Defined Benefit Pension (DB) Final Salary Pension.

Its important that you seek Independent Financial Advice before making any decisions regarding your Lafarge UK Pension.

Defined Benefit Pension (DB).

From April 2015 the Government will provide greater freedom for individuals with Defined Contribution (DC) pension arrangements regarding how they access their pension funds in retirement.  Individuals will have the flexibility to take money from their DC fund in whatever pattern they like.

However, members with Defined Benefit (DB) pensions, such as you have accrued in the Lafarge UK Pension Plan, will not currently be granted the same flexibility in respect of their DB arrangements.  You would need to transfer out of the Lafarge UK Pension Plan to another registered DC pension arrangement to take advantage of the new flexibilities.

Option to Transfer

You may elect to transfer the value of your pension to another appropriately registered pension scheme (Defined Benefit (DB) or Defined Contribution (DC) as explained below) provided the transfer is taken before Normal Retirement Age (65 for most members). 

A transfer to a DC pension arrangement may increase the options available to you at retirement. You would still be able to take a tax-free lump sum but it would be calculated as 25% of your pension fund. The remainder could be used to either:

Buy an annuity with an insurance company to provide a guaranteed income for life.  You could choose whether this has an attaching dependant’s pension or just provides a pension payable to you. You would also be able to change the level of increases which your pension receives, or

From April 2015, you can take the balance of your fund in whatever pattern you like. If you prefer not to buy a pension, you can take the whole amount as one lump sum or  withdraw (or Drawdown)  the amount as several lump sums from your pension savings to meet your income requirements, which would be taxed at your marginal tax rate. You can choose how much to withdraw each year or you can withdraw a proportion and use the remainder to purchase an annuity now or in the future. You can also choose how the money is invested until it is withdrawn or used to purchase an annuity.

The option to transfer will not be suitable for everyone but may be attractive to some, depending on their personal circumstances. By transferring to a DC scheme, you are unlikely to be able to replicate your Lafarge Plan benefits with the attaching dependant’s pension and the pension increases in payment. However some people like the flexibility to choose, and it depends on what your plans are for retirement, how much you have saved (both within and outside of the Plan), what your individual circumstances are, your health, how much income you would like to receive in retirement and when you would like to receive it.  

It is therefore important that you seek impartial financial advice before considering such a transfer. The Government have imposed a new requirement on occupational pension schemes; for transfer values over £30,000 you will need to confirm that you have taken advice from a professional financial adviser, that is authorised by the Financial Conduct Authority (FCA) and independent from the Plan, before we can allow your transfer to proceed.

If you do not already have an adviser, you can find one at: www.unbiased.co.uk or www.moneyadviceservice.org.uk.  Please note that you may have to pay for any advice that you receive and you would also need to decide where any transfer would be payable to.

Please note - More information can be found on the Governments Pension Wise website Click>Pension Wise.

If you have any further questions, please don't hesitate to contact the helpline 01306 872100 or write to :

Lafarge UK Pensions, Park Lodge, London Road, Dorking, Surrey, RH4 1TH.

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