A pension is all about planning for the future and building the savings you will need for later life. Whatever stage you’re at, it’s important to fully understand how pensions work, what options you have, and how the choices you make now will affect your retirement plans.

Being a member of the Scheme ensures that you are provided for while you are working for the Company. It also continues to protect you and your family long after you retire.

Under the Defined Benefit (DB) Section of the Scheme, you contribute a fixed percentage of your DB Pensionable Salary to give you a defined benefit at retirement. The amount you contribute depends on your category, for example, 5% or 9%.

Your DB Pensionable Salary is made up of your DB basic pay which was fixed on 31 May 2014, and all pensionable fluctuating payments. Your final DB Pensionable Salary will be calculated when you retire or at the point you leave the Scheme, and will include the relevant fluctuating payments.

Your pension at retirement is based on your final DB Pensionable Salary and your length of membership in the Scheme, also known as your pensionable service.

These are calculated by Capita, the Scheme Administrator, and multiplied by an accrual rate. Your accrual rate is determined by your category, for example, 1/60th or 1/80th. You will also be given the option to give up part of your pension so you can have a tax-free cash lump sum.

Between 1 June 2008 and 31 May 2014, any pay rise over 3% or pay rises outside the normal annual review were pensionable under the DC Section of the Scheme.

Pay rises from 1 June 2014 are all pensionable under the DC Section. You will have chosen your contribution rate in the DC Section, and the Company will make the appropriate corresponding contribution. With effect from 1 December 2021, all DC contributions are paid into the L&G Mastertrust.

The benefit you receive will also be affected if you have chosen to pay Additional Voluntary Contributions (AVCs) at any time. Currently, the Scheme allows AVCs to be paid into the DC Section. This means that your AVCs can be used to enhance your maximum cash lump sum or be treated as a separate fund. With effect from 1 December 2021, all AVCs will also be paid into the L&G Mastertrust.

For more information on the DC section visit the L&G Mastertrust website.