Taking your benefits
Your Normal Pension Age (NPA) in the Fund is your State Pension Age, unless your contract of employment states otherwise. You can choose to take your benefits earlier or later than this if you wish.
How my pension will be paid
Your pension from DB Core and/or DB CorePlus will be paid monthly for the rest of your life directly from the Fund into your bank or building society. If you retire mid-month, the first payment will be a proportionate amount. Your pension will be subject to income tax in the same way as your pay is at present, although your tax code might change.
Once your pension is in payment, it receives increases each year to help it keep pace with inflation. the Fund increases pension built up in DB Core and DB CorePlus in line with the rise in CPI, up to a maximum of 2.5% a year. If you have been retired for less than a year, the increase to your pension will be a proportion of the full increase based on the number of days between your date of retirement and the date of the increase. Once the pension has been paid for more than a year you will receive the full increase at 6 April each year.
If you wish, you may retire early at any time from age 55 (under current legislation) with Nestlé’s consent.
Your pension will be calculated in the same way as at your Normal Pension Date but based on the Pensionable Service you have actually completed in DB Core and/or DB CorePlus. This pension will be reduced by 4% for each year that you retire before your Normal Pension Date, because it is likely to be paid for a longer period. If you decide to take early retirement after leaving the Fund, the calculation of your early retirement pension may be less favourable than if you retire from active service as different reduction factors will be used. Contact Nestlé Pensions for further information.
If you joined the Fund before 6 April 2006, you can take your benefits from age 50 if you leave Nestlé’s employment, become a deferred member and then choose to retire. See Pre August 2010 Benefits for more information.
If you were a member of the Nestlé Waters UK Ltd Retirement Benefit Scheme before 31 July 2010, you can retire from age 50. See Pre August 2010 Benefits for more information.
If you joined before 1 August 2017, see Previous benefits for information about how your pension built up to 31 July 2017 is reduced for early retirement. See Pre August 2017 Benefits for more information.
Options at retirement
Level pension option
If you retire from active service before State Pension Age, you can choose to take a higher pension in the years between retirement and State Pension Age and a lower pension after you start to receive your State pension, so that your total income broadly remains the same. This is known as the level pension option.
Single person’s option
If during your period of Pensionable Service in the Nestlé UK Pension Fund you were single and never had any spouse, civil partner, dependant or children, you may be eligible for an increase to your Defined Benefit pension, provided that you give up any future entitlement to benefits for any spouse, civil partner, dependant or children.
Further details are available on request from Nestlé Pensions.
Increased pension for a dependant
You may choose to take a lower pension for yourself in exchange for providing a higher pension for your dependants when you die. Full details are available on request from Nestlé Pensions.
If you are planning on spending your retirement overseas, we will still be able to pay your pension, provided you are living in a country with an established banking system. It is possible to make international payments by bank transfer. However, you should bear in mind that the payment would be made in Sterling and the receiving bank might make a charge for converting it into the local currency. Please note we can still make payments to a UK bank account even though you are living overseas.
If Nestlé agrees, you may continue working beyond your Normal Pension Date and you can either choose to opt out of the Fund or continue to contribute until whichever is the sooner of your retirement date or your 75th birthday. The benefits you receive will depend on whether you opt out of the Fund or continue to contribute.
If you opt out of the Fund after your Normal Pension Date:
- you stop making contributions;
- your pension will be based on your Pensionable Service to and your Career Average Revalued Pensionable Earnings at your Normal Pension Date (or the date you opt out if later). When you actually retire, the pension (including any Final Salary pension built up to 31 July 2010) will be increased by a late retirement factor to reflect the later start date.
- life cover will be based on death-in-retirement benefits.
If you remain an active member of the Fund after your Normal Pension Date:
- you continue to make contributions to the Fund as normal (up to age 75 maximum);
- your pension will be based on your Pensionable Service to and your Career Average Revalued Pensionable Earnings at the date of your late retirement and no late retirement factor will be applied.
- death-in-service benefits continue as normal.
From 1 August 2017, if Nestlé agrees, you will be able to take part of your pension at any time from age 55 (under current legislation) and continue working for Nestlé. If you choose this option, you must retire and take the remainder of your benefits within two years of taking the first part.
