CAB 2011

For members who elected to join between 1 April 2011 and 1 January 2012.

what if...

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What happens if I opt out or leave service?

You stop building up benefits when you opt out or leave service.

Less than two years' pensionable service

If you have completed at least three months' pensionable service, you can choose to transfer the value of your benefits to a pension plan of your choice. The transfer will be calculated in line with overriding legal requirements and is designed to represent the actuarial value of your benefits. The decision to transfer must be made within three months of you receiving information about the transfer value. The other pension scheme must be willing and able to accept the transfer value within a reasonable time.

If you do not take a transfer value, you will receive a payment from the BBC (not the Scheme) equal to the amount of salary you gave up through Smart Pensions. The payment will be subject to deductions for income tax and National Insurance. If you didn't participate in Smart Pensions, you will receive a refund of your contributions less a deduction for tax from the Scheme.

If you do not complete three months' pensionable service whilst in Smart Pensions, no benefits will be paid. If you didn't participate in Smart Pensions, you will receive a refund of your contributions less a deduction for tax from the Scheme.

Two or more years' pensionable service

You will be entitled to a deferred pension payable at normal pension age.

Deferred CAB 2011 pensions receive the same increases as active CAB 2011 members.

You can ask for your deferred pension to be paid before normal pension age either because of incapacity or from age 55 onwards. Payment is subject to the agreement of the Trustees and your pension will be reduced for early payment. In cases of incapacity, the Trustees have discretion to waive some or all of the reduction.

Instead of being entitled to a deferred pension from the Scheme, you can choose to transfer the value of your benefits to a pension scheme of your choice. The transfer value will be calculated in line with overriding legal requirements and is designed to represent the actuarial value of your benefits. Please contact the pension service line for further information.

Does temporary absence affect my pension?

Temporary absence from work does not affect how your benefits build up while you remain in service on full pay.

During authorised unpaid absence, you are opted out of Smart Pensions automatically and will not build up career average benefits. On return to work, you are re-admitted to Smart Pensions and your benefits start to build up normally again. You cannot make good the 'lost' benefits.

If you do not return to work at the end of an unpaid absence, you will be treated as having left pensionable service on the day your pay stopped.

During all temporary absences, whether paid or unpaid, you will be covered in full for death in service benefits.

Sickness absence and family leave

While on paid sickness absence or family leave (i.e. maternity, adoption, paternity or parental support leave) you continue to participate in Smart Pensions.

However, you are opted out of Smart Pensions automatically in the month in which you start to receive statutory pay only through payroll. Your contributions will then be collected temporarily through the payroll and based on your actual pay. Your pension will usually build up based on your original pensionable salary.

Secondments

Members seconded to work for another non-participating employer cease to participate in Smart Pensions but can continue to build up career average benefits on condition that:

contributions are paid by the non-participating employer and the member during the same Scheme year in which the benefits build up;

there is a definite expectation that the member will return to work for the BBC, or another participating employer;

the secondment, in total, does not exceed 10 years; and

benefits build up using the pensionable salary that the member would have received, if they hadn't been seconded.

Career breaks

If your employer agrees to you taking a career break, you will be treated as having left service. If you are re-employed, you will be able to re-join CAB 2011 provided you were an active CAB 2011 member at the time you go on the career break. When planning a career break, you should consider carefully the impact it will have on your career average benefits. Help is available from the pension service line.

What happens when I die?

Death in service

If you are an active CAB 2011 member and die in service before taking your pension, the following benefits are payable:

A lump sum

The Trustees will make a lump sum payment, which is currently free of inheritance tax. It will be equal to the lesser of four times your life cover pensionable salary as at the date of your death and your remaining Lifetime Allowance. It will be reduced by any other lump sums payable from the Scheme on your death and any lump sums from commutation paid to you by the Scheme in respect of your current period of employment.

The Trustees have discretion over who receives the cash and in what proportion. They take into account, but cannot be bound by, your wishes. You are therefore asked to let the Trustees know your choice of beneficiaries by completing an expression of wish form available from the documents section.

