
payments are made for any other reason, the
Administrator must recover the overpayment.
This is a legal requirement.
If you die after leaving
the Company but before
you retire
No death benefit cash lump sum is paid if you’re
under 65 and have a deferred pension, whether
you’ve started to take it or not. If you’re over 65
when you die, a lump sum equal to two months’
pension is paid (as explained on page 18).
Your spouse or civil partner will get 50% of your
pension. A dependant’s pension or children’s
pensions may also be paid. If you die before taking
your pension and don’t leave a spouse, civil partner,
eligible children or dependants, a cash sum equal to
your SMART adjustments and own contributions,
plus interest up to the date of your death may be
paid to your personal representatives.
Pension overpayments
It’s illegal to continue to take the pension of a
member who has died. The Trustee has to act in the
best interests of all members, protect their benefits
and guard against the funds being taken illegally.
People can be prosecuted if they defraud the Plan
by claiming benefits that are not due
to them.
Proof of life
It’s important that the Administrator is notified as soon as
possible if a Plan pensioner dies, so that any dependants’
benefits can be paid and pension overpayments avoided.
By law, the Trustee has to make sure that payments are only
made to eligible beneficiaries. Pensioners may be asked to
complete a ‘Proof of Life’ certificate, which needs to be signed
by an independent and responsible third party or to comply
with other identification requirements.
The request will be sent to your last known address and, if it
isn’t returned, pension payments will be suspended. So you
must let the Administrator know if you change your address.
Pensioners may also be required to register with an overseas
agent in person.
If payments are made to overseas bank accounts, or if the
pensioner lives overseas, a ‘Proof of Life’ certificate is
requested annually.
Death benefits
19www.exxonmobilpensions.com 19www.exxonmobilpensions.com
Leaving the Company
If you leave the Company, you will have to leave the
Plan. You will be classed as an ‘early leaver’ unless
you take your pension immediately.
What happens to my pension?
That depends on how long you’ve been a member
of the Plan.
If you opt out of the Plan after being
automatically enrolled
You must complete a valid opt-out notice within one
month of joining the Plan or receiving the automatic
enrolment information. Your SMART adjustment or
contribution will be returned and you will be treated
as never having been a member.
If you leave with less than three months’
qualifying service
As you won’t have had enough service to build up a
Plan pension, you’ll receive a refund of the SMART
adjustment or contribution.
If you leave with more than three months’
but less than two years’ qualifying service
You won’t have had enough service to build up a
Plan pension, but you will have a choice of either:
• Using the money you’ve contributed to the Plan
to buy you back into the State Second Pension
for the period of service prior to 6th April 2016.
The cost of doing this will usually be more than
the amount you’ve paid into the Plan (but you
won’t have to pay any more money). For the
SMART adjustment or contributions you made
for the period of service after 6th April 2016
you’ll receive a refund of the SMART adjustment
or contribution.
OR
• Transferring a Cash Equivalent Transfer Value
to another pension scheme, for example an
insurance company or other organisation that
can receive transfers in. The way the transfer
value is calculated is legally defined.
You have to notify the Administrator of your
choice within three months of leaving the Company.
If you don’t, the Trustee will buy you back into the
State Second Pension for the pensionable service
period before 6th April 2016 and will refund your
SMART adjustment or contribution for the service
after this date.
If you leave after two or more years’
qualifying service
You will be entitled to a pension at your normal
retirement date. It will be based on your last 12
months’ pensionable salary and pensionable service
when you leave the Plan, and then increased each
year to take account of inflation. This is called a
deferred (or preserved) pension. You can take this
when you reach 65, or 60 if you left after 23 March
1997, without any reduction. You can take your
pension earlier but it may be reduced. You can find
out more about early retirement reductions from the
Administrator. The reductions vary from time to time,
but for leavers after 1 December 2006 it is currently
6% a year for each year of retirement between
55 and 60. The Temporary Early Retirement
Allowance will be paid if you take your pension
before State Pension Age – this would also be
reduced for early payment.
How does a deferred pension increase?
Your deferred pension will be increased each year
between the date you leave and when you start
taking it. The rules for calculating deferred pension
increases have changed a few times, and the
prevailing rules at the time apply to pensionable
service built up during these previous periods.
Leaving the Company
or the Plan
Your options on leaving vary depending on
your circumstances.
