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Retirement Benefits
TAKING YOUR BENEFITS AT RETIREMENT
At retirement you can use the funds available in your Member Account to provide retirement benefits as shown below.
You can take your retirement benefits from the DC Section at any time from age 55 although if you are still in service employer consent is required. Members with savings in a DC Member Account have greater flexibility in how they use their pension savings as summarised in the table below:
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Value of your Member Account |
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Pension income (Annuity)
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100% Cash (Single cash lump sum) |
100% Cash (Multiple cash lump sums) |
Flexible income (Income drawdown)
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The option of taking up to 25% as a tax-free lump sum (taken upfront)
plus
Balance used to purchase an annuity from an insurance company. An annuity provides a secure income for life. You can choose between a fixed or increasing annuity. Income is taxed at your marginal rate |
Entire Member Account can be taken as a single cash lump sum. 25% will be tax free, with the remainder taxed at your marginal rate
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To manage the tax your Member Account can be taken as cash in up to 3 instalments over consecutive tax years
Each cash lump sum taken will consist of 25% tax-free cash with the remainder taxed at your marginal rate
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The option of taking up to 25% as a tax-free lump sum (taken upfront)
plus
Balance drawn down as income as required. You keep your savings invested and withdraw cash (taxed at your marginal rate) as and when you need it
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Available from the BSPS DC Section
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Not available from the BSPS DC Section – you would need to transfer your savings out of the Scheme |
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Ill-health retirement
If you meet the Ill health condition the following benefits may be paid by your employer through an insurance policy held by the Principal Company:
- income protection for up to two years; followed by
- a lump sum payment of two times Pensionable Earnings (2012) if you continue to meet the eligibility criteria and leave employment.
You can draw your retirement benefits from the DC Section below the age of 55 if you meet the Ill health condition.
Late retirement
You can take your retirement benefits from the DC Section later than age 65 if you wish. Contributions will continue to be payable by you and your employer if you continue in service.
If you decide to defer taking your pension then your Member Account will remain invested until such time as you decide to take your benefits.