benefits

Please note that before we can pay any benefits we may need to see your birth, marriage or civil partnership certificates.

Up to 1 December 2006 the Scheme's Normal Retirement Age was age 60. The Scheme's Normal Retirement Age is age 65 from 1 December 2006. With the employer and Trustee agreement an employee may continue to work and remain in the Scheme until age 75. Active membership is not available beyond age 75.

What are my benefits at retirement?

At retirement (normally the last day of the month in which you reach age 65) you can start taking your pension. Or you can take part of your pension fund as a cash sum with a lower level of pension. Please note that since 1 December 2006 there is no default age at which you automatically retire. With the Employers and Trustee agreement an employee may continue to work and remain in the pension scheme to age 75.

What will my pension be if I retire at normal retirement age?

Your pension is calculated as a proportion of your Final Pensionable Salary. The proportion is based on your pensionable service and depends on whether you're a lower or higher level member. Higher level members pay more contributions and get a bigger proportion of their Final Pensionable Salary as a pension.

How do you calculate a lower level pension?

For any pensionable service you complete as a lower level member, your pension is 1/80th (1.25%) of your Final Pensionable Salary.

If you were a member of the Scheme before 1 April 2004, any pensionable service you built up before that date will provide a pension of 1/60th (1.66%) of your Final Pensionable Salary.

How do you calculate a higher level pension?

For any pensionable service you complete as a higher level member, your pension is 1/60th (1.66%) of your Final Pensionable Salary. This includes any pensionable service you built up before 1 April 2004.

How do you work out my pension?

For any pensionable service completed whilst a lower level member, your pension will be calculated as

Pensionable service
               80                    x Final Pensionable Salary

For any pensionable service completed whilst a higher level member, or any pensionable service completed before
1 April 2004, your pension will be calculated as

Pensionable service
               60                    x Final Pensionable Salary

Can I take a lump sum?

When your pension starts, you can normally swap some of your pension for a lump sum. The maximum amount of tax free cash you can currently take is usually 25% of the capital value of your pension benefits.

This is a complex calculation and will also depend on the commutation factor applicable. A commutation factor is the factor we use to exchange part of your pension for cash. If you want further information about this option please contact us.

Your remaining pension must not be less than any Guaranteed Minimum Pension (GMP) payable - Kingfisher Pensions Department will tell you how much you are allowed to take as a lump sum. The value of any AVCs you paid can also be taken as a tax free lump sum within the applicable limits.

If you exchange some of your pension for a tax free lump sum generally your remaining pension will be lower. You should think carefully about the pension you need in retirement when deciding how much to take as a lump sum.

Please note that the option to change some of your pension for a lump sum is a one off opportunity at the time you put your pension in payment. You cannot exchange more pension for lump sum at a later date.

The Lifetime Allowance

There is a Lifetime Allowance limiting how much you can receive from your pension funds before there is a charge to tax. This includes the Kingfisher Pension Scheme and any other pension arrangements from which you have taken payment. The Lifetime Allowances for the period 2006 to 2011 are shown below.

A tax charge will apply on benefits taken in excess of these levels.

When you come to take your benefits we will ask you if your benefits from other pension arrangements exceed the Lifetime Allowance. You will need to provide this information to us and sign a declaration. We will let you know what percentage of your Lifetime Allowance your Kingfisher Pension Scheme benefit has used up.

Further details will be provided at retirement.

Calculation of the value of your pension fund from KPS

The capital value of your pension fund is calculated by multiplying the value of your annual pension actually taken (that is, after reduction for cash) x 20 and adding the lump sum cash. This is then compared against your available Lifetime Allowance. If you have not taken benefits previously from any other sources, your available Lifetime Allowance will be the standard Lifetime Allowance. Any amount in excess of the Lifetime Allowance would be subject to a Lifetime Allowance charge.

For example, for a member who is taking £3000 as pension and £9000 as a tax free lump sum the value of the pension fund is:

What if a pension is a small amount?

The Trustee has decided that all pensions that fall below the 'triviality limit' - which is 1% of the Lifetime Allowance - will be commuted (i.e. exchanged) for a one off taxable lump sum in settlement of all future pension instalments where you do not have any benefits from other pension schemes. This means that if your pension, is less than the 'triviality limit' a cash sum equal to the value of the pension will be paid when the pension is due to come into payment. However before this amount may be paid the Trustee must be satisfied that you have no benefits from other pension arrangements and that you are aged between 60 and 75 and you meet the relevant criteria applied to paying benefits in this way. Further details can be obtained on request.

If you have benefits from other arrangements that in total are below the triviality limit, you may also exchange your benefit for a one off lump sum, however this will be subject to the Trustee being satisfied that you meet the eligibility criteria.

