contributions

How much do I contribute?

If you chose to be a lower level member, you pay 5% of your basic salary. You cannot change to higher level membership at any time.

If you chose to be a higher level member, you pay 7% of your salary. Remember that you have an opportunity each year, to change to lower level membership.

You receive tax relief on your contributions to the Scheme and you pay a reduced rate of National Insurance Contributions.

As you automatically receive income tax relief on your contributions, the contribution you actually pay will be reduced. Each £100 of contributions only costs basic rate taxpayers £78, and higher rate taxpayers £60 for the tax year 2006/2007.

How much does the Company contribute?

The Company contributes the balance of the overall contribution rate recommended by the Actuary.

The Company's contribution rate varies from time to time following regular valuations of the Scheme. A full actuarial valuation is carried out at least every three years by the Actuary and the funding position is reviewed annually. This helps us to ensure that the Scheme has sufficient funds to pay the promised retirement benefits.

Scheme Specific Earnings Cap

The Scheme operates a Scheme Specific Earnings Cap. For the year 2006/2007, the cap will be £108,600 and this will be increased each year in line with the Retail Prices Index. The Scheme Specific Earnings Cap limits the earnings used for pensionable purposes. Therefore earnings in excess of this cap will not be pensionable in respect of Employers contributions and Employee core contributions, but beyond that members can pay AVCs as shown below.

How do I pay my contributions?

The Company deducts your contributions directly from your pay. The deductions section of your payslip will show the amount of your regular contribution.

Can I pay extra contributions to increase my benefits?

Yes, you can pay Additional Voluntary Contributions (AVCs).

You receive tax relief on your total contributions to all registered pension schemes subject to certain allowances.

You will currently be able to contribute up to £3,600 or 100% of earnings if greater, subject to the Annual Allowance. The table below shows the Annual Allowance for all contributions to registered pensions on your behalf. This includes personal pensions, stakeholder pensions and Additional Voluntary Contributions. It does not apply in the year in which you take your benefits in full. Contributions paid up to the Annual Allowance will receive tax relief.

You are liable to a tax charge of 40% on pension contributions in any tax year that are higher than these levels.

AVCs can help you build a bigger entitlement, especially if:

• you did not start saving for retirement until later in life or you have little other retirement savings; or

• you have periods where you were not working or saving for retirement; or

• you would simply like an extra pension/cash when you retire.

AVCs can also be used to increase the pension paid to your spouse or your dependants after your death. AVCs can be used to either provide more pension or more cash.

Please note that since 6 April 2006 AVCs can be taken as cash. The restriction in place previous to this date, that AVCs paid after April 1987 need to be taken in pension form, has been removed.

We have separate information and fact sheets with regard to the funds available under the Kingfisher AVC Scheme along with an application form; you can get a copy from your HR contact or from the Kingfisher Pensions Department. Documents can also be downloaded from our website at www.kingfisherpensions.com.