Pension plan
Member booklet
Member booklet
How do I maintain a good standard of living in retirement,
and ensure I am protected if I have to stop working due to ill
health and that my family are financially secure when I die?
The Edinburgh Airport Pension Plan helps you with all the above, offering:
• a pension income at retirement
• an optional tax-free cash lump sum at retirement
• protection for your family after your death
• pension benefits should you be forced to retire early through illness or injury
Over 12 million people in the UK are not saving enough to have a good standard of living at retirement and many
of these have no insurance to cover them for ill-health or to help support their family in the event of their death.
We can help you make sure that you are not one of them.
NOTE
This booklet describes the benefits in the Edinburgh Airport Pension Plan for staff members who joined the BAA Pension
Scheme on or after 1st April 1991. If you are a fire service member and / or you joined the BAA Pension Scheme before
1st April 1991 please refer to the separate leaflets for details of the key differences that apply to you.
1
Useful Contacts
The Plan is administered on behalf of the Trustee by Lane Clark & Peacock LLP.
Please contact the Pensions Team at LCP:
•
•
•
•
for any questions relating to benefit illustrations
if you are considering drawing your pension
to update your personal details, for example if you move house
for copies of the Plan’s official documents, such as the Report & Accounts,
Statement of Investment Principles or Trust Deed & Rules.
Edinburgh Airport Pensions
Lane Clark & Peacock LLP
30 Old Burlington Street
London W1S 3NN
Tel: 020 7439 2266
Email: [email protected]
Please contact:
Edinburgh HR
Capital House
Edinburgh Airport
Edinburgh
EH12 9DN
Tel: 0131 344 3232
Email: [email protected]
• for any queries relating to payroll deductions
• if you wish to opt out of the Plan;
• if you wish to complete or update your Expression of Wish to register
who you would like to receive benefits in the event of your death.
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Contents
This is the explanatory booklet for the Edinburgh Airport Pension Plan. It is based closely on the wording in the
BAA Pension Scheme booklet. This should make it easy for all those who transferred their benefits from the BAA
scheme when the Plan was created to understand the basis on which the benefits and contributions have been
replicated at the time of transfer.
Further information for Fire Service employees and members who joined the BAA Pension Scheme
before 1st April 1991 is included in additional leaflets provided to these employees.
Confused about pension terminology?
At the back of this booklet in the glossary you will find definitions of some ‘key terms’.
Every time these terms appear they are capitalised.
1.
Rewarding your hard work
6
2.
In sickness and in health
8
3.
Protecting your family
9
4.
Supporting your membership
10
5.
Special information for part-time employees
11
6.
Your questions answered
12
7.
General Information
13
8.
State Pension Benefits
15
9.
Glossary
16
Every effort has been made to ensure that this booklet is an accurate summary of the Plan at the date of issue (March 2013). It is, however, only a
summary and precise details of the benefits and the provisions governing the Plan are contained in the Trust Deed and Rules of the Plan (as amended
from time to time). In the event that there are any differences between the provisions described in this document and the Trust Deed and Rules, it is
the Trust Deed and Rules which take precedence. You can obtain a copy of the Trust Deed and Rules from the Plan administrator, Lane Clark & Peacock
LLP, whose details can be found opposite.
3
1. Rewarding your hard work
1.1. Benefits at retirement
1.1.1. What pension will I receive?
The Edinburgh Airport Pension Plan offers you valuable
benefits at retirement, including a regular pension income
and the option of a tax-free cash lump sum.
• You may retire from the Company and take your
pension on your 60th birthday (your Normal Pension
Date), although you may choose to stay in service
after this date.
• You will receive a proportion of your Final Pensionable
Salary for each year of service, up to a maximum of 36
years. The pension will be paid for the rest of your life
and will increase each year by 5% or by the change in
price inflation if less. The trustees may grant additional
increases if they choose, with the Company’s consent.
• As your Pensionable Salary does not include any shift
pay, if you are a shift worker you will build up an
additional Shift Credit each year which will add to the
level of Pensionable Service to increase the pension
you will receive at retirement.
• You may exchange some of your pension income
in return for a tax-free lump sum at retirement.
1.1.2. As a shift worker, how will the additional amount
of pension I will receive in relation to my shift pay be
calculated?
Your Pensionable Salary does not include any shift pay.
