UKAEA Pensions

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Shift Pay Pension Savings Plan

When will I become a member of the Shift Pay Pension Plan?

You will automatically be included in the Plan from the day on which you receive your first payment of pensionable shift pay if:-

  • you are a member of the United Kingdom Atomic Energy Authority final salary pension scheme
  • your employer has decided that you are eligible to join the Plan

You will cease contributing to the Shift Pay Pensions Plan when you cease contributing to the Combined Pension Scheme for basic future service accrual.

What benefits will I receive from the Shift Pay Pension Plan?

The amount of the fund will of course depend upon the amount of contributions paid and the investment return based on market conditions. Where HMRC limits allow it, you may be able to take your fund accumulated before (check date) as tax free cash.  The funds accumulated after this date will be subject to a tax free cash lump sum of 25% of the fund when you retire.  The value of your fund not taken as tax free cash must be used to purchase an annuity.

Does the Plan provide me with life assurance cover?

Yes. If you die in service then you would normally receive two times final earnings from the United Kingdom Atomic Energy Authority final salary scheme. If you are in Plan service when you die your Shift Pay Pension Plan fund would be increased to the value of two times your pensionable shift pay or the value of your fund would be paid if this is more.

How much do I pay to the Plan?

As a Member of the Plan you will be required to contribute, by deduction from your pay, each time you receive a payment of Pensionable Shift Pay. The basic rate of contribution is 5% for Combined Pension Scheme members, (7.5% for Principal Non-Industrial members) but you may choose to contribute at the higher rate of 10%,12.5% or 15% of your Pensionable Shift Pay.

Can I change the amount I pay to the Plan?

You must of course pay at least the minimum amount of 5% for Combined Pension Scheme members (7.5% for Principal Non-Industrial Scheme members). You can decide to change your percentage contribution from each April to 10%, 12.5% or 15% of your pensionable shift pay.

If you wish to change your level of contributions you should contact your employee representative or the scheme administrators in plenty of time before the beginning of April, so that arrangements can be made with your employer’s payroll section to change your contribution rate.

Do I receive tax relief on my Plan contributions?

Yes. Pension contributions to the Plan will count towards assessing the HMRC's limits for pension contributions.

Does my employer pay any contributions to the Plan?

Yes,  Your employer will pay a minimum of 6% of your pensionable shift pay or at the same rate as they are required to pay to the Defined Benefit Scheme, whichever is greateer.

The cost of providing your life assurance cover in the Plan is paid for by your employer.

Do I receive interest on my Plan fund?

Interest is added on a daily basis to all sums credited to your fund. In addition, providing that you have contributed for more than one Plan Year, when your benefits become payable under the Plan, an extra amount called capital growth bonus is normally added.

Will a Market Value Reduction be applied to my Plan fund?

Prudential guarantees that the full amount accumulated in your fund at the time you retire, including interest and any capital growth bonus, will be available on retirement on or after your normal retirement age, on ill-health retirement or on death before retirement.

If you retire with a pension from the United Kingdom Atomic Energy Authority final salary scheme before your normal retirement age, or where a transfer value is paid if you leave the Plan, Prudential’s current practice is to provide the full amount in these circumstances too, whilst reserving the right to make a market value adjustment which means the full amount might not be provided.

The amount of interest and any capital growth bonus will depend upon the profits declared by Prudential. You should note, however, that the value of any investment can fall as well as rise, and that the rate of future interest and bonuses cannot be guaranteed.

Benefits statements

Each year you will receive a benefit statement showing how your account has changed.

What if I die in Plan Service on or before my normal retirement age?

If you die while in Plan Service (i.e. whilst contributing to the Plan), on or before your normal retirement age and your fund is less than twice the annual equivalent of your Pensionable Shift Pay, determined at the previous 5 April, a life assurance benefit will be payable to bring the value of your fund to that level.

If you cease to receive pensionable shift pay your cover for the life assurance benefit will be maintained until the following 5 April, but will then cease.

The life assurance cover will not usually be extended beyond your normal retirement age, even if you remain in Plan Service.

Who will receive the lump sum benefits death in service benefit?

You may indicate to whom you would like any discretionary lump sum from the United Kingdom Atomic Energy Authority final salary pension scheme and the Shift Pay Pension Plan paid, if you die in service, by completing a Nomination for Death Benefit form. (Payment of any such lump sum may then be made to that person as soon as the death certificate is received.) If you have not already done so you are strongly advised to complete a Death Benefit Nomination form. Click here for details about nominations and for a copy of the Nomination for Death Benefit form.

What if I die in service and I am no longer contributing to the Plan?

