DB benefits

If you have DB benefits, you have a number of choices about taking your benefits at retirement. To start with, you’ll need to find out how much your Plan pension will be.

Step 1: get a pension quote

You can request a pension quote online or by calling Premier Pensions, the Plan administrator. Premier Pensions will send you a retirement pack explaining your options together with your personalised Statement of Plan Retirement Benefits.

Step 2: think about your options and decide how much tax-free cash to take

You can take up to 25% of the total of your pension fund as a tax-free cash lump sum, if you wish to. You can then use the remainder to provide a taxable retirement income in the way that best suits your own circumstances:

  • Take your annual Plan pension
  • This will be paid monthly for the rest of your life.

  • Take some tax-free cash and your Plan pension
  • You can give up part of your pension (up to 25%) for a tax-free cash lump sum. Your regular pension payments would be lower than if you took your full pension.

  • Decide what to do with any AVCs you’ve paid
  • You can decide to include them as part of your Plan benefits, put them towards your cash lump sum, or take them separately from the Plan and use them to purchase an annuity or take a lump sum with another provider.

    Benefits you take outside of the tax-free cash allowance are subject to income tax. Depending on the amount and any other income you have for the year, you may find you’re pushed into a higher tax band.

    Your AVCs may be transferred out of the Plan at any time, together with or separately from your DB Section benefits.

  • Take a cash equivalent transfer value (CETV)
  • If you’d like to access your pension more flexibly, you’d need to transfer the value of your benefits in the Plan to a defined contribution (DC) pension arrangement with another provider.

    In taking a transfer, you’d no longer be a member of the Plan. If your CETV is £30,000 or more, you’ll be required to take independent financial advice from an adviser who is qualified to give advice about DB pensions before a transfer can go ahead.

To find out more about your choices if you take a transfer, please see the section on DC Benefits.

Step 3: tell the Company and the Plan administrator

There will be a few administrative things to do and forms to complete to put your Plan pension into payment.

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