2020
If you joined the Plan after 6 April 2009 your
deferred pension increases each year between the
date you left and your retirement date by the lower
of 2.5% or the percentage rise in the Consumer
Prices Index (CPI). Different increases apply to any
pension earned from other periods of service
including the Guaranteed Minimum Pension element
of your pension; for more information see page 24.
If you joined before that, you can find more
information on page 24.
Can I transfer my benefits into another
pension plan?
Yes, as long as the new plan is a registered pension
arrangement and willing to accept the transfer
payment. Or you can transfer the value of your
benefits to a personal pension or another form
of insurance policy called a ‘buy-out’ policy.
There are risks involved so you should take
regulated independent financial advice.
If you are planning to transfer your Plan benefits to
a personal pension or other defined contribution
arrangement the Trustee will need confirmation that
you have received regulated independent financial
advice before you will be able to proceed with
a transfer.
The amount that would be transferred is the value
of your deferred pension; that is, an estimate of how
much money the Trustee would have to set aside
now to pay your deferred pension when you retire.
You can get a transfer value quotation, free of
charge, once a year from the Administrator.
This would be guaranteed for three months
and is called a Cash Equivalent Transfer Value.
Please note: The figure quoted might not buy you
the same amount of pension with another pension
plan provider. The new provider will tell you what
benefits can be bought with the money and it’s then
up to you to decide whether to go ahead with the
transfer. You have the option to transfer out your
benefits up to normal retirement date, or your
chosen retirement date if this is earlier or later.
Leaving the Plan
Can I leave the Plan without leaving
the Company?
You can leave the Plan at any time, even if you’re still
working for the Company. If you’re considering this
option, you should take regulated independent
financial advice and contact HR Direct before leaving
the Plan. You will still be covered for the lump sum
death benefit, but not for any other benefits.
Keep your details
up to date
After you leave the Company, it’s your
responsibility to make sure we have your correct
personal details, for example your address or
bank details, or tell us if there
is a change to your personal circumstances.
You can update your details in ePA, alternatively
you need to let us know in writing; details can’t
be changed over the phone or by email.
Please quote your Employee Reference number
and/or pension number, as it will help the
Administrator to trace your records.
Leaving the Company or the Plan
21www.exxonmobilpensions.com 21www.exxonmobilpensions.com
Periods of absence
Statutory leave (e.g.
maternity, adoption, shared
parental leave).
Please refer to
the relevant Guidelines.
If you return to work after your statutory leave,
you will have a SMART adjustment or start paying
contributions again as normal. Your paid statutory
leave will be treated as full pensionable service. Your
Smart adjustment is calculated on your total pay
received including statutory pay and your family pay
is then adjusted downwards. No adjustment is made
when you are only receiving statutory pay. If you also
want any period of unpaid leave to count as
pensionable, you can pay extra contributions;
however you must tell us you want to do this within
12 months of returning to work. If not, you won’t be
able to pay the extra contributions.
Career breaks
You may be able take a career break, in the
expectation that you return to work for periods
during the break and return permanently at the
end of it.
When you start a career break, you resign from the
Company and stop being a member of the Plan.
The benefits you have already built up can stay in the
Plan and become deferred. If you return for periods
of temporary or fixed-term employment, you can
re-join the Plan and make contributions during
each period of employment to build up
additional benefits.
When you come back to work permanently, you can
ask for all your periods of pensionable service to be
treated as continuous. This means that the benefits
for all your service will be based on your last 12
months’ pensionable salary. You must ask for this
within 12 months of coming back to work. If not,
you won’t be able to combine your service at a
later date.
You can ask for your service to be treated as
continuous each time you return to employment
during a career break. However, your deferred
benefit may be worth more, particularly if the job
you’re doing during your career break is paid less
than your pay when you started your career break.
Please note: If previous periods of service are not
treated as continuous you will have separate
tranches of pension from the Plan pre and post
career break. Pre career break a deferred benefit
based on service and your last 12 months’
pensionable salary up to the time the career break
was started this will increase in deferment as for a
standard leaver. Post career break a pension based
on service from the date you return to work and
rejoin the Plan and your last 12 months’ pensionable
salary at retirement or subsequently leaving the Plan.
Illness or injury
Your Plan membership will continue and your
absence counts as part of your pensionable service.
Your SMART adjustment or your pension
contributions are deducted from your Company
sickness benefit, unless you ask for them not to be.
If you go to zero pay, or choose to stop contributing
to the Plan during sickness absence, your service
will be counted as ‘days of non-contributory
service’. These don’t count as part of your
pensionable service.
