Your Lafarge Pension - Lafarge UK PensionsSeminar... · Lafarge UK Pension Plan 20 February 2012 2...

Your Lafarge Pension

Lafarge UK Pension Plan

20 February 2012 2Lafarge UK Pension Plan

Your Lafarge Pension

� Depends on length of pensionable service

and Final Pay pensionable service

� PensionBuilderplus contributions

� Additional Voluntary Contributions (AVCs)

� Early Retirement, redundancy,

- Reduction Factor may apply


LUPP Pension - Example

Pensionable Service 20 Years

Final Gross Pensionable Pay £25,194

Less Lower Earnings limit £5,044

Final Pensionable Pay £20,150

Scheme Pension

20/60 x £20,150 = £6,716 per annum


BCRP and Alignment Pension -

Example

Pensionable Service 20 Years

Final Gross Pensionable Pay £25,194

Less Lower Earnings limit £5,044

Final Pensionable Pay £20,150

18 x 1.75% x £25,194 = £7,936

+

2/60 x £20,150 = £671

Total Pension = £8,607 per annum


Early Retirement

� Immediate Pension

�Early Retirement Reduction 4% per annum

�Tax Free Lump Sum Option


Tax Free Lump Sum Option

� Exchange part of your

annual pension for a one-off

tax free lump sum

� Normally 1/4 (25%) of the

value of your Pension


Pension pa x Actuarial Age Factor = Fund Value

£6,716 pa x 4 = £26,864

Pension pa Reduction for Cash Lump Sum Option

Lump Sum £26,864 ÷ by Commutation Factor 12 = £2,238 pa

Pension = £6,716 pa

or

Residual Pension = £4,478 pa

Plus a Tax Free Cash Lump Sum of £26,864

Tax Free Lump Sum Option - Example


Deferred Pension and PensionBuilderplus

Tax Free Lump Sum

� Final Pay Deferred Pension £9,000 p.a.

� Projected PensionBuilderplus account £52,000

� Tax Free Cash From Final Pay 9,000 x 4.54 = £40,860

� Tax Free Cash From PB+ 52,000 x 25% = £13,000

� Total Tax Free Cash = £53,860

� Final Pay Benefits

� Tax Free Cash Sum (£53,860 - £52,000) = £1,860

� Reduced Plan Pension £9,000 – (£1,860 ÷ 14.30) = £8,870 p.a.

� PensionBuilderplus Benefits

� Tax Free Cash Sum = £52,000


Tax Free Lump Sum (or more Pension)

� Advantages

� Tax free lump sum

� Taking cash reducesyour taxable income

� Taking cash does not reduce dependant’s pension

� Puts you in control and offers flexibility, (spending, debt, etc.)

� If you think you will not live long you may wish to have more money available now

� You may invest money and achieve a higher net income

� Make gifts while planning for estate and inheritance tax purposes

Dis-advantages

� You may not be able to afford to live on reduced income

� Loss of potential future increases on pension given up for cash

� You may consider exchange terms unattractive

� If your family tends to live longer than average

� If you are not good at managing money and fear that a lump sum may be unwisely invested or spent too quickly


Flexible Pension Option – For Former Blue Circle Retirement Plan Members Only

� Additional Flexible pension element paid temporarily until age 65 only

� State Retirement Pension payable by the government from State Pension Age

� Cost of this option is a reduction in immediate Plan Pension now and for the rest of your life

� If chosen this option will not affect spouse’s pension


Diversion of Redundancy Pay

� First £30,000 of Redundancy payment is currently tax free

� Amount over £30,000 is taxable (annual earnings limit)

� Amount transferred to Pension must be taken as ‘Tax Free Cash Sum’

� Additional Pension income cannot be purchased

CARE: - Annual Allowance limit of £50,000 may restrict the tax effectiveness of this option


Your Pension Options

� Option 1 - to receive benefit in annual pension only, Final Pay pension from Lafarge, PensionBuilderplus pension from chosen

insurance company.

� Option 2 - to receive the maximum cash sum available and a reduced pension. PensionBuilderplus account paid as part of the tax free cash sum.

� Option 3 - to receive a cash sum less than the maximumavailable and a higher reduced pension than option 2.

� Choose Maximum Flexible Pension Option – (BCRP only)


Retirement Declaration Form - Life Time Allowance (LTA)

� LTA % Calculation for Lafarge Pension

� Check that LTA maximum is not

exceeded - £1.5 million (2012/2013)

� Keep information safe as it may be

required on future tax returns


Payment and Tax

� Tax Free Cash Sum paid direct in to bank

account

� Annual Pension paid monthly with first

month pro-rata if applicable

� Bank / Building Society Account

� If P45 is not available, Basic Rate (BR) tax at

20% will be deducted until a new tax code is

issued


Death After Retirement

� Widows/er pension is usually 50% of pre-

commuted pension (before cash exchanged)

- a reduction if spouse is more than 10 years younger

� Increases - same as member

� Paid - same as member

� Balance of 5 year guarantee

� Nomination Form should be kept up-to-date


Pensioner Communications

� Monthly Pay Advice (only if requested)

� P60 Tax and Pay Certificate

� Summary Report & Accounts (PensionsTalk)

� Exclusive Telephone Helpline

� Website: www.lafargeukpensions.com

� Pensioner magazine (In Touch) annually

� Contact Link Scheme

(01306) 872100


Retirement Process

� Pension estimate given

� Final calculation of actual pension may not

begin until receipt of disinvested

PensionBuilderplus contributions

� Choose option on Pension Payment Authority Form

� Payment cannot begin until Retirement Declaration Form and bank details are received

� Tax-free lump sum paid direct into bank account


Retirement Process - continued

� Letter to pensioner to confirm chosen option

• Monthly payslip sent to home address (if requested)

• Pension from Lafarge paid monthly

• PensionBuilderplus pension paid by insurance company – as you requested

• If P45 is not available, Basic Rate tax (20%) will be deducted from pension until a new tax code received

• Pensioner Telephone Helpline 01306 872100


Pensions Consultative Council (PCC)

Type Constituency Number of

representatives

1 Cement 2

2 Aggregates & Shared Services 3

Em

plo

yee

rep

rese

nta

tives

1 Ex-Lafarge Redland Pension Scheme 2

Pen

sion

er

rep

rese

nta

tives

1 Non-Lafarge Redland Pension Scheme 3


Lafarge UK Pension Trustees Ltd

Directors

� Independent Chairman - Norman Braithwaite

� Employer Directors- Dyfrig James (President UK Cement,

Aggregates, A&C, Paving)- Nick Peall (Cement HR Director)- Jenny Honeysett (Cement Financial Controller)- Bob Andrews (Executive)

� PCC Directors- Paul Hunter (Cement)- Steve Taylor (Aggregates)- Lynn Clarke (Shared Services)- Arthur Cunningham (Pensioner)


Regulators

COMPLAINTS PROCEDURE

� Internal Dispute Resolution Procedure (IDR)

� TPAS - The Pensions Advisory Service

� Pensions Ombudsman

TPR – The Pensions Regulator

� PPF- Pension Protection Fund

DATA PROTECTION REGISTRAR


How can I trace an old pension?

� If you think you have contributed to a private pension before but have lost touch with the pension provider, the Pension Tracing Servicecan usually help by tracing it for you.

� You can call them Monday to Friday from 9am to 5pm on 0845 6002 537

Pension Tracing ServiceThe Pension Service

Tyneview ParkWhitley Road

Newcastle upon TyneNE98 1BA

Your Lafarge Pension - Lafarge UK PensionsSeminar... · Lafarge UK Pension Plan 20 February 2012 2...

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