If you cease to receive pensionable shift pay your cover for the life assurance benefit will be maintained until the following 5 April. However, if you die in service after this date and you are no longer contributing to the Plan your fund may be payable as a lump sum, including any interest accumulated to your date of death and any capital growth bonus, subject to HM Revenue and Customs limits.

Can I take tax free cash from the Plan when I retire?

If you cease working shifts permanently you may crystallise your fund at any time after the age of 55. 

If you crystallise your fund at your normal retirement age the sum which has accumulated for you may be taken as a tax-free cash payment, provided the amount does not exceed the maximum permitted by the HM Revenue and Customs.

At the time of you crystallise your fund the scheme administrators will calculate the overall benefits payable to you and advise you how much, of the Shift Pay Pension Plan may be taken as tax-free cash.

Normally you can realise 25% of the fund as tax free cash.

If your benefits exceed HM Revenue and Customs tax free cash limits limits then the Shift Pay Pension Plan benefits will be paid as an annuity or as part tax free-cash and part as taxable cash or as an annuity of your choice.

Do I have to purchase an annuity from Prudential?

Retirement benefits will normally be provided by the Prudential, unless you ask to purchase your benefits from a life insurance company of your own choice.

You do not have to purchase an annuity with the fund but instead can take the benefit as cash.  Please ask your employee representative for details. 

Does the annuity increase?

Annuities will not increase whilst in payment unless you specifically request an annuity which increases during the payment period.

Further details of the options and benefits available to you will be supplied shortly before you retire or at the time of leaving, should this occur before retiring age.

What if I retire early?

If you retire early, provided you are over age 55 (in some cases age 50 - you should check you position with the scheme administrators), and in receipt of a pension from the main United Kingdom Atomic Energy Authority pension scheme, you will normally receive your benefits under the Plan.

If you retire on grounds of ill-health at any age the Plan benefits are payable immediately.

What if I postpone my retirement age?

If you postpone your retirement, payment of your benefits will normally be deferred until you actually retire and leave employment.  No further contributions will be paid into your fund after your normal retirement age (unless you and your employer agree otherwise) but interest will continue to accumulate until benefits become payable, when any capital growth bonus will be added.

Further information about any options which may be available to you can be obtained from your employee representative or the scheme administrators.

For how long will an annuity be paid?

Unless you choose to purchase a temporary annuity (e.g. the State Scheme Spreading Option), an annuity purchased under the Plan is payable for the rest of your life.

If you choose to purchase a dependant’s pension from the Plan payments will commence on the day following the date of your death and will be payable for life, unless the dependant is a child in which case the pension will normally cease when the dependant reaches age 18.

Annuities under the Plan are normally payable by monthly instalments in advance, and will normally be taxed.

What if I leave the Plan before my normal retirement age?

If you leave the Plan before your normal retirement age and are not entitled to an immediate benefit, your fund will be “paid-up”; i.e. no further contributions can be paid into the Plan but it will continue to accumulate interest until your normal retirement age.

What if I leave the Plan and die before the benefits become payable?

If you die after leaving the Plan but before your benefits become payable, your fund, including interest accumulated up to the date of your death and any capital growth bonus, may be payable to your beneficiary or dependants.

What if my preserved benefits from the United Kingdom Atomic Energy Authority final salary scheme become payable on ill-health grounds?

Although payment of your benefits is normally deferred until you reach normal retirement age, you will receive immediate payment of your benefits from the Plan, if your benefits from the United Kingdom Atomic Energy Authority final salary pension scheme become payable on ill-health grounds.

What if I have preserved benefits and I change my address?

Whilst your benefits under the Plan are deferred you will receive a statement of your fund every year. If you change your address at any time before your normal retirement age please inform both your former employer, through the employee representative and also the scheme administrators.

Can I transfer my Plan benefits to another pension arrangement?

As an alternative to having a deferred paid-up fund in the Plan, you can choose to have the cash value of your fund, as determined by Prudential, either:

  • transferred to your new employer’s scheme provided that the new scheme is willing to accept the transfer payment; or
      
  • transferred to a personal pension scheme, or to a suitable individual policy in your own name, with a life insurance company of your choice.

You may only choose to transfer your Plan fund if you choose similarly to transfer your United Kingdom Atomic Energy Authority final salary scheme benefits, and vice versa.


Maternity leave

Any period for which you receive statutory maternity pay or contractual pay from your employer will be treated as Plan Service and any benefits arising from that service will be calculated as if you had been working normally.

The contributions you will be required to pay to the Plan will be based on the amount you are actually paid during this period. However, your employer’s contributions to your fund for this period will continue at the level that would have applied if you had been working normally.

Can I use my Plan fund to secure a loan?

All benefits under the Plan are personal and cannot be offered as security for loans etc, or assigned, other than to a former spouse in order to comply with a Pension Sharing order.