What if I don’t return
to work?
You will be treated as having left the Company
when your pay stopped. Find out more on page 20.
23www.exxonmobilpensions.com 23www.exxonmobilpensions.com
Additional
information
For Members who joined
before 6 April 2006
This section describes changes made to the Plan
that affect you. If you have any questions, please
contact the Administrator.
Impact of Age Discrimination Regulations
from 1 December 2006
You can continue in employment after normal
retirement age and your Plan membership
will continue.
Change in tax and pension law from
6 April 2006
After 6 April 2006, you can contribute to as many
pension plans as you like while contributing to
the Plan.
Since 5 April 2010, by law you are no longer able to
take your pension before 55. However, if you joined
the Plan before 6 April 2006 you keep your right to
take your benefits from 50, subject to a reduction.
Contracting-out of the State Earnings
Related Pension Scheme (SERPS) in 1997
The rules for contracting-out of SERPS changed
in April 1997. For each year before that, and going
back to1978 when contracting-out started, you
have a Guaranteed Minimum Pension as part of your
Plan pension. This Guaranteed Minimum Pension is
roughly the same as the pension you would have
earned in SERPS during your Plan membership.
At age 65 for men and 60 for women, checks are
carried out to make sure that the level of your
pension meets the statutory requirements of the
Guaranteed Minimum Pension. Once you reach
age 65, if you’re a man, or 60 if you’re a woman,
the Guaranteed Minimum Pension element of your
pension may be increased each year. The Plan pays
the increases for the Guaranteed Minimum Pension
you have built up after April 1988.
The Company may also pay discretionary increases
on any pension above the Guaranteed Minimum
Pension. These would be awarded to pensions in
payment before you reach age 65 for men or 60
for women and would be applied to your entire
pre-April 1997 pension. After State Pension Age,
the Guaranteed Minimum Pension will receive
statutory increases only.
Equalisation legislation – 1994
A number of changes were made to the Plan from
1 August 1994 so that benefits for both men and
women were made equal, in line with European law.
For women who joined the Plan before 1 January
1989, one of the major changes was that the normal
retirement date is now their 65th birthday, the same
as for women who joined on or after 1 January
1989. All benefits built up before August 1994 are
protected; one example is that you still have the right
to retire from age 50.
The other major impact of equalisation legislation
affects you if you take your pension early. The
detailed calculations behind this equalisation are
included in the early retirement quotes you can
run from ePA.
Additional information for
Heritage Mobil employees
If you’re a Heritage Mobil employee who transferred
and joined the Plan, you’re entitled to benefits under
the Plan for your Mobil Pension and Dependants’
Benefit Plan (Mobil Plan) pensionable service before
your transfer date.
This transferred service includes any past Mobil
pensionable service and pensionable service
that was transferred into the Mobil Plan before
the merger.
Your benefits from the Plan will be calculated as
described in this guide and be based on both your
Mobil Plan and Plan pensionable service as if your
service was continuous.
You will also have protected benefits that relate
to your Mobil Plan pensionable service.
2424
Research
General information
This section gives general information about the Plan
and how it’s run.
This guide is only a summary of the Plan for active
members. If you’re unclear about anything, please
get in touch with the Administrator. Although they
can explain the Plan, they can’t give you advice.
If you need help making decisions about your
pension, we recommend that you get independent
financial advice.
The information in this Guide and other fact sheets is
based on current law and tax regulations, which will
be subject to change.
The legal documents that govern the Plan are the
Trust Deed and Rules. If there are any differences
between the information in this guide and the
Trust Deed and Rules, the Trust Deed and Rules
will override this guide. If you want a copy of the
Trust Deed and Rules, you can ask the Administrator
for a copy.
The Trustee
The Plan is run by a trustee company, ExxonMobil
Pension Trust Limited. There are six directors;
four are appointed by the Company and two are
nominated by Plan members. As well as looking
after the Plan’s assets, the Trustee must act in the
best interests of all members and beneficiaries,
in line with the Trust Deed and Rules.
25www.exxonmobilpensions.com 25www.exxonmobilpensions.com
How the Plan is financed
Contributions are paid into the fund managed by the
Trustee. This fund is separate from the finances of
the Company. The Trustee sets the investment policy
and objectives, and produces a Statement of
Funding and Investment Principles. The Trustee also
appoints external professional investment managers,
who are responsible for implementing the
investment policy.
