Normal retirement

The Normal Pension Age under the Plan is age 60 until 1 October 2006 when it is 65. When you retire, the value of your accumulated Retirement Account will be used to purchase the benefits of your choice. As well as a pension for yourself, these benefits can include:

a tax-free sum
a pension payable to your spouse should you die first
a pension for your Dependants should you die first

The maximum* amount of the tax-free sum you are able to take is normally restricted to 25% of the value of your Retirement Account.

Any pension provided (except for any pension provided from any additional contributions which you have made) must increase with inflation each year, up to 5%.

Your pension will be paid directly to your bank or building society account and will be subject to tax. It is payable for life.

Example:

A member is age 60 in 3 months time with a Retirement Account value of £40,000. The member is given following options:

use all the £40,000 for a pension for himself that will be paid for the rest of his life and increased with inflation each year, up to 5%.
take a lower pension but have pension increases each year up to a higher maximum.
take up to £10,000 as a tax-free cash lump sum and use the rest of the money to buy a pension.
take a lower pension for himself and use some of his Retirement Account to provide a pension for his partner, when he dies.
take a pension with a guarantee period so that if he died during the first five years of retirement, his beneficiaries would receive an amount equivalent to any unpaid installments.

The Plan administrators will contact you six months before you reach age 60 to let you know:

how much is in your Retirement Account
how much pension this could buy
what your options are
what to do next

* If your entitlement to tax free cash was greater immediately prior to the 6th April 2006 you may take the higher value. See Cash Allowance.