Your pension benefits
January 2017
Leaving with more than 2 years’ service
What you need to know
Introduction
This guide tells you what
happens to your pension
benefits if you leave
Abbott and:
• You have more than 2 years’
service as an active member
of the fund; and
• You leave before reaching
the minimum retirement age.
Additional options apply if you are
immediately eligible for an early
retirement pension. You’ll find more
about this in the Pension Retirement
Guide available from the website
www.abbottpensionfund.co.uk.
To help you find the right information
easily, we have divided the guide into
the following sections:
1. Leaving the pension
where it is
2. Pension transfer options
3. Taking benefits in the future
This guide is intended to be an easy
to read summary of the benefits
available. Full information is available
within the Trust Deed & Rules, the
legal document which sets out what
the benefits will be. Nothing in this
guide can override the Rules.
page 3
page 5
page 6
Leaving the Pension Guide 2
Leaving the pension in the Abbott Laboratories
Pension Fund (1966) – “The Fund”
By doing this you will become a deferred member
1.
What you need to know
Your pension
Because there is no individual pot
ofmoney, there is no investment risk
involved if you leave the pension in the
Fund. Your pension is calculated in line
with a formula linked to your level of
salaryand pensionable service when
you leave. Itwill then receive increases,
on the basis decided by the government,
currently in line with the Consumer Prices
Index (CPI) and up to a maximum increase
of 2.5% every year. These statutory
increases will be applied to your pension
each year on the anniversary of your
leaving service date.
There are trustees who diligently monitor
the funding level, the employer’s ability
to support the Fund and the investments
continually, to maximise the safety of
your benefits.
They have a legal duty to act in the
interests of the Fund’s members.
The amount of your pension will change
inline with the inflationary increases
givento it. Your pension will be completely
unaffected by investment returns from the
Fund from which all pensions are paid.
You will then be able to take your
pension benefits when you reach
NormalRetirement Age. If you leave
alegal Spouse when you die, they will
receive a Spouse’s pension.
The Fund does not issue yearly benefit statements
for deferred members. You can request a current
valuation at any time from the Administrator.
Retirement estimates can also be provided.
Leaving the Pension Guide 3
Your death benefits (having left the Fund)
If you joined the Fund before 1 June 2012 and there is a Spouse’s pension
payable, the lump sum will be equal to the higher of:
• The sum of your Voluntary Account (Additional Voluntary Contributions
Fund) PLUS an amount equal to the sum of pension payments which
would have been paid over a five year period as you had retired and
diedone day later: or
• The sum of your contributions (either paid as Ordinary contributions or
by Salary Exchange) with interest and the Member’s Voluntary Account
(Additional Voluntary Contributions Fund)
If you joined the pension before 1 June 2012 and there is no Spouse’s pension
payable, the lump sum benefit will be the greater of:
• The sum of your Voluntary Account (Additional Voluntary Contributions
Fund) PLUS an amount equal to the sum of pension payments which would
have been paid over a five year period as if you had retired and died one
day later; or
• The sum of the member’s contributions (either paid as Ordinary
contributions or by Salary Exchange) with interest and the Member’s
Voluntary Account (Additional Voluntary Contributions Fund); or
• An amount equal to the actuarial value of a notional Spouse’s pension
What you need to do
Initially, nothing. When you leave,
thePensions Department will notify the
Fund Administrator, Mercer Ltd, who will
write to you with details of your pension
benefits. These benefits will be preserved
(held for you) in the scheme and will
automatically become payable when
youreach age 65. Mercer will send you
aleaving service statement which will set
out how much pension you have built up
in the Fund, and what the options are in
relation to transferring. You should keep
this statement safe and notify Mercer of
any future change of address or
marital status.
Leaving the Pension Guide 4
Pension transfer options
You can do this at any time before you are expected to start takingthe pension
2.
What you need to know
As an alternative to leaving the pension in the Fund,
you can transfer your benefits to another pension
scheme. If transferring to a defined contribution
scheme you are required to take regulated financial
advice before the transfer can proceed, if the value
of the benefits exceed £30,000.
You should consider each of the two schemes on
their own merits and understand what each of those
schemes will provide before making a decision.
There are risks involved in transferring a pension
that promises to provide an inflation proofed income
for life and, beyond that, a possible future income
to a spouse. This may not be a straightforward
decision. There are a number of other different
factors that need to be considered. Some examples
are life expectancy, flexibility, death benefits, family
circumstances, debt position and other financial
resources to rely on in retirement. We would always
recommend that you seek regulated Financial Advice.