The Company Treasurer’s department advises the
Trustee and manages the external managers on their
behalf. You can find more information about the
Plan’s finances in the Annual Report and Accounts,
and the valuation reports prepared for the Trustee by
the actuary. You can get a copy on ePA or from
the Administrator.
Every year, we send members an update on the Plan,
including a Summary Funding Statement.
How the Plan is run
The Trustee has a number of Service Agreements
for the administrative services needed to operate the
Plan. The benefits and payroll administrator keeps
all the records, calculates the pension benefits and
makes benefit payments. All regular pension
payments are made by the Administrator. The
Trustee Board, together with the Company Pensions
Manager agree how the Plan should be run and
checks that the Plan complies with all relevant codes
and guidance from the Pensions Regulator. Where
a Trustee discretion is to be exercised regarding
individual cases, the Trustee Board decides what
action to take. In some circumstances, as in medical
cases, the Trustee receives professional advice to
help this process.
Plan changes
The Company can change or even stop the Plan at
any time. However, by law, no changes to the Plan
can be made that will reduce the value of the
benefits members have already built up. The
Pensions Act 2004 requires the Company to consult
with members if major changes are proposed. If the
Plan ends, the Trustee will use the Plan’s assets to
provide members with their accrued benefits, as laid
down in the Trust Deed and Rules, in full if possible.
The funding arrangements for the Plan aim to make
sure that the value of the assets will be enough to
pay pensions currently in payment and the pensions
members have built up, when they are due.
Divorce or dissolution of
a civil partnership
If you get divorced or dissolve your civil partnership,
your pension rights from the Plan may be taken into
account in a settlement, along with the rest of your
assets. The solicitor dealing with your divorce or
dissolution should ask for details of your pension
rights, which you can get from the Administrator.
Divorce or dissolution of a civil partnership can
divide or allocate assets in a number of ways,
including:
Pension Sharing Order
This effectively shares your pension entitlement;
usually up to the point you divorce or dissolve your
civil partnership. The law in Scotland is different but
the principle is the same.
Where a pension credit is granted to your ex-spouse
or ex-civil partner, the credit must be transferred out
of the Plan. They have to notify the Trustee of the
pension plan that is accepting the Cash Equivalent
Transfer Value before it is implemented.
If you’re going to receive a pension credit from your
ex-spouse or ex-civil partner, you will need to make
arrangements outside of the Plan because the Plan
doesn’t accept transfer values for pension credits.
Please note: If a Pension Sharing Order is
implemented when a pension is being paid, in
almost all circumstances you will have to repay part
of the pension you received between the effective
date and the date the Sharing Order
was implemented.
General information
2626
Attachment Order (‘earmarking’ pensions)
The couple agrees, or a court can order, that part of
your pension is ‘earmarked’, that is set aside to be
paid to your ex-spouse or civil partner. When you
retire, part of each pension payment would then be
paid to your former spouse or civil partner. If the
pension is transferred, the court order goes with it.
If you die, the pension stops. If your ex-spouse or
ex-civil partner remarries, the ‘earmarking’ order is
null and void. The law in Scotland is different but the
principle is the same.
Following the transfer, the two elements of the
pension are treated entirely separately.
Charges
If you ask for a value of your pension benefits, you
won’t generally be charged for your initial request.
However, you will need to pay for additional
administration work relating to Pension Sharing
Orders. Please contact the Administrator for details
of the current charges. The costs may be paid to the
Plan or deducted from benefits.
Anything else?
If the courts make an order it is binding on the
Trustee and the Administrator will implement all
valid court orders. It’s essential that you take your
own legal advice to make sure you understand
the implications and effect of the court
order’s implementation.
Disputes
The Administrator is your first point of contact for
enquiries. If you have any concerns about how long
they’ve taken to respond to you, or you don’t
understand or agree with the answers you get from
them, the Administrator will try to resolve these
issues. If they can’t, or you think the matter should
be referred to the Company, please contact
HR Direct.
Internal Dispute Resolution Procedure
The Trustee has an Internal Dispute Resolution
Procedure, which is available to members who have
been unsuccessful in resolving their issue through
the Administrator or the Company. This is a
two-stage process, with a senior manager of the
Company dealing with the first stage, followed by
a right of appeal to the Trustee Board. The Trustee’s
decision will be made in the context of the Plan Trust
Deed and Rules and prevailing legislation.