Therefore, to ensure your pension takes into account the
additional amount you earn in shift pay, you will receive
a Shift Credit each year, that is added to your Pensionable
Service when calculating the pension benefits you will
receive at retirement.
You can use the following calculation to work out
the pension you will receive at retirement:
At the end of the year, Pensionable Salary is £15,000
and the member has received shift pay of £3,000.
The additional amount of Pensionable Service earned
(Shift Credit) over that year would be calculated as follows:
Final Pensionable Salary x
Pensionable Service (max 36 years)
54
Don’t forget that you will pay tax on your pension
income, in the same way that you do on your income
from employment. The tax will be deducted from your
pension payments before you receive them.
Example:
A member has an annual salary of £20,564.
For the purposes of the example, it is assumed that
the salary figure does not change over the year and
that the Lower Earnings Limit is £5,564. The member’s
Pensionable Salary is worked out as:
This Shift Credit is calculated as follows:
365 (days) x Annual shift pay = number of days Pensionable Salary
shift credit
Shift Credits will be added each year that you receive shift
pay. If you stop shift work, then you will not earn any
more Shift Credits, but credits you have already built up
will count towards your Pensionable Service.
Example:
A member has an annual salary of £20,564 (excluding
shift pay). The Lower Earnings Limit is £5,564.
365 x 3,000 = 73 days
15,000
1.1.3. How do I work out what cash sum I might receive?
You may exchange some of your pension income in return
for a tax-free lump sum at retirement.
The amount of cash you can take is restricted by HM
Revenue & Customs. The maximum amount of tax-free
cash you can receive from the Edinburgh Airport Pension
Plan is restricted to 25% of the total value of your benefits
after any cash is taken, or 4.4 times your first year’s pension
income. You will be provided with details of the maximum
tax-free cash sum that you can take near to your retirement.
£20,564 - £5,564 = £15,000 a year
A member whose Final Pensionable Salary is £15,000,
who retires at age 60 with 36 years’ Pensionable Service.
The retirement pension is:
£15,000 x 36 = £10,000 a year
54
Technical details
If you are a shift worker, Shift Credits can take
your Pensionable Service over the normal maximum
of 36 years.
4
Guideline figures:
First year’s pension income
Maximum tax-free cash
Reduced first year’s pension
£10,000
or
£44,000
and
£6,615
£15,000
or
£66,000
and
£9,923
£20,000
or
£88,000
and
£13,230
£25,000
or
£110,000
and
£16,538
1.1.4. If I take a cash lump sum, how will this affect the
pension I will receive?
For each £13 of cash taken your pension will be reduced
by £1 a year.
1.1.5. Can I retire early?
Yes. You can start taking your Edinburgh Airport pension
at any time after the age of 55. If you joined the BAA
Pension Scheme before 6th April 2006 and retire directly
from service you can start taking your Edinburgh Airport
pension at any time after the age of 50. The pension you will receive will be based on your
Pensionable Service and Pensionable Salary when you
retire. However, as you are retiring early and your pension
will therefore be paid for longer, your pension will be
reduced by 1/3% for each complete month by which you
are under the age of 60 (that is 4% for each complete year).
1.1.6. What if I work for Edinburgh Airport past the age
of 60?
You can continue to contribute to and earn benefits in the
Plan (up to a maximum of 36 years Pensionable Service)
and take your pension when you stop working.
1.1.7. How will I receive my pension?
Your pension will be paid monthly in arrears, directly
into your bank or building society account.
Example:
A member retires after 27 years’ Pensionable Service
aged 57, with a Final Pensionable Salary of £15,000.
The early retirement pension is:
£15,000 x 27 = £7,500 a year less early
54 retirement deduction
For 3 years’ early retirement, this deduction is 12%
(4% x 3 yrs):
1.1.8. What increases will my pension receive in payment?
Once in payment, your pension (other than any Guaranteed
Minimum Pension) will be increased each year by 5% or in
line with the change in price inflation if less.
If you joined the BAA Pension Scheme before April 1997
then part of your pension earned before that date will be
what is called Guaranteed Minimum Pension (“GMP”) as a
result of being contracted out of the State Second Pension.
This will represent only a small part of your total benefit,
and the increases in payment are prescribed by statute.
In general, GMP earned before 1988 will not be increased
by the Plan, and GMP earned between 1988 and 1997 will
be subject to a maximum increase of 3% pa. The interaction
of GMP and your State benefits is complex, but in some
cases you may receive additional increases on your State
pension as a result of having GMP in the Plan. Please contact
LCP if you need further assistance with this.