What you need to do
You can start the process by telling your new
scheme administrator or financial adviser that
you are interested in transferring your Abbott
Laboratories pension.
The first step is to find out your Cash Equivalent
Transfer Value (CETV), also known as the transfer
value. This can be requested once you have received
your leaving service statement from Mercer Ltd.
If the proposed transfer is to an occupational
pension scheme the CETV request to Mercer Ltd
can come from the new pension provider or scheme
administrator. If the request relates to transferring
your pension into a SIPP or a personal pension,
then the request should be made by the appointed
financial adviser.
CETV information must be provided within three
months of the date of the original request.
Leaving the Pension Guide 5
Taking benefits in the future
You can do this at any time from Normal Minimum Retirement Age
3.
What you need to know
If you draw your pension before Normal Minimum Retirement
Age the pension that has built up will be reduced to take into
account that it will be payable for a longer period oftime.
Different rates of early retirement reduction apply for service
pre and post 1 June 2008. Your pension, after reduction,
must be enough to cover any guaranteed minimum pension
(the contracted-out liability for any pension benefits built
up before 6th April 1997) that the scheme must pay to you
at StatePension Age. This requirement may limit how early
youcan draw your pension.
If you are thinking about taking your pension benefits early,
make sure you allow plenty of time to consider your options.
Ifyou have a date in mind as to when you want to start taking
your benefits, we would recommend that you request a
retirement quotation 12 weeks before this date. This will allow
sufficient time for your retirement pack to be prepared, and for
you to thenconsider and/or take advice on the various options.
Your Retirement Pack
Included in your pack:
• Personalised pension
options, including important
tax information
• Paperwork to complete if
you go ahead
• Confirmation of the
certificates needed before
your pension can be paid
Leaving the Pension Guide 6
What you need to do
Contact the Fund Administrator. You
should retain a copy of the statement that
confirms what percentage of the Lifetime
Allowance your pension has used up
as this information may be needed by
other pension providers before any other
pensions you have can be paid.
Glossary 4.
Spouse
The person to whom you are married or who is your Civil
Partner at the date of your death.
Ordinary contributions
A Member’s contributions to the Fund.
Salary Sacrifice contributions
An alternative method of paying ordinary contributions.
TheMember receives a reduction in salary equal to the level of
the pension contribution from the employer who then pays that
reduction into the Fund.
Self Invested Pension Plan (SIPP)
A UK government approved Personal Pension Scheme (PPS),
which allows individuals to make their own investment decisions
from a range of investments approved by HMRC.
Personal Pension Scheme (PPS)
Sometimes called a Personal Pension Plan (PPP), this is a UK
tax privileged individual pension arrangement with the primary
aim of building a pot of money that can be used to provide
income in retirement although it will usually also provide
deathbenefits.
Normal Minimum Pension Age
Currently, this is age 55. This is likely to increase in the future
and is set to rise to age 57 by 2028.
Leaving the Pension Guide 7
Need help?5.
More information is available from the Pensions
Officer by contacting:
01795 512921 ukpensions@abbott.com
Outside of Abbott, there are a range of services which
look to support you in making the right decision:
www.gov.uk
For information about pensions and pensioner benefits,
including planning for the future, whether you’re about
to retire or have already retired.
The site also covers State Pension information and advice.
www.moneywise.co.uk
Moneywise covers all the financial matters that impact
on your money and lifestyle.
www.pensionsadvisoryservice.org.uk
The Pensions Advisory Service (TPAS) has launched
a web-based tool aimed at helping people with their
choices and decisions when they come to retire.
www.moneyadviceservice.org.uk
The Money Advice Service website contains a wealth
of information and downloadable booklets on retirement
and retirement options; you can also find comparison
tables on products to help you compare annuities,
savings and investments.
How to find out more
information about your Fund
You will find information about the
Fund in a number of different places,
for example on Abbott Life and
MyHR. All of the information can be
found in one place on the Fund website
www.abbottpensionfund.co.uk.
Here you can download a copy of
the Members’ Guide, see information
about how the Fund is run, refer
to articles about Fund investments,
how AVCs work and much more.
If you joined the Fund before
1 March 2005 you should also refer
to the Members’ Guide supplement
which is specific to you.
Leaving the Pension Guide 8