Your pension benefits
premium pension scheme
- How do you work out my pension?
- What are “final pensionable earnings”?
- What is a year of reckonable service?
- Do I get a tax-free lump sum?
- When can I draw my pension?
- Will you increase my pension?
- Can I make changes to my pension arrangements?
How do you work out my pension?
We work out your pension as 1/60 of your final pensionable earnings for every year of reckonable service in the scheme. See below to find out how we work out ‘final pensionable earnings’ and ‘reckonable service’.
What are “final pensionable earnings”?
Your final pensionable earnings will be whichever the best is, either:
- your last 12 months‘ pensionable earnings (not including bonuses)
- the highest pensionable earnings (not including bonuses) you have had in any of the last four full tax years, or
- your highest average pensionable earnings including any pensionable bonuses (this method is based on your average pensionable earnings over three tax years in a row, and we will look back up to 13 years).
We will take account of inflation when doing this.
For most people, final pensionable earnings will be their pensionable earnings in their last 12 months of service. If you have an unusual earnings pattern with earnings peaking before you retire, one of the other definitions above, which look at earlier periods of service, may give a better result.
What is a year of “reckonable service”?
If you work full-time, every year in the pension scheme counts as a year of reckonable service. If you work part-time, each year you work will buy a proportion of a year of reckonable service. The maximum number of years that can count for a pension is 45.
Do I get a tax-free lump sum?
You can opt to give up part of your pension for a tax-free lump sum. We will reduce your pension by £1 for every £12 you take as lump sum. The maximum you can take is 33/17 x your pension.
Lump sum calculator [XLS] This calculator uses Microsoft Excel. It will help you to decide how much lump sum you want to take. If you do not have Excel, ask your pensions administrator helpline to do the calculation for you.
When can I draw my pension?
The scheme has a pension age of 60; this is the earliest that you can usually take your pension without it being reduced for early payment.
Will you increase my pension?
We will increase your pension every year in line with the rise in the Retail Prices Index (RPI).
Can I make changes to my pension arrangements?
You will have one opportunity to switch from the premium scheme to a partnership pension account, which is a money purchase pension with an employer contribution. You will also have one opportunity to switch back from a partnership pension account to the premium pension scheme. We only allow you to switch on 1 April and 1 October each year and you must give us three months‘ notice.