Flexible retirement is an HR policy offered at Nestlé’s discretion and is not therefore governed by the terms of the Fund’s Trust Deed and Rules. If considering flexible retirement as an option, you should first consult the policy document. Options for flexible retirement are outlined below. Flexible retirement is only available to members who have benefits in the DB sections of the Fund.
If you take flexible retirement, you can continue to build up benefits in the DC Core section of the Fund while you are still working for Nestlé.
If you have benefits built up before 1 August 2010
Take your benefits built up before 1 August 2010 at your flexible retirement date and then take your benefits built up from 1 August 2010 at your final retirement date.
If you have benefits built up any time before 1 August 2017
Take your benefits built up before 1 August 2017 at your flexible retirement date and then take your benefits built up from 1 August 2017 at your final retirement date.
At your flexible retirement date, take all the benefits built up until that date and then take your benefits built up after flexible retirement at your final retirement date.
At retirement guidance
Nestlé wants you to be able to make decisions that are right for you when you take your pension benefits. Before you make any decisions, it is vital that you have all the information you need to make a fully informed decision.
Nestlé recognises that the decisions you need to make are complex, and to assist you with your decision making process at retirement, Nestlé offers you the opportunity to access ‘At Retirement Guidance’ from an Independent Financial Advisor (IFA), which Nestlé will pay for.
This service is designed to help you understand your options with regards to your retirement. To access this service you will need to contact the team at Origen Financial Services Ltd (“Origen”) and make an appointment:
Telephone: 0800 656 9967
Write: Origen Financial Services, Infor House, 1 Lakeside Road, Farnborough, Hampshire GU14 6XP
You will need to provide the team with a copy of your retirement quotation in advance of your meeting.
Please note that you will only be able to access the guidance paid for by Nestlé once. Should you wish to go on and receive financial advice from Origen the cost of this will need to be met by yourself.
If you leave Nestlé before your Normal Pension Age (NPA) without retiring, or decide that you do not want to be a member of the Fund and opt out but continue working for Nestlé, your contributions will stop. You’ll stop building up any further pension benefits in the Fund. If you continue working for Nestlé and you opt out, your life insurance cover will reduce to two times Pay.
If you opt out but remain employed by Nestlé, you may be automatically enrolled again in the future. This is because the government has specified that every three years employers must re-enrol eligible employees who have opted out. If you opt out and are aged under 22 or earn less than £10,000 a year (£833 a month) , you may be re-enrolled sooner than 3 years if your circumstances change and you meet the criteria for automatic enrolment. If you have recently joined or been enrolled into the Fund, see also Opting out.
To opt out you need to complete an Opt-out form. If you do not have access to a printer, you can request a paper version from Nestlé Pensions by email or by phone on (0208) 667 6363. Complete, sign and return the form to Nestlé Pensions, 1 City Place, Gatwick, RH6 0PA. Alternatively, we will accept a scanned version of your completed, signed form by email to: email@example.com. Before transferring out of the Fund, you might want to take independent financial advice. The money advice service has a directory of advisors who are authorised by the Financial Conduct Authority – visit www.fca.org.uk
Benefits on leaving
Your pension options will depend on:
- the length of time you have been a member of the Fund;
- the types of benefit (DB and DC) you have in the Fund; and
- whether you were contractually or automatically enrolled into the Fund;
If you have been a member for two years or more, irrespective of when you joined, you will become a deferred member of the Fund. Your benefits will remain in the Fund until you take your pension or until you choose to transfer your benefits to another recognised pension scheme. If you have built up pension in DB Core or DB CorePlus, it will be calculated in the same way as at Normal Pension Date but based on your Career Average Revalued Pensionable Earnings and Pensionable Service when you leave. To help it keep pace with inflation, it will then be increased each year in line with movement in the Consumer Prices Index up to a maximum of 2.5%. If you leave your benefits in the Fund and you have a DC Start or DC Core account (including DC Core AVCs), its value will continue to go up and down depending on investment performance. You will be able to use the value of your account to provide pension benefits when you retire. If you transfer your main Fund benefits to another pension arrangement, the value of your AVC benefits will also be transferred.
Before transferring out of the Fund, you might want to take independent financial advice. The money advice service has a directory of advisors who are authorised by the Financial Conduct Authority – visit www.moneyadviceservice.org.uk