Pension payment dates
Your pension will be paid on the last working Thursday of each month.
Your pension will be taxed in the same way as your earnings (you do not pay National Insurance Contributions on pensions in payment).
To protect your pension against inflation and the cost of living, the Trustee increases your pension each year in line with the relevant price index.
Future Changes to the Retail Prices Index
For some members of THUS Group plc Pension Scheme (THUS) , pensions in payment, in excess of Guaranteed Minimum Pension (GMP)*, increase in line with the Retail Prices Index (RPI). In some cases, revaluation increases that apply before retirement are also calculated in reference to the RPI. This is set out in the Scheme Rules (different minimum and maximum increase limits may apply depending on which scheme you were a member of before you joined the THUS Scheme) .
You may have heard that the UK Government has announced plans to make changes to the RPI. On 11 March 2020, the UK Statistics Authority (UKSA) and HM Treasury launched a consultation which looked at the option of reforming the RPI formula to align it with the inflation calculation for the Consumer Price Index including an allowance for housing (CPIH).
On 25 November 2020, the Government announced that the outcome of this consultation was that RPI would be calculated in a manner aligned with the calculation of CPIH from 2030.
What does this mean for me?
Depending on which section of the Scheme you're in and when you joined, the Scheme Rules may require increases to your benefits (before and/or after retirement) to be calculated in reference to RPI (subject to certain minimum and maximum levels).
The Trustee of the Scheme has a legal duty to ensure that benefits are paid in line with the Scheme Rules. This means that, where the Scheme Rules relating to your benefits refer to RPI-linked increases, any changes to the way in which RPI is calculated will automatically flow through to the increases you receive.
The Bank of England has suggested that increases in CPIH would likely be around 1% per annum lower than the current RPI. Pension benefits that are increased in line with RPI are therefore expected to increase at a potentially lower rate from 2030. If increases to your benefits are linked to RPI (this will depend on what section of the Scheme you’re in and when you joined), the increases to your pension from 2030 onwards may be lower than they would have been if the formula for calculating RPI had not been updated.
If you would like more information about how this change may impact you, please contact us.
Impact on the Scheme’s funding level
The planned changes to RPI are not expected to impact the Scheme's funding level. This is because, whilst the change to RPI may reduce the value of the Scheme’s liabilities, there is expected to be a similar impact on the value of the Scheme assets, which are invested broadly to match movements in the liabilities.
GMP is the part of your pension that reflects the extra benefit you would have received as part of your State Pension had the Scheme not been contracted out of the State Second Pension. The underlying principle for pension schemes that contracted out is that they must provide members with a minimum level of pension at ‘GMP age’ (age 60 for women and 65 for men) that corresponds to the pension members would have earned under the State Pension Scheme if the schemes had not been contracted out.
If you die in retirement
If you die after you’ve started receiving your pension, the following benefits will be paid:
Cash lump sum
A cash lump sum is paid to your beneficiaries if you die within five years of your retirement date. The amount paid would be the remainder of five years’ pension payments. Read Looking after your loved ones to find out about how you can nominate who you'd like to receive the cash lump sum.
The Scheme will pay your spouse or civil partner a pension of half the amount of your pension (before any reduction to your pension for cash sums or a dependant’s pension).
If you have children under the age of 18 (or 23 if they are in full-time education or training), they will receive a children’s pension. This is half the size of your spouse’s pension split between them if you have up to two children, or equal to your spouse’s pension split between them if you have more than two children.
If your address or bank details change
If you move house or change your bank details it is important to let us know. This is so we can make sure you continue to receive important messages about your pension and that your pension payments are made on time.
To make a change contact the Scheme Administrator.