The Procedure is open to all members (active,
deferred, and pensioners), potential members,
spouses, civil partners, dependants and those who
believe they should fall into one of those categories.
If you have a dispute or complaint, you should
contact the Company Pensions Manager or the
Administrator who will send you a form to start
the Procedure.
General information
27www.exxonmobilpensions.com 27www.exxonmobilpensions.com
The Pensions Advisory Service
The Pensions Advisory Service helps people with
problems they’re experiencing with a pension plan
and is an additional source of advice and help to
members, independent of the Company and Trustee.
The Service has a network of volunteer advisers who
can answer questions and try to resolve the problem.
They can also help with the Internal Dispute
Resolution Procedure and will tell you if they think
that someone other than the Pensions Ombudsman
should deal with the matter.
The Pensions Ombudsman
If the Pensions Advisory Service recommends that
you make a complaint to the Pensions Ombudsman,
they will help you. In fact, the Ombudsman will
generally expect you to have sought the Services’
help before asking it to investigate a complaint.
The services of The Pensions Advisory Service
and the Pensions Ombudsman are free.
The Ombudsman investigates and decides on
complaints and disputes about the way that pension
plans are run. The Ombudsman’s decision is final
and binding on all the parties and can be enforced in
the Courts. The decision can only be changed by
appealing to the appropriate court on a point of law.
Any complaint or dispute should always first be
taken up in writing with the people or bodies you
believe are at fault, through the formal Internal
Dispute Resolution Procedure. If the Trustee has not
been given the opportunity to issue its decision, the
Pensions Ombudsman cannot deal with the matter.
The formal internal dispute resolution requirement
doesn’t apply to employers or administrators, but
you should always try and resolve issues with them
in writing.
Data protection
The Data Protection Act 1998 (the ‘Act’) governs the
processing of personal data in both electronic and
paper formats. Esso Petroleum Company, Limited
(EPCo) and ExxonMobil Pension Trust Limited
(EMPTL) will process personal data relating to you in
connection with the administration of the Plan,
which includes, for example, using your personal
data to calculate and pay benefits or for statistical
and reference purposes. EPCo and EMPTL may
disclose personal data to third parties, such as
payroll and pensions administrators, who are
contractually obliged to process such data in
accordance with EPCo or EMPTL data protection
requirements. Your personal data may be disclosed
to and processed by other ExxonMobil Group
companies, anywhere in the world for any of the
above purposes. ExxonMobil Group companies have
entered into an agreement so that the processing of
your personal information within the ExxonMobil
Group will be carried out in accordance with the
principles contained in the Act. The personal data
held will be retained for as long as is necessary
regarding your membership and the administration
of the Plan. The Act sets out a number of rights,
including:
• your right of access to personal data by
application to the administrator - this may involve
the payment of a small fee
• your right to prevent processing which is likely to
cause damage or distress, and
• your right to have inaccurate data corrected
or erased.
General information
2828
The Administrator
Please include your Employee Reference or pension
number when you contact the Administrator, as it
will help them to trace your record quickly. They will
aim to get back to you as soon as they can. Where
they can’t provide a response on the phone, they will
generally respond within 5–10 working days,
although it may take longer if additional information
is needed. Any information you give to the
Administrator is treated confidentially.
ExxonMobil Plan Administrator
Willis Towers Watson Limited
PO Box 545
Redhill Surrey
RH1 1YX
Tel: 01737 788162
Email: exxonmobiluk@willistowerswatson.com
ePA
Check your personal details on line and produce
quotations of future benefits at:
www.epa.towerswatson.com/doc/XOM/login.htm
Independent Financial Advice
By law, the Trustee and the Company can’t offer
financial advice about your pension so you should
consider speaking to an Independent Financial
Adviser (IFA). You can find local IFAs at:
www.unbiased.co.uk
IFAs will charge a fee for any advice given.
The Pensions Ombudsman
If the Pensions Advisory Service fails to resolve your
dispute, you can ask the Pensions Ombudsman to
investigate.
11 Belgrave Road
London
SW1V 1RB
Tel: 020 7834 9144
Email: [email protected]
The Pensions Advisory Service
They give help and advice on all pension matters
apart from State pensions. The Service is available to
anyone who thinks they have pension rights and
covers current and past scheme members,
pensioners and dependants. They will also help
members and beneficiaries with a pension query or
any difficulty that they have failed to resolve with the
Trustee. You can contact the Service through your
local Citizens Advice Bureau or directly at:
11 Belgrave Road
London
SW1V 1RB
Tel: 0845 601 2923
The Pensions Regulator
The Regulator has powers to protect funds held in
pension plans. It aims to identify plans at risk and
work with them to get back on track. The Regulator
can intervene in the running of schemes where
trustees, employers or professional advisers have
failed in their duties. It also aims to promote high
standards and good practice in the pensions industry.
