The pensions world is always changing and it can be hard to keep up. Make sure you’re in the know with the latest news surrounding pensions and your scheme.
You can also find out how to change your details and where to address specific queries so that you’re prepared when you retire.
How do I change my details?
Whether you’re changing your bank details or your address details, you need to inform us in writing, and your letter will need to be signed.
The address to write to is:
Vaillant Group Pension Scheme
Alternatively you can scan in your letter and email it to the Pensions Department.
Don't forget, if you're currently employed by Vaillant, you'll also need to let HR know.
Do the new rules about pension flexibility apply to this Scheme?
This scheme is called a final salary, or defined benefit scheme. It means that the benefits you build up are calculated using your salary while you were in the Scheme, and how long you were in the Scheme for.
You will have received a benefit statement confirming the annual amount of pension you built up within the Scheme.
The pension flexibilities, announced in April 2015, gave people with money purchase, or defined contribution benefits more choices. These benefits built up in these types of schemes are individual pots of money, where each member (and sometimes also their employer) pay in contributions.
Those contributions build up, and on retirement the member chooses how that pot of money will fund their retirement (within what is allowed by law).
If you wish to gain access to these flexibilities using the benefits you have earnt in this Scheme, you would need to transfer your benefits out. Please see Transfers out for more information.
You can find out more about pension flexibilities at Pension Wise, the Government’s guidance website.
Neither the Trustees nor the Pensions Department are able to advise you on your personal tax position. For assistance, you should speak to an Independent Financial Advisor (IFA).
You can find an IFA in your local area by visiting Unbiased.
Can I take all of my pension as cash now?
You may be able to take all of your pension as cash now, if:
- You are over age 55 and have a small pension;
- You are seriously ill, and are not expected to live longer than 12 months.
If you would like to ask about either of these options then please contact the Pensions Department.
When you retire from the Scheme, you may be able to swap some of your pension for a tax free cash lump sum. You can request payment of your pension from age 55. Please visit Taking your pension for more details.
You can request payment of your pension before age 55 if you meet the Scheme’s requirements for ill health.
How do I trace a lost pension?
You can trace a lost pension by using the Government’s free tracing service.
Where do I find out more about my state pension benefits?
You can find more information about your state pension benefits on the Government website.
What does it mean if I have been a member of a contracted out pension scheme?
While the Scheme was open for members to build up pension benefits, it was a ‘contracted out’ scheme. This meant that whilst you were an active member you paid lower National Insurance contributions, but built up fewer State Pension benefits. You can find out more on the Government website.
What are the tax restrictions on building up pension benefits?
At the current time, members of registered pension schemes receive tax advantages on the money they pay into those pension schemes, and the pension(s) they receive in retirement are taxed as income.
However, there are certain limits around the tax advantages of paying money into a pension scheme. These are called the Annual Allowance and Lifetime Allowance, and more information on these can be found below.
Annual Allowance (AA)
The AA is the limit on the amount of pension savings someone can make in a tax year before a tax charge (the AA charge) applies. This includes pension savings someone else makes on that person’s behalf e.g. their employer.
The current AA is £40,000, unless you have income over a certain amount.
If a person’s total income for a tax year is over £150,000 (referred to as ‘adjusted income’ and includes employee and employer pension contributions) their AA is reduced on a tapered basis. This change applies from tax year 2016 to 2017 onwards. Those with total taxable income (excluding pension contributions) below the threshold of £110,000 will not be affected by the taper.
The total taxable income includes:
- Earnings from employment
- Earnings from self-employment
- Most pensions income (State, occupational and personal pensions)
- Interest on most savings
- Income from shares (dividend income)
- Income from a trust
- Pension savings for the tax year concerned (for adjusted income, not threshold income)
For those affected by the tapered AA, their AA will be reduced by £1 for every £2 of total income they have over £150,000, subject to a maximum reduction of £30,000.
The AA charge recoups the tax relief given to your pension savings that are over the AA for a tax year.
Lifetime Allowance (LTA)
The LTA is the limit on the amount of pension savings someone can make over their lifetime before a tax charge (the LTA charge) applies. This includes pension savings someone else makes on that person’s behalf e.g. their employer.
The LTA limit from 6 April 2016 has been set at £1 million (under some circumstances a person may protect their LTA at a higher level).
To compare a person’s pension entitlements against the LTA, any final salary entitlement is multiplied by 20, and any defined contribution pension funds are added to this amount. The LTA is usually expressed as a percentage.
- If the savings that exceed the LTA were taken as pension, the LTA charge would be 25% in addition to the income tax due. Basic rate income tax is currently 20%. The exact monetary amount of the tax charge would depend on the amount of pension purchased with these excess funds.
- If the savings that exceed the LTA were taken as a lump sum, the LTA charge would be 55%.
Can both the AA and LTA charge be applied to the same fund?
Yes, this can happen. Where funds are subject to both the AA and LTA charge, there will be an AA charge of up to 45% on the value of pension contributions being paid into a pension fund, then up to a 55% LTA charge on the payments coming out of the pension fund, equalling a total tax charge of 95%.
Who is out there to help me?
If you need some help the following people may be able to help you:
If you feel you need Independent Financial Advice, you can find an advisor in your area by using Unbiased
What are the Rules of the Scheme?
The Scheme is governed by a legal document known as the Trust Deed and Rules. The Trustees are responsible for ensuring that the Scheme is run in accordance with the Rules.
Whilst every care has been taken in preparing this information to cover the main benefits of the Scheme, it is a summary of the full Trust Deed and Rules. If there are any differences between this information and the Trust Deed and Rules, the terms within the Trust Deed and Rules will apply. You can request a copy of the Rules by emailing the Pensions Department on email@example.com
Do any members have special provisions?
Special provisions may apply to your pension benefits if you:
- Joined the Scheme before 6 April 1997;
- Were a member of the Hepworth Superannuation Scheme prior to 6 April 1990; or
- Transferred in pension rights from a previous arrangement.
If you think this applies to you, and you would like to find out more please contact the Scheme administrator at: firstname.lastname@example.org
The way in which Final Pensionable Earnings are calculated changed from 6 April 2003. For people who were members of the Scheme before that date, a check is carried out on their benefits from the Scheme to make sure that the pension earnt up to 6 April 2003 is still calculated on the old basis.
Can the Scheme be changed or ended in the future?
The Company for the Scheme intends on keeping the Scheme in place for the foreseeable future, but the documents setting up the Scheme (the Trust Deed & Rules) allow for the amendment or termination of the Scheme at any time.
If the Scheme is terminated, the Trustees will use the Scheme’s assets to provide benefits in accordance with the Rules of the Scheme and the law at that time.
You may also want to read about the health checks which are carried out regularly on the Scheme, these can be found in the Scheme Newsletters.
How safe are my benefits in the Scheme?
The Scheme has regular health checks on whether it is holding enough money for the pension benefits members have earnt. You can find out more in the latest Scheme Newsletter.
How can I make a complaint?
If you are unhappy about anything in connection with the Scheme, please can you contact the Pensions Department so we can look into your concerns.
If you are still not happy after this, you can start the Scheme’s formal complaints procedure, which is called the Internal Disputes Resolution Procedure (IDRP). This is a two stage process, and further information on this can be obtained by contacting the Pensions Department using the contact details shown above.
If, after you have been through the Scheme’s IDRP, you wish to take the complaint further you can contact the Pensions Ombudsman. Please note, the Pensions Ombudsman will not normally consider your complaint unless you have been through the Scheme’s IDRP first.