SHPS | Defined Contribution

All employees between ages 16 to 64 of a participating employer can join, by completing an Application Form, unless otherwise advised by the employer. You should check with your employer whether you have to complete a minimum period of employment before you are offered the chance to join the Scheme (this will never be more than 12 months after you started work).

You must agree to be bound by the rules of the Scheme, and you must pay the minimum contributions your employer requires. You can't assign your pension rights - for example, as security for a loan.

If you opt out of the Scheme, and remain working for your employer, you may rejoin at any time but this may be subject to restrictions being placed on any benefits due in the event of your death.

You should check this with your employer. If you want to, you can pay more than the minimum your employer requires.

Your contributions will be an agreed percentage of your salary.

A charge of 0.5% of the value of your fund will be deducted each year to cover expenses and investment costs.

At retirement if you choose to purchase an annuity through the Trust's appointed financial advisers a fee of £279.56 plus VAT will be deducted for this service from any retirement cash lump sum.

Please note that the fee for purchasing your annuity will be taken from your retirement cash lump sum.

You will receive an annual benefit statement which will show you details of how your savings have grown over the year and the value of your savings. You can request a fund value update at any time by contacting the Administration Team at The Pensions Trust.

You can use the pension modeller on the website to get an idea of the amount of pension your savings might buy you at retirement. There is also a budget calculator which you can use to help you calculate your income and expenditure in retirement.

It's never too soon to start saving for your future. The sooner you start, the better chance you have of saving more and your savings growing to provide you with a higher income in retirement.

The investment section of the website gives you an overview of the things you need to consider before choosing where to invest. Your choices will depend on a number of things, such as your attitude to risk and how far you are from retirement. If you don't feel like you can make a decision about your investments you can choose the Lifestyle option.

If you select the Lifestyle option your contributions will be invested in the Managed Fund if you are more than five years from your selected retirement date (SRD). From five years before your SRD your existing savings and new contributions will be automatically switched in defined portions into the Pre-Retirement Fund. Please refer to the Fund fact sheets for more information.

Yes - request or download a Switch Instruction Form.

At retirement, you use your savings to buy a pension (also known as an annuity). An annuity is an agreement with an insurance company to pay you an income until you die. The amount of pension you can buy will depend on the amount you have saved, your age, the cost of buying an annuity and your choice of annuity - for example, whether you want to provide an income for your dependants and if you want your pension to increase in retirement.

You can select the insurance company to use to provide your annuity. Alternatively, The Pensions Trust has engaged a firm of financial advisers who can assist you in the purchase of your annuity. The charge for this service is currently £279.56 plus VAT which will be taken from your pension commencement lump sum (or your fund value if you do not elect to take a cash lump sum).

Six months before your Normal Retirement Age (NRA) we will contact you with details of your current fund value and provide access to Hargreaves Lansdown's retirement calculator so that you can estimate how much pension you are likely to receive.

Three months before your NRA we will contact you again with a retirement pack which will contain the following:

• the current fund value;
• an annuity quotation. This is not guaranteed;
• the options you may select. You are normally allowed to take up to 25% of your fund as a cash lump sum which is tax-free under current legislation. The balance of the fund will be used to provide a pension. As pensions are provided by the purchase of an annuity it may be necessary in some cases to restrict the cash that can be paid to ensure the minimum required to purchase an annuity remains. (This is currently £1,000 with additional charges of £279.56 plus VAT. The charges are taken from any retirement cash lump sum payment taken);
• information about the decisions you need to make regarding the annuity, such as which annuity provider to use and what type of annuity to purchase (spouse's benefit, annual increases, etc);
• the likely timescales for settlement of benefits. 

The options available depend on the length of your pensionable service.

If you have:

• less than three months service - you will receive a refund* of the value of your own contributions less tax.
• more than three months and less than two years service - you can receive a refund* of the value of your own contributions less tax or transfer the value of the whole fund to another registered pension arrangement. The transfer option lapses three months after leaving the Scheme and a refund will be paid automatically.
• two or more years service - your fund will remain in the Scheme and continue to be invested until you retire or decide to transfer the value of the whole fund to another registered pension arrangement.

You can leave the Scheme at any time by giving notice to your employer.

* A refund is not available if you have more than two years' pensionable service in total, including previous pensionable service in SHPS or another scheme at The Pensions Trust, and/or transferred-in benefits from another scheme. A refund is also not available if a transfer value has been received for you from a personal pension or a stakeholder pension plan.

The normal pension age for the SHPS defined contribution (DC) structure is 65. When you joined the Scheme, you selected a retirement date (SRD) after age 55 years. Your SRD does not have to tie in with the retirement age in your contract of employment and you can retire at any age after age 55 years if you want to. However, you must cease to contribute to the Scheme at age 75 but there is no requirement for you to take your retirement benefits at this date.

It is important that you understand the timescales as, unlike defined benefit (DB) schemes, it is unlikely that benefits can be paid out on your actual retirement date. This is because if you remain in the Scheme right up until your retirement date, the final contribution will not be paid into the Scheme until after that date. The benefits payable are determined by the final value of the fund which includes the final contribution. Please bear in mind if you are making financial decisions around your retirement dates that there may be a delay before your benefits are paid.

To speed up the process please respond to any requests for information quickly. If you are retiring at any time before or after your Normal Retirement Age (NRA), please get in touch as soon as you know so that the process can begin.

If you were to die while still working and saving for your pension your dependants would receive a lump sum death benefit of three times your pensionable earnings at the date of your death and the value of your fund.

If you were to die after you have stopped contributing the value of your fund would be returned to your dependants.

The benefits your dependants receive after you retire depends on the type of annuity you purchase with an insurance company. To ensure the money goes to the right people you should complete a Nomination Form.

If your employer offers it, you can pay AVCs into the defined contribution (DC) structure of SHPS. Please click here to download an AVC Application Form.

If your employer has made special arrangements with the Trust regarding alternative products for AVCs, then please contact your employer for further information regarding this.