If the lump sum is restricted because of the Lifetime Allowance the balance will be used to provide additional pension for your dependants.

A dependant's pension

Your qualifying spouse, qualifying civil partner or nominated dependant will receive a dependant's pension calculated as follows:

50% of your pension built up from CAB 2011 to date

plus

50% of the future pension you would have built up, without revaluation, had you remained an active CAB 2011 member until normal pension age based on your pensionable salary as at the date of your death

Example:

Janet dies at age 55. She has a further 10 years' potential pensionable service to normal pension age. Her pension built up to date is £5,000 p.a. Her pensionable salary when she dies is £25,000.

The dependant's pension is:

50% of £5,000 = £2,500 plus

50% of {(1.67%* of £25,000) x 10} = £2,087.50 = £4,587.50 p.a.

*1.67% is the rate at which pension builds up.

Children's pensions

Your qualifying children (up to a maximum of two) will each receive a pension equal to half of the dependant's pension. If no dependant's pension is payable, the children's pensions will be doubled.

Death before your deferred pension starts

If you die before normal pension age and have a deferred pension, the following benefits are payable:

A dependant's pension

Your qualifying spouse, qualifying civil partner or nominated dependant will receive a dependant's pension of half of your deferred pension.

Children's pensions

Your qualifying children (up to a maximum of two) will each receive a pension equal to half of the dependant's pension. If no dependant's pension is payable, the children's pensions will be doubled.

Death after your pension starts

Your pension is payable for life. On your death, the following benefits are payable:

A dependant's pension

Your qualifying spouse, qualifying civil partner or nominated dependant will receive a dependant's pension of half your pension, as it would have been ignoring any cash you chose to take.

Children's pensions

Your qualifying children (up to a maximum of two) will each receive a pension equal to half of the dependant's pension. If no dependant's pension is payable, the children's pensions will be doubled.

Example:

John retires at age 65. His annual pension is £8,000 p.a. He exchanges some of his pension for cash and receives a lower pension. He nominates his father, Jack, as his dependant.

Following John's death, Jack will receive a pension of £4,000 p.a. for the rest of his life.

An incapacity pension lump sum

If you are being paid an incapacity pension and die before normal pension age, the Trustees will make a lump sum payment, which is currently free of inheritance tax. It will be equal to the lesser of four times your life cover pensionable salary as at the date you left service and your remaining Lifetime Allowance. It will also be reduced by any other lump sums payable from the Scheme on your death and any lump sums from commutation paid to you by the Scheme in respect of your current period of employment. If the lump sum is restricted because of the Lifetime Allowance the balance will be used to provide additional pension for your dependants.

The Trustees have discretion over who receives the cash and in what proportion. They take into account, but cannot be bound by, your wishes. You are therefore asked to let the Trustees know your choice of beneficiaries by completing an expression of wish form available from the documents section.

Divorce or dissolution of a civil partnership

Your pension rights may be taken into account on divorce or dissolution of a civil partnership. The court can order your pension to be divided between you and your ex-spouse or ex-civil partner (ex-partner), although this depends on the terms of the settlement.

Couples can choose to offset pension rights against other assets (e.g. the family home) or 'earmark' some (or all) of a member's benefits to go direct to the ex-partner when they come into payment. Alternatively, pension rights can be 'shared' as part of a 'clean break' settlement. Pension sharing creates a 'pension credit' for the ex-partner and a corresponding 'pension debit' for the member. The Scheme's current policy is to use a pension credit to make a transfer payment to another pension scheme that will provide retirement benefits for the ex-partner. Scheme membership is not offered to an ex-partner.

The Scheme makes a charge for:

  • providing information in connection with divorce proceedings, over and above that which it has a duty to provide free of charge under the existing statutory disclosure requirements;
  • compliance with a pension sharing order or agreement; and
  • any other activities in connection with pension sharing.

A more detailed explanation of pension sharing, how the Scheme operates a pension sharing order or agreement, and a schedule of its charges are available from the pension service line.

You should consult and be guided by a suitably qualified family law practitioner on matters relating to divorce or dissolution of a civil partnership