The Trustees and the Company may agree to grant
additional increases.
Technical details
Because pensions are a tax-efficient way for you to save
for your future, the Government restricts the amount
of pension savings that you can build in your lifetime
without incurring additional tax. This is known as the
Lifetime Allowance. This allowance is high enough not
to affect most people – in April 2013, the limit was £1.5
million, it is due to fall to £1.25 million from April 2014.
To calculate the value of your pension savings you
should multiply the annual pension income you expect
to receive by 20. Using the example on this page, an
annual pension income of £6,600 would equate to a
total pension saving of £132,000. If you are approaching
the Lifetime Allowance you may wish to take financial
advice on the best course of action for you.
£7,500 x 12% = £900.
Therefore, the pension will be
£7,500 - £900 = £6,600 a year
5
2. In sickness and in health
2.1. Ill-health benefits
Not everyone is lucky enough to remain in good health
throughout their working life. The Edinburgh Airport
Pension Plan enables you to take a pension should you
have to retire early due to ill health or injury.
• If you are retired by the Company because you are
unable to continue with your current employment or any
other occupation, you will be able to take your pension
benefits early without penalty. Your pension will be
based on your Pensionable Salary at the time of your
ill-health retirement and the length of service you would
have completed had you continued working for the
Company until your Normal Pension Date.
• If you are retired by the Company because you are
unable to continue to work in your current role or any
other role with Edinburgh Airport due to ill-health or
injury, but you could work for another employer, you
will receive a pension based on your Pensionable
Salary at the date of your ill-health retirement and
an enhanced period of Pensionable Service.
2.1.1. What pension benefits would I receive if I can
no longer work for Edinburgh Airport, or in any other
occupation?
This is referred to as ‘total incapacity’. If you are retired
by the Company because of total incapacity the benefits
you will receive are calculated as for normal retirement,
but using your Pensionable Salary at the date of ill-health
retirement and the level of Pensionable Service you would
have completed if you had worked for Edinburgh Airport
until your Normal Pension Date.
As with normal retirement, you will be able to give up
some of your pension in return for a tax-free lump sum.
2.1.2. And what might I receive if I couldn’t work for
Edinburgh Airport, but may be able to take another job
or do some other form of paid work?
This is known as ‘partial incapacity’. If you are retired by
the Company due to partial incapacity the benefits you
will receive are calculated, using your Pensionable Salary
and completed Pensionable Service at the date of your
ill-health retirement, but assuming you had completed an
extra five years’ Pensionable Service (or up to your Normal
Pension Date if you are within 5 years of that date).
2.1.3. Will the pension I receive if I retire early due to
ill-health take into account any shift pay I might have
received had I not retired due to ill health?
Yes. If you are a shift worker your Pensionable Service will
be calculated assuming that you would have continued to
receive the same amount of shift pay and build the same
level of Shift Credits that you received in the year to the
date of your ill-health retirement.
So, if you received 73 days Shift Credits in the year
to the date of your ill-health retirement, your ill-health
pension would be calculated assuming you receive 73 days
Shift Credit for each year of enhanced Pensionable Service.
2.1.4. Will my age affect whether I can receive an ill-health
pension?
No. If you are suffering from serious ill-health or incapacity,
you can be retired by the Company and start receiving an
ill-health pension at any age.
Technical details
The Company and Trustee will take full medical advice
before agreeing to the payment of an ill-health pension.
If you are retired due to ‘total incapacity’ and then
become able to undertake further employment, the level
of ill-health pension may be reduced or, in the case of
your ability to return to full work, stopped.
There is an overall maximum of 36 years of
Pensionable Service that can be used to calculate
your ill-health pension. If you are a shift worker, Shift
Credits can take your Pensionable Service over the
normal maximum of 36 years. The enhanced period of
Pensionable Service must not exceed the Pensionable
Service that you could have completed up to your
Normal Pension Date had you not had to retire early
through ill health.
6
3. Protecting your family
3.1. Death benefits
The Edinburgh Airport Pension Plan offers a generous level
of life cover to help you provide for your family after your
death.
• The benefits that would be payable depend on whether
you die while employed by the Company, after leaving
the Company (but before retirement) or after retirement.
• A pension will be paid to your Spouse or a Registered
Civil Partner and any Eligible Children.
