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Accrual Rate
The rate at which your Defined Benefit pension builds up each year.
Active member
A person who is currently employed by Nestlé and is building up benefits in the Fund.
Additional Voluntary Contributions (AVCs)
Contributions that you can make on top of your main contributions to provide additional benefits at retirement.
Annual Allowance (AA)
Each year your pension is subject to an Annual Allowance (AA). This is the maximum amount by which the value of your pension benefits from all sources (excluding State pension) can increase in any one tax year without incurring a tax charge. The AA is £40,000 for most people, although a higher limit of up to £80,000 may apply in some circumstances in 2015/16. A lower limit of £4,000 (Money Purchase Annual Allowance or MPAA) may also apply in certain circumstances (see MPAA definition below). From 6 April 2016 the AA will be reduced for most people with ‘Adjusted Income’ above £150,000 a year through the introduction of a Tapered Annual Allowance. If you exceed the AA in a given tax year, you are required to declare the excess and pay the charge as part of your annual income tax return.
Automatic enrolment
A law which requires all UK employers to enrol their employees into a workplace pension scheme, which meets certain standards, if they are not already in one.
Career Average Revalued Earnings (CARE)
This is a type of defined benefit scheme where benefits at retirement are based on average revalued earnings throughout a member’s membership period. For more information on how this works, see How it works, DB Core and DB CorePlus.
Consumer Prices Index (CPI)
The index of consumer prices compiled by the government’s Office of National Statistics.
Deferred member
A person who is no longer employed by Nestlé and/or is no longer building up benefits in the Fund.
Defined benefit (DB)
A pension arrangement where the benefits at retirement are based on a calculation, which is linked to a member’s Pay and length of Pensionable Service. Final salary and CARE are different types of DB arrangements. DB Core and DB CorePlus are DB arrangements.
Defined Contribution (DC)
A pension arrangement where contributions are made to an individual account. These contributions are then invested to provide investment returns. The benefits paid when a member retires depend on how much money goes into the account, how investments perform and how much a pension costs at retirement. For more information on how this works, see How it works, DC Core. DC Start and DC Core are DC arrangements.
Dependant
Any person who is financially dependent on or interdependent with you at the time of your death.
Final Salary
A pension arrangement where the benefits at retirement are linked to a member’s Final Pensionable Earnings and length of Pensionable Service.
The Fund
Nestlé UK Pension Fund.
Lifetime Allowance (LTA)
When you retire, the value of your Fund benefits plus any previous benefits you may have built up elsewhere (excluding State Pension) will be tested against the LTA at that time. If the total value of all your benefits exceeds the LTA at retirement, you will have to pay a tax charge, payable to HM Revenue & Customs. The LTA charge only becomes payable at the point when you put benefits into payment that exceed the LTA. The LTA is £1 million from 6 April 2016.
Money Purchase Annual Allowance (MPAA)
The Money Purchase Annual Allowance (MPAA) is the amount of money you can pay to a defined contribution arrangement like DC Start or DC Core if you:
  • Started to take benefits from a defined contribution pension arrangement on or after 6 April 2015; and
  • Accessed your monies from that arrangement ‘flexibly’ under the ‘Freedom and Choice’ options that were introduced on 6 April 2015; or
  • Are withdrawing monies directly from your retirement savings within that arrangement to provide a regular income (‘flexi-access drawdown’).
The MPAA restricts the amount you can pay to £4,000 a year, including any employer contributions where payable, if the above applies. The MPAA will not apply to you if you used some or all of your monies to buy an annuity to provide a regular income.
Nestlé
Nestlé UK Ltd and all other Nestlé Group companies participating in the Fund.
Normal Pension Age (NPA)
For benefits built up from 1 August 2017 onwards, your Normal Pension Age is your State Pension Age unless your contract of employment states otherwise. For benefits built up to 31 July 2017, your Normal Pension Age is age 65, unless your contract of employment states otherwise.
Normal Pension Date
The date you can take your State Pension (for benefits built up from 1 August 2017) or age 65 for pension built up to 31 July 2017 unless your contract of employment states otherwise.
Pay
This has a specific definition within the Fund’s Trust Deed and Rules, but in practice, by ‘Pay’ we normally mean your Pensionable Earnings.
Pension Input Period
The period over which your pension savings are measured against the Annual Allowance. The Pension Input Period for the Fund is 6 April to the following 5 April.
Pensionable Earnings
The earnings used to calculate your contributions to all sections of the Fund as well as how pension builds up in DB Core and DB CorePlus (see also Pensionable Earnings Cap). From 1 August 2013 these are your base pay plus any work-pattern based elements of pay such as overtime or shift allowance, as well as the following allowances: pay arising from the sale of annual holiday entitlement, accrued holiday pay (when paid during service), graduate location allowance and car trade down allowance. Bonuses and all other cash allowances are not normally included.
Pensionable Earnings Cap
The Pensionable Earnings used to calculate your contributions and pension built up in DB Core and DB CorePlus is capped (known as the ‘Pensionable Earnings Cap’). DB benefits are available based on Pensionable Earnings each year up to the Pensionable Earnings Cap. If your Pensionable Earnings go above the cap in any one year, you will start to build up DC benefits based on your Pensionable Earnings over the cap.

The cap applies to your Pensionable Earnings each year from 1 April to the following 31 March. At the start of each year, you can build up DB benefits until your Pensionable Earnings go above the Pensionable Earnings Cap, at which point you start to build up DC benefits in DC Core. Then at the next 1 April, you start building up DB benefits again until your Pensionable Earnings reach the Pensionable Earnings Cap again.

The Pensionable Earnings Cap is £30,000 for the period from 1 August 2017 to 31 March 2018. From 1 April 2018, the Pensionable Earnings Cap will be £45,000.

To take account of inflation, the Pensionable Earnings Cap will be increased each year by the rise in Consumer Prices Index (CPI) up to a maximum of 2%.

Pensionable Service
The number of complete years and days of continuous membership of the Fund.
Qualifying scheme
A pension scheme which meets the government’s standards for automatic enrolment.
Retail Prices Index (RPI)
The index of retail prices compiled by the government’s Office of National Statistics.
State Pension Age
The age at which you can start to take your State Pension.
Target Retirement Age (TRA)
This is the age at which you have stated that you are intending to retire if you have benefits in DC Core (including DC Core AVCs) and you are investing in the Lifetime Pathway option. If you don’t choose a TRA, the default TRA will be your State Pension Age when you join.
Terminal Salary
If you were a member of the former Purina UK Pension Plan, your Terminal Salary is the aggregate of your basic annual salary or wages at 31 July 2010 plus the annual average of your bonuses, overtime and other fluctuating emoluments specifically recognised by Nestlé Purina Petcare (UK) Limited in any individual case as being included in your Purina Pensionable Earnings in the three consecutive tax years before 31 July 2010.
Uncrystalised funds pension lump sum (UFPLS)
Uncrystalised funds pension lump sum (UFPLS) is another way of taking pension benefits, without going into drawdown or taking an annuity. It can be used to take your fund in one go – 25% of it tax free, with the remaining 75% taxable.