Increases to Pensions in Payment

On 1 April each year, the Scheme increases your pension in payment in excess of any Guaranteed Minimum Pension (GMP) in line with the Retail Prices Index for the previous calendar year, up to 5% p.a if you retire before State Pension Age.

If any part of your pension relates to pensionable service completed before April 1997, it may include a GMP, to replace the pension you would have received from SERPS (the State Earnings Related Pension Scheme). Any GMP for service before April 1988 is increased by the Government and added to your State pension. Any GMP for service between 6 April 1988 and 5 April 1997 is increased by 3% or RPI if lower each year. This increase is paid with your scheme pension. In some years a bigger increase may be due, but any amount over 3% is paid by the Government and added to your State pension.

If your pension has been in payment for less than one year, then the first increase is a proportion of the full year's amount, based on the number of full months you have been receiving your pension.

What are my benefits if I retire early?

Your retirement benefits will be calculated using the same basis as shown (see How do you work out my pension?) but your pension will be reduced because it is being paid early, and it will be paid for a longer period of time.

Your pension is normally paid on the last day of the month in which you reach age 65. However, with your Employer's and the Trustee's consent, you can retire at any time after age 50. Please note that this will be age 55 for all retirements effective from 6 April 2010 unless you are granted an ill health pension (Click Here for further details).

If you no longer work for the Company, you may also be able to receive your pension at any time after age 50, subject to Trustee consent. Please note that this will be age 55 for all retirements effective from 6 April 2010 unless you are granted an ill health pension (Click Here for further details).

You should note that if your reduced pension does not cover the amount of GMP payable then it will not be possible to take your pension early. We will let you know if this affects you.

If you are an active member of the Scheme when you put your pension in payment between age 60 and 65 there will be no early retirement factor applied to your pension.

If you are no longer an active member of the Scheme when you put your pension in payment between age 60 and 65 an early retirement factor will be applied but only on service accrued in the Scheme after 1 December 2006.

You may be able to receive your pension before age 50 if you retire because of poor health (incapacity). See Changing Circumstances for further details.

What are my benefits if I leave service before retirement?

Normally if a member has less that two years pensionable service then they have the option of a refund of contributions. This still applies if you opted out of the scheme with less than two years pensionable service. You will automatically receive a refund of your contributions when your employment ceases.

Apart from the exception above as membership of the Scheme was not offered to new employees from 1 April 2004, a refund of contributions will no longer be an option. Instead you will be entitled to a deferred pension.

You can either:

• leave your pension in the Scheme - a deferred pension, or

• transfer your deferred pension to another registered pension plan.

How is my deferred pension calculated?

Your pension will be calculated as if you were retiring at normal retirement age, but based on the pensionable service you complete up to the date you leave the Scheme and your Final Pensionable Salary at that time. This is generally known as a deferred pension and you will be a deferred pensioner.

Each year, the Scheme increases deferred pensions in line with inflation, up to 5% p.a. between the date you leave and the date you retire.

If any part of your pension relates to pensionable service completed before April 1997, it may include GMP, to replace the pension you would have received from SERPS (the State Earnings Related Pension Scheme). GMPs are increased separately, as explained in the statement issued when you leave the Scheme.

How do I transfer my deferred pension?

Consider your options carefully. You may need special advice from an Independent Financial Adviser.

If you want to transfer, contact the Kingfisher Pensions Department for a quotation of the transfer value. This is the cash equivalent of your pension. The amount is not based on your contributions or those paid by the Company. Instead, it is the amount of money that the Scheme would need to set aside to pay your pension at normal retirement age. The basis for calculating the cash equivalent is reviewed by the Trustee, following advice received from the Scheme Actuary. The cash equivalent does not take into account any improvements that might be made to the Scheme in the future. It includes the value of the annual increases that would be awarded before and after retirement, but no allowance is made for any extra increases that might be payable in the future.

You do not have to transfer straight away. You can transfer the cash equivalent of your deferred pension at any time, up to a year before Normal Retirement Age. If you are interested in a transfer, you should contact the Kingfisher Pensions Department.

Please note that the transfer value is not the same as the capital value for Lifetime Allowance purposes.

Is the transfer value guaranteed?

We give you an indication of the transfer value when we send details of your deferred pension. This is an illustration and is not guaranteed.

If you contact Kingfisher Pensions Department, they will send you a 'Statement of Entitlement' showing the transfer value, guaranteed for three months. If the transfer is completed within three months, then we pay the amount shown on that Statement to your new pension plan.

If the transfer takes longer than three months, we will recalculate the cash equivalent and the new value could be lower. We may charge you a fee if you require more than one quotation in any twelve month period.