• If you die while you are still working for the Company
and contributing to the Plan, a cash sum will also be
payable.
• If you die leaving Eligible Children but no Spouse or
Registered Civil Partner, then the rate of any children’s
pensions payable will be increased by one third.
3.1.1. What if I die while employed?
Cash lump sum – A cash lump sum equal to four times your
annual salary at the date of your death will be payable.
If you are a shift worker, an additional amount equal to
four times the rate of your shift pay at the date of your
death will also be payable. You can nominate who you
would like to receive this benefit and how you would like
the cash sum to be split between them.
Partner’s pension – Your Spouse or Registered Civil
Partner will be paid a pension of two-thirds of the pension
you would have received had you continued working until
your Normal Pension Date. If you are a shift worker, this
pension will be calculated taking into account additional
Shift Credits you would have received had you continued
with the same level of shift work you were undertaking as
at the date of your death.
Children’s pensions – Eligible Children will receive a
pension of up to one quarter of your partner’s pension.
And, if you die leaving children but no Spouse or
Registered Civil Partner, the rate of the children’s pension
will be increased by one third.
3.1.2. What if I die in retirement?
Your Spouse or Registered Civil Partner and any Eligible
Children will receive a pension from the Plan.
Your partner’s pension will be two-thirds of the pension
you were receiving at the date of your death. Any
children’s pensions are calculated in the same way as
they would have been if you had died while employed.
If you die within five years of retiring, the pension you
were receiving, together with any increases that would
have been applied, will be paid to your Spouse or
Registered Civil Partner for the remainder of the five
years, before these terms apply.
3.1.3. What if I die after I have left the Company but
before retirement?
Both a partner’s pension and children’s pensions are
payable. A partner’s pension would be based on 50%
of the benefits you have built up in the Plan at the date
of your death; children’s pensions would be calculated
in the same way as they would have been if you had
died while employed.
3.1.4. How do you know who I would like to receive any
lump sum benefits if I die?
To ensure that the Trustee knows who you would like to
receive these benefits should you die, you should complete
an Expression of Wish form. You can change your mind
about who you would like to receive these benefits by
completing a new form at any time.
Technical details
While the Trustees will take into account the
information you give on your Expression of Wish form,
they are not legally bound by it. This means that they
can determine who is to receive the cash sum and it
enables payment to be made very quickly directly to
your beneficiaries. Normally, this sum is not subject to
Inheritance Tax.
You should be aware that common law spouses,
partners who are not Registered Civil Partners and other
dependants have no automatic entitlement but may be
granted a pension at the Trustee’s discretion (subject to
the Company’s consent).
If you wish to inform the Trustee of your personal
circumstances, you should write to the Pensions Team
using the address in Useful Contacts on page 4.
If you have more than two Eligible Children, the
benefit that is payable will be split equally between
all Eligible Children.
The partner’s pension is payable for life and is therefore
unaffected by remarriage. Partner’s and children’s
pensions will be paid monthly in arrears and will be
subject to the same increases as retirement pensions.
7
4. Supporting your membership
4.1. Who pays
You make a fixed contribution towards your pension and
the balance of the cost of providing all these benefits is
the responsibility of Edinburgh Airport Limited.
• You contribute 5% of your Pensionable Salary and if you
are a shift worker you also contribute 5% of your shift
pay each month, but the cost to you is less than this as
you normally don’t pay tax on pension contributions.
• The Company pays the balance of the costs of providing
all the benefits as well as the expenses of running the Plan.
4.1.1. How do I pay?
Your contributions are deducted from your salary on a
monthly basis before tax. This means that you will pay less
tax as you will not be taxed on the amount contributed to
the Plan.
While you will receive a Basic State Pension at retirement,
the Plan replaces part of the additional retirement benefits
(State Second Pension) that would normally be paid to you
by the State, so you will also pay a reduced rate of National
Insurance (NI).
Example:
A member has an annual salary of £20,564. For the
purposes of the example, it is assumed that the salary
figure does not change over the year and that the Lower
Earnings Limit is £5,564. The member’s Pensionable Salary
is worked out as:
£20,564 - £5,564 = £15,000 a year
Member contributions to the Plan are calculated as:
£15,000 x 5% = £750 a year
But there are two savings to reduce the actual cost:
i) Tax relief £750 x 20% = £150
ii) Reduced NI contributions £15,000 x 1.4% = £210
Total saving = £150 + £210 = £360 a year
The actual (net) cost to the member is therefore:
£750 - £360 = £390 a year, or £32.50 each month
4.1.2. Can I make additional contributions to the Plan?
If you were paying additional contributions to the BAA
Pension Scheme to secure added years of service at the
time of your transfer to the Plan, then you may continue to
do so. However it is not possible to commence or increase
added years contributions.