Napier House Trafalgar Place
Brighton
BN1 4DW
Tel: 0870 606 3636
Email: customersupport@thepensionsregulator.gov.uk
Pension Wise
A free and impartial government service that helps
you understand your pension options. It provides a
guidance guarantee with telephone and face to face
guidance.
www.pensionwise.gov.uk
Money Advice Service
You can also get free and impartial advice and
information about your finances, including pensions,
from the Money Advice Service.
www.moneyadviceservice.org.uk/en
Reconnect
Useful contacts
29www.exxonmobilpensions.com 29www.exxonmobilpensions.com
Actuary
A professional who estimates the Plan’s needs for
long-term finance. They produce actuarial valuation
reports and a certificate about the Plan’s funding
every year.
Civil partner
Someone you have registered a civil partnership
with under the Civil Partnership Act 2004.
Company
Esso Petroleum Company, Limited, or in some
circumstances another UK member company.
(ExxonMobil Chemical Limited or International
Marine Transportation Limited).
Dependant
Someone who may be eligible for death benefits
or pension, generally at the absolute discretion
of the Trustee.
Disability conditions
• Total disability
If you are permanently and totally incapacitated
to the extent that you can’t undertake any
meaningful employment in the future.
• Partial disability
If you can’t perform your current role, or any
other equivalent role, for any member company
for medical reasons, on a long-term basis.
This is after reasonable adjustments have been
made and training (taking experience, current
location and any other location at which you could
contractually be required to work into
consideration) has been given.
To find out how a total or partial disability
pension is calculated, please read the
Medical Retirement Factsheet.
Employer
The company employing you and, if participating
in the Plan, a member company.
Member Company
Currently Esso Petroleum Company, Limited is the
principal employer. ExxonMobil Chemical Limited
and International Marine Transportation Limited are
also member companies. Eligible employees of any
member company may join the Plan.
Nominated beneficiary
Someone (other than your spouse/civil partner or
children under 18) who you have nominated to be
considered for your death benefit lump sum or,
as a separate nomination, your AVCs.
Normal Retirement Date
(NRD)
Your 65th birthday. However, you could retire earlier,
as explained on page 12. You can work after NRD
and to continue to build up pension, however the
Company doesn’t allow you to increase your benefits
in the Plan whilst taking your pension.
Reference
Pension terms explained
“There are various words and phrases used throughout
this guide which you may not be familiar with, or may
have different meanings to their usual ones.”
3030
Pensionable salary
The part of your pay used to work out your
contributions and benefits. It is your basic wage or
salary determined by the Company. It excludes
overtime, bonuses and allowances but includes
specified salary sacrifice and shift pay. Shift pay is
treated slightly differently from base pay to ensure
that you receive value for periods of shift work in the
past, even if you’re not on shift now. This is explained
in more detail on page 9. Plan benefits are generally
based on your last 12 months’ pensionable salary,
even if you have been receiving sick pay.
Pensionable service
The number of years and months that are used to
calculate your benefits. If you receive no pay for a
period, this will count as ‘days of non-contributory
service’ and will not count when your benefits
are calculated.
Recovery charge
Benefits in excess of the Lifetime Allowance will be
subject to an additional tax recovery charge.
Registered pension
arrangement
The Finance Act 2004 introduced this term for
tax-advantaged pension saving that includes
occupational pension plans (such as the Plan),
group personal pension plans, self- invested
personal pension plans and free-standing AVCs.
SMART adjustment
SMART adjustment is a way of making a
contribution to the Plan by reducing your annual
salary. The Company then pays this reduction and
its own contribution into the Plan. You receive a
correspondingly reduced salary and consequently
pay less National Insurance.
You can opt out of SMART within one month of
joining the Plan. You may also be able to opt out of
SMART if your salary decreases and this may mean
that you will be at a disadvantage from remaining
in SMART.
You can get more information about this from
HR Direct.
Spouse
A husband or wife to whom you are legally married
(but not a civil partner). This includes your husband
or wife who you are legally married to under the
Marriage (Same Sex Couples) Act 2014.
Pension terms explained
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