Pensions and Thanks A Million FAQs

1. How do I pay my Thanks A Million payment into the O2 Pension Plan?

It couldn't be easier. There are just four steps;

Join the O2 Pension Plan if you are not already a member.
Print out the form here.
Complete it, choosing your investments.
Send it to the Pension Centre at the address on the form by 31st January 2008. Late forms will not be accepted.

2. What happens to my Thanks A Million payment if I choose to put it into the O2 Pension Plan?

Your contribution is paid into the O2 Pension Plan and invested in accordance with your wishes until you retire. If you are a Section 1 member (in the defined contribution or ‘money purchase’ part of the Plan, joined after April 2001), it will be invested with your other contributions.

For those in Section 2 and 3 (the defined benefit or ‘final salary’ part of the Plan that you joined before April 2001), your Thanks A Million payment will be put into an investment fund and invested in accordance with your instructions. This means it is invested as a ’money purchase’ or defined contribution pot. If you already make Additional Voluntary Contributions (AVCs) then you’ll be familiar with this concept, however your Thanks A Million payment is slightly different and held separately from any AVC fund as it is classified as an employer contribution.

Whichever section of the 2 plans you belong to, on your retirement you can use the proceeds of the invested fund to buy a pension. You can also choose to take 25% of it as tax free cash.

If you leave O2, subject to having at least 3 months service in the O2 Plan, you can transfer your fund to your new pension scheme (subject to the consent of the trustees of your new pension).

3. When will the payment be made into the O2 Pension Plan?

The payment will be sent to the O2 Plan shortly after the March 2008 payroll. You will then get a letter from Pensions Centre confirming the details of your payment.

4. I know that if I leave O2 or leave the Plan early (within 2 years of joining the O2 Plan) I am entitled to a refund of my contributions. Would my Thanks A Million payment count as my contribution?

No it doesn’t. Employee contributions are refunded if you leave within 2 years of joining the O2 Pension Plan. As the Thanks A Million payment is treated as being made by O2, so that NI can be saved, it can’t be refunded if you leave O2 or the Plan within 2 years. It is an employer contribution, not an employee contribution. However, if you have been in the O2 Pension Plan for at least 3 months you can transfer your pension on leaving to another scheme. If you have been in the O2 Plan for more than 2 years then you can simply leave your payment invested in the O2 Plan until you retire.

5. If I choose to have my Thanks A Million payment put into pension, when can I get my money out?

You will have to wait until you retire. Once a payment is made to a pension scheme it remains locked away until you retire.

6. I just want to put part of my Thanks A Million payment into my O2 pension, can I do that?

Unfortunately not, it’s all or nothing. We are asking that you decide to put either the whole Thanks A Million payment into the O2 Plan or it’s all taken as a cash payment and not put into the O2 Plan at all.

7. I’m not a member of the O2 Pension Plan, can I still put my Thanks A Million payment into a pension?

You can but you need to join the Plan first. Click here for how to do this. Because you join the Plan through flexible benefits, it is unlikely that you will be able to join in time to put your Thanks A Million bonus in the Plan.

8. How will I know how my payment is doing once it is in the O2 Pension Plan?

Once in the O2 Pension Plan, you will be given regular investment performance updates via Your Total Reward.

9. I am a Section 2 or Section 3 member, will my Thanks A Million payment be invested in additional final salary benefit?

No, it will be invested in an investment fund (like a defined contribution pot) in accordance with the investment instructions you put on your form. See question 2 above.

10. I’ve heard of AVCs, would the Thanks A Million payment be an AVC?

Nearly. An AVC is an employee contribution, but the TAM payment is an employer contribution. The TAM payment is just like an AVC but is held separately from AVCs because it is a requirement that employer contributions are held separately from employee contributions.

11. I am Section 1 member paying less than 10% contributions, should I pay my Thanks A Million payment into the O2 Plan?

You may wish to consider increasing your contributions first - don’t forget O2 matches your contributions up to 10% of your salary.

12. I am a Section 2 or Section 3 member, how do I set up an investment to accommodate the payment?

Simply complete the form downloadable above.

13. If I set up a fund to accommodate my Thanks A Million payment can I make additional one off payments into it?

You can liaise with the pensions centre to make one off payments. However these contributions will not benefit from NI saving in the same way as the Thanks A Million payment as they will be contributions from you, not contributions from O2.

14. Where can I get help in choosing the investments?

You are half way there as you have accessed the pension website to read this FAQ. You can start from the home page by selecting from the left hand drop down menu or the buttons which Section member you are and then selecting ‘Plan Basics’ which will show you the investment pages for each of the Sections of the plan.

15. Can I have this money directed into my personal pension?

No, but you can pay your Thanks A Million payment into a personal pension once you have received it, and reclaim the tax already deducted. You will not be able to save the NI this way. Your personal pension provider will be able to provide more assistance.