If you wish to increase your overall pension provision,
then it is possible to join a personal pension plan and
still remain a member of the Plan.
4.1.3. How much does the Company pay?
The Company pays the balance of the cost of providing
the pension and life assurance benefits and the expenses
of administering the Plan, after employee contributions
have been paid into the Plan. The cost of the pension and
life assurance benefits provided by the Plan is significantly
more than the cost of your contributions.
The level of contributions required is determined on
the advice of the Plan’s actuary who carries out regular
reviews of the financial position of the Plan.
4.1.4. What happens to the contributions?
Your contributions, along with those of the Company, are
paid into a fund which is invested to provide benefits for
you and other Members of the Plan when they become
due. The fund is set up under trust and its finances are
kept quite separate from those of any of the participating
employers.
Technical details
The Government has set an ‘Annual Allowance’ or limit to
the amount of pension savings you can make in a year,
before being subject to tax. For the 2012/13 tax year
the Annual Allowance is £50,000. The Annual Allowance
is expected to reduce to £40,000 from 2014/15..
For defined benefits schemes like the Plan, pension
savings means the HMRC valuation of the benefits being
earned, not just your personal contributions. While this
will have no effect on the overwhelming majority of
Plan Members, if you believe that you could be affected,
or intend to make large contributions to other pension
arrangements outside the Plan, you should seek your
own tax advice.
Your contributions will cease when you have
completed the maximum of 36 years of Pensionable
Service.
The level of contributions you are required to pay
may change in future, but if this happens, you will be
consulted in advance.
The Trustee of the Plan is required to publish and
keep under review a Statement of Investment Principles,
which explains its thinking behind how the assets of the
Plan are being invested. You can obtain a copy of this
document by contacting the Pensions Team.
8
5. Special information for part-time employees
Overview
• You are eligible for the full range of benefits offered
by the Plan.
• To ensure you receive a full and fair level of pension
benefits, the Pensionable Salary and Pensionable Service
for part-time workers are expressed as a proportion of
the full-time equivalent.
Technical details
These calculations are no different to simply using parttime salary for Members who have part-time service
only on constant hours, but ensure that a Member
with both full-time and part-time service, or whose
contractual hours change, is credited with the correct
total period of Pensionable Service.
5.1. Pensionable Salary
• Your Pensionable Salary will be expressed in terms
of your equivalent full-time Pensionable Salary.
• This means that your pensionable salary will be higher
than your annual basic salary.
• Your contributions will be based on your salary before
it is multiplied to reflect full-time hours (ie your annual
basic salary less the appropriate proportion of the
Lower Earnings Limit).
Your Pensionable Salary will be calculated as follows:
Your Annual
Basic Salary
-
A proportion of the Lower Earnings Limit (reflecting
the proportion of part- time hours worked)
x
Contractual hours for the equivalent full-time position
Actual contractual hours
5.2. Pensionable Service
Your Pensionable Service will be expressed in terms
of your equivalent full-time Pensionable Service.
This means that your pensionable service will be
lower than the number of years you have been a
member of the Plan.
Your Pensionable Service will be calculated as follows:
Your length of
membership
(in years, counting days)
Actual Contractual Hours
x Contractual Hours for the
equivalent full-time position
9
6. Your questions answered
6.1. How do I join?
The Plan is closed to new entrants. You will be a member
if you were employed by Edinburgh Airport Limited on
31 May 2012 and were a member of the BAA Pension
Scheme immediately prior to that date and you elected
to transfer your benefits from the BAA Pension Scheme
into the Plan.
6.2. What if I want to opt out?
You can decide to opt out at any time by informing
Edinburgh Airport HR at least one month before you wish
your contributions to cease. Note that if you decide to opt
out you will not be permitted to re-join the Plan in future.
6.3. How do I know what pension I will receive?
Each year you will be sent a Benefit Statement.
The statement will detail the level of pension you
might receive if you continue working until your
Normal Pension Date.
More detailed information on the options available
will be provided to you should you leave the Company
before retirement.
6.7. Where can I go if I have any more questions?
If you have any more questions, please contact either the
Pensions Team at Lane Clark & Peacock LLP or Edinburgh
HR, Capital House, Edinburgh Airport, Edinburgh, EH12
9DN – please see Useful Contacts on page 4 of this booklet.
6.8. Where can I go for advice about my pension?
Neither the Company nor the Trustee can give you financial
advice. If you would like financial advice we recommend
you contact a Financial Adviser. You can find details of
your nearest Financial Adviser at www.unbiased.co.uk.
6.4. Will my pension from Edinburgh Airport affect the
pension I receive from the Government at retirement?
Your basic state pension will not be affected by payments
from the Edinburgh Airport Pension Plan. The Government
also provides an earnings-related top-up to this pension,
known as the State Second Pension (S2P).
However, as a member of the Edinburgh Airport Pension
Plan, the amount you will receive (if any) in earningsrelated top up will be lower for the years that you are
a contributing member of the Plan, but you will pay less
National Insurance to reflect this.
Further details on the pension benefits you might
receive from the State are included in section 8 ‘State
Pension Benefits’.
6.5. Can I increase the pension I will receive by transferring
in benefits or pension savings from another scheme?
It is not currently possible to transfer benefits or savings
from other pension schemes into the Plan.
6.6. What happens if I leave the Company?
Generally speaking, the options available to you will
depend on your length of Pensionable Service:
• Over 2 years – you can keep the benefits in the Plan
until you reach retirement, or you can transfer these
to another pension arrangement.
• 3 months to 2 years – you will be offered a transfer
value to enable you to transfer these benefits into
another pension arrangement. Alternatively, you will
be refunded the value of your contributions minus a
deduction for tax and an amount to reinstate you into
the state second pension.
• Up to 3 months – your contributions will be refunded
minus a deduction for tax and an amount to reinstate
you into the state second pension.
10
7. General Information
7.1. Management of the Plan
The Edinburgh Airport Pension Plan is established under a
trust administered by a Trust Company with its own Board
of Directors (known as Trustees). The Board comprises
trustees appointed by the Company and trustees who are
nominated by members. The Trustee board is responsible
for ensuring the correct management of the Plan and calls
upon the expertise of professional advisers in order to run
the Plan. These include investment managers, actuaries,
auditors and lawyers.
7.2. Tax approval
The Plan is a ‘registered scheme’. This means that it
is registered by HM Revenue & Customs. Various tax
advantages are available to registered schemes:
• You receive income tax relief on your contributions
to the Plan up to the Annual Allowance.
• The income received from the investment of the
Plan’s assets is largely free of tax.
• Cash lump sums payable on retirement are free
of tax subject to the Lifetime Allowance.
• All pensions are treated as earned income and are
taxed under the PAYE system.
• The Trustee of the Plan is liable to pay tax (currently
at 20%) on refunds of contributions and a deduction
to cover this liability is made from the refunds to
Members who withdraw.
7.3. Amendments to the Plan
The Company intends that the Plan should continue.
However, it has the right, subject to consultation, to
amend or discontinue the Plan at any time. In the event
of the Plan being discontinued, the assets of the Plan
would be used to provide benefits in accordance with the
Trust Deed. The funding of the Plan is designed to ensure
that the assets would at all times be at least sufficient to
provide Members’ accrued rights. Legislation requires the
Company to top up the Plan’s resources if it falls short on
a statutory measure.
7.4. Assignment of benefits
You must not attempt to assign your future benefits to
obtain cash payments or as security for loans. Under the
Rules, there could be no legal claim on the Plan. Your
benefits would cease to be payable and would come under
the control of the Trustee for payment at its discretion.
7.5. Temporary absence
Membership of the Plan is unaffected during a period of
temporary paid absence (due to maternity leave, sickness
or accident), provided that contributions continue to be
paid and you are regarded as still being in service. In cases
of temporary absence for any other reason, continued
membership will depend on individual circumstances.
Any unpaid absences will not count for pension purposes.
7.6. Dispute procedure
Complaints about the Plan are rare and are generally
resolved informally. However, if you are not happy
with the result of the informal process, there is a formal
procedure for resolving disputes, known as the internal
disputes resolution procedure (IDRP)
You will need to put your case in writing to the Secretary
to the Trustee at the address at the front of this booklet.
You should provide as much information as you can (as
well as including details such as your full name, address,
date of birth and National Insurance number).
You may decide to use a representative to act on your
behalf. If so, you should include the name and address of
your representative and state whether correspondence
should be addressed to him or her.
You should expect to receive a decision within two
months, or the period determined by law.
A full copy of the IDRP is available from the Pensions
Team by writing to the address at the front of this booklet.
7.7. Other organisations
Any member or beneficiary of a pension scheme can
write to The Pensions Advisory Service (TPAS) at any
time for help in connection with any pension queries
they may have. TPAS is based at 11 Belgrave Road,
London, SW1V 1RB (Telephone 0845 601 2923;
Website www.pensionsadvisoryservice.org.uk).
Members and beneficiaries can also approach the
Pensions Ombudsman (based at the same address as TPAS,
Telephone 020 7630 2200). The Pensions Ombudsman
has the power to investigate and determine complaints
or disputes of fact or law in relation to occupational
pension schemes.
There is a further organisation involved in the proper
management of pension schemes – the Pensions Regulator.
The Pensions Regulator was created under the Pensions
Act 2004. Its top priority is to tackle risks to Members’
benefits.
Its principal aim is to prevent problems from developing
and it has powers to investigate schemes and enforce action
where necessary. Together with the Trustee’s professional
advisers, The Pensions Regulator is responsible for ensuring
that all pension schemes satisfy the terms of the Pensions
Act. The Pensions Regulator can be contacted at: Napier House,
Trafalgar Place, Brighton, BN1 4DW (Telephone 0870 606
3636; Website www.thepensionsregulator.gov.uk).
7.8. Data Protection Act
Both the Trustee and Edinburgh Airport Limited are
registered under the Data Protection Act 1998.
You should be aware that various forms in relation to
the Plan incorporate your specific consent to our holding
and processing of data in accordance with the Act.
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7. General Information
7.9. Plan information
In addition to this booklet, the following items are issued
to Members:
• Your annual benefit statement, which updates you on
the level of benefits that is building up for you, and for
your family following your death; and
• The Trustee’s newsletter to Members designed to bring
you news and information about the Plan and wider
pension issues.
7.10. Plan documentation
As a member of the Plan, you can ask to see the following
items (and in certain cases request your own copy):
• Trust Deeds and Rules;
• The latest Actuarial Valuation;
• Formal Trustee’s Annual Report and Accounts;
• The Plan’s agreed Schedule of Contributions;
• The Trustee’s Statement of Investment Principles.
• Internal Dispute Resolution Procedure
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8. State Pension Benefits
In addition to the pension you will receive from the
Edinburgh Airport Pension Plan at retirement, you may
also receive a pension from the State. There are two parts
to the State pension:
• The Basic State Pension – this is what most people
think of as the ‘old age pension’; and
• An additional earnings related top up – which is
currently called the State Second Pension (S2P).
8.1. The Basic State Pension
The maximum Basic State Pension is currently worth
£107.45 a week (£5,587.40 a year) for a single person or
£171.85 a week (£8,936.20 a year) for a married couple.
This amount is increased by the Government each year,
• This is a flat rate pension paid to everyone with a
sufficient National Insurance contribution record.
• The amount you will receive will depend on how long
you have been working and paying National Insurance
contributions.
• Membership of the Plan does not affect your eligibility
to receive the Basic State Pension.
8.2. An additional pension
This is an earnings-related top up to the Basic State
Pension.
On 6th April 2002, The State Second Pension (S2P)
replaced SERPS (the State Earnings Related Pension
Scheme), which was introduced as a top up to the Basic
State Pension in the 1970s.
• As a member of the Plan you pay lower levels of
National Insurance contributions and therefore:
• You will not have built up any additional pension
through SERPS; and
• You will not be eligible to build up full S2P benefits:
If you are earning more than £33,000 you will not
build up any S2P pension; or
If you are earning less than £33,000 you may still be
able to build some S2P pension, reflecting the more
generous State provision for low and moderate earners.
Technical details: N.B. All figures relate to the 2012/2013
tax year.
The Government may change pension benefits offered
by the State. For example, the Government has announced
it intends to replace the current Basic State Pension and
Second State Pension (S2P) with a single flat rate state
pension. The changes will happen in 2016 at the earliest.
has been possible to delay taking your state pension until
after this age and then receive an increased state pension.
The difference between the normal rate of state pension
and the increased rate of state pension is known as Extra
State Pension.
• You can delay taking your pension benefits for a
minimum of five weeks up to a maximum of five years.
• For every five weeks you delay drawing your pension,
you will receive an Extra State Pension of 1% of the
weekly state pension you would have received at your
State Pension Age. This equates to an additional 10.4%
for each year of delay.
• If you delay taking your state pension for more than
12 months you can choose to take a taxable lump sum
(of the payments you missed and compound interest
on the missed weekly pension payments) instead of
taking the additional pension.
Please note:
• Your state pension cannot be claimed before your
State Pension Age.
• You must draw all the state pension benefits you
are entitled to from the same date, whether this is
the Basic State Pension, the State Earnings Related
Pension or the State Second Pension.
Although the option to delay taking your state pension
may be tempting, it is not suitable for everyone.
For example, it may mean you need to continue to work
in order to bridge the gap between State Pension Age and
the date you start claiming your state pension benefits,
where you do not have an alternative source of income.
The decision about whether to delay claiming state
pension benefits will depend on your financial circumstances.
If you are thinking of deferring your state pension, you
should take independent financial advice.
If you want to know what level of pension income
you are likely to receive from the state at retirement,
you can ask for a forecast of your likely State benefits
by completing form BR19 available at your local Social
Security or Pension Service Office or online at
www.direct.gov.uk/pensionforecast.
Example:
The current Basic State Pension is £107.45 per week.
If you were to delay claiming your pension for a year
you would receive £118.62 per week instead. In this
case the Extra State Pension would be £11.17 per week.
8.3. Improving your state pension by retiring later
Many people think that the date at which they can draw
their state pension is fixed at the State Pension Age (which
will be 65 for men and women by November 2018 and
rising gradually to 68 by 2046). However, for some time it
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9. Glossary
Annual Allowance
This is the limit to the amount by which your pension
savings can grow in a year, before being subject to tax.
It has been set at a high level (£50,000 at April 2013)
and so is unlikely to apply to many Members.
Company
Edinburgh Airport Limited
Eligible Children
Will include any child or children of a member (including
a legally adopted child or step-child) under the age of 18
or, if still in full-time education, up to the age of 23.
Final Pensionable Salary
This is the salary on which your benefits are based. I
t is the highest one-year average of your Pensionable
Salary in the last three years of Pensionable Service.
Lifetime Allowance
This is the limit on the amount of your overall pension
savings pension that will qualify for full tax relief. This
limit will apply to all of the benefits you build up over
your entire life. This limit is high enough not to affect
most people (£1.5m worth of benefits as at April 2013).
Any benefits in excess of this limit can be taken as a
pension or cash after a deduction for tax.
Lower Earnings Limit
This is a figure set by the Government which is the
minimum amount someone who is not in a contracted-out
pension scheme has to earn before they start building up
State Second Pension.
Pensionable Service
This is normally your period of membership of the Plan
together with any period of membership of a previous
employer’s scheme from which benefits have been
transferred to the Edinburgh Airport Pension Plan.
Pensionable Service ceases when you retire and is
subject to a maximum of 36 years.
Plan
The Edinburgh Airport Pension Plan.
Registered Civil Partner
A Registered Civil Partner is someone who has entered
into a civil partnership with another member of the same
sex. Civil Partnerships allow same sex couples to be treated
for legal purposes in the same way as married couples.
Shift Credits
Shift Credits are earned by shift workers, and are
additional periods of service, added to their Pensionable
Service each year, to reflect the difference between their
Pensionable Salary and the additional amount earned in
Shift Pay. Shift Credits can take your Pensionable Service
over 36 years.
Spouse
This is a person with whom you have been through
a lawful ceremony of marriage.
Trustee(s)
This means either Edinburgh Airport Pension
Trustees Limited, or the directors of that company,
as the context requires.
Members
These are all employees who are contributing members
of the Plan. You will remain a member until you stop
contributing to the Plan (either because you leave
Edinburgh Airport’s employment or because you decide
to stop contributing, or because you retire and become
a ‘Pensioner’).
Normal Pension Date
This is the date of your 60th birthday.
Pensionable Salary
This is your annual basic salary plus any other amounts that
are stated as pensionable in your contract of employment,
less an amount equal to the Lower Earnings Limit.
14
Edinburgh Airport
Edinburgh
EH12 9DN
Scotland
EDI_Airport
edinburghairport
edinburghairport.com
Company Number SC096623