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The Superannuation Arrangements of the University of London |
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Active Members ► Thinking about retiring? As you approach retirement, having built up pension benefits in SAUL, you’ll need to consider how and when you want to start receiving your benefits. You must leave your job with a SAUL employer to retire from the Scheme. SAUL’s Normal Pension Date is the last day of the month before your 65th birthday; however, many members take advantage of the flexibility of SAUL’s benefits by retiring early or late. SAUL pays basic benefits of a pension of 1/80th of Pensionable Salary for each year of Pensionable Service and a lump sum of three times your pension. The value of your lump sum can be adjusted to secure a higher or lower pension. Our pension calculator provides a guide of how much you can expect to receive or you can ask your Pensions Officer for a formal quotation. This section provides information about your options upon retirement and the practicalities of taking your benefits. You can find more detailed information in the SAUL Retirement booklet. |
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Quick Links |
Retiring on the grounds of ill-health What is the lifetime allowance? How does my pension increase after retirement?
If you’re considering retirement you will wish to discuss this with your employer however you can ask SAUL Trustee Company for a quotation at any time. If you know your retirement date, please let us know at least three months before you intend to retire and we will send you a Retirement Form. Your form will show: Option A: the value of your benefits if you were to take a pension without a lump sum. You can take any amount of lump sum up to the maximum. If you would like a quotation based upon a different level of lump sum than shown on the form then please ask us for a quotation. In addition, members may decide at retirement to increase any spouse’s pension payable. You complete the Retirement Form by:
Once you return your completed form to us, we will make arrangements to pay your pension and any lump sum and then write to you to confirm that your payments have been set up.
If you joined SAUL before 6 April 2006 you can retire from age 50. If you joined SAUL on or after this date the minimum retirement age is 55. SAUL will reduce your benefits for early payment because your pension will be paid for longer. Currently pensions are reduced by 3% for each year before age 60 that you retire. Pensionable Service built up through Additional Voluntary Contributions is currently reduced by 4% for each year before age 60. Additional Pension built up through Additional Voluntary Contributions is reduced by 6% for each year before Normal Pension Date. The level of these reductions is set by the Trustee and reviewed regularly. If you are retiring early at the request of your employer different terms apply. For an estimate of how much you can expect to receive you can use our pension calculator or speak to your Pensions Officer if you wish to request a formal quotation.
You may retire as an active member after your Normal Pension Date and before your 75th birthday with the agreement of your employer. When you reach Normal Pension Date you can choose whether or not you wish to keep contributing to SAUL, please see membership after Normal Pension Date for more information. If you retire after Normal Pension Date and continue to pay contributions up to the date of your retirement, you will continue to build up Pensionable Service in SAUL and your benefits will be based upon your Pensionable Salary at the date you retire so any increases in your Salary after Normal Pension Date will be taken into account. Your benefits will be at least as much as if you stopped contributing when you reached Normal Pension Date. If you retire after Normal Pension Date and stop paying contributions on or after Normal Pension Date, you won’t build up Pensionable Service and any increases in your salary will not be taken into account after you stop contributing. Your benefits will be increased at an enhanced rate between the date you stop contributing and your retirement because we are paying them later. For an estimate of how much you can expect to receive you can use our pension calculator or speak to your Pensions Officer if you wish to request a formal quotation. Please note that the retirement calculator assumes that you continue contributing between your Normal Pension Date and the date you wish to retire.
Retiring on the grounds of ill-health If you have completed at least two years’ service, and your employer and the SAUL Trustee are satisfied that you have become incapable of carrying out your duties because of permanent ill health or incapacity, you may be entitled to retire early. You will receive benefits based upon the Pensionable Service you could have built up if you had stayed in service to Normal Pension Date (to a maximum of 40 years) and a lump sum of three times the pension. These benefits will not be reduced for early payment. You must give satisfactory medical evidence to your employer and the Trustee. The Trustee may monitor your health after you have retired and can cancel, suspend or reduce your pension until Normal Pension Date if:
If you have less than two years’ service but meet the other conditions outlined above, you could leave service and apply for ill-health retirement as a deferred member.
If your total rights from all registered pension schemes do not exceed 1% of the lifetime allowance, or the cash value of your SAUL benefits does not exceed £2,000, you may be able to convert all of your benefits into an immediate lump sum payment. This is called converting a ‘trivial’ pension. If you are able to convert ‘trivial’ pension benefits into a lump sum SAUL will tell you when you retire.
What is the lifetime allowance? There is a lifetime allowance for each individual’s pension benefits from all registered pension schemes. This includes SAUL, pension benefits from previous employers and any personal pensions you may have - but doesn’t include State benefits. The lifetime allowance is £1.5 million from 6 April 2012. If your total benefits are valued at more than the lifetime allowance, then a tax charge is payable. To value your SAUL benefits against the lifetime allowance you multiply your pension by 20 and add the value of the lump sum. For example a member who retires with a SAUL pension of £15,000 and a lump sum of £45,000 will take up £345,000 of their lifetime allowance with their SAUL benefits (15,000 multiplied by 20 plus 45,000 = 345,000) In reality very few SAUL members will be affected by the lifetime allowance however we will ask you to declare that the value of all your pension benefits does not exceed this level at retirement. We will tell you the percentage of your lifetime allowance taken up by your SAUL benefits when you retire or if you ask us for a quotation. The administrators of other schemes will tell you how much you’ve used already if you ask them.
We pay your SAUL pension on the 24th of each month to cover the whole of that month. If the 24th falls at a weekend or on a public holiday, we will pay your pension on the nearest working day before the 24th. We can only add new information to the payroll up to 10 working days before the 24th of each month. So if we have not received your details in time for this, the update will only come into effect the following month. The first instalment of your pension will cover the entire period that starts from your retirement date and finishes at the end of the month in which you receive the first payment. This means we pay any arrears of pension with your first payment. If you intend to live abroad we will:
You will receive a payslip when your pension starts, every April thereafter and if your pension changes by more than £1.
How does my pension increase after retirement? Each April, SAUL pensions in payment are increased in line with price inflation in accordance with the Pensions (Increase) Act 1971. However, if a pension has been in payment for less than one year, we will pay only a proportion of the annual increase. From the date of retirement, if early, until State pension age, SAUL pays increases on the total pension. Once you reach State pension age, the Department for Work and Pensions (DWP) pays annual increases, in line with price inflation, on the Guaranteed Minimum Pension (GMP) built up before April 1988. SAUL pays the normal SAUL increases on the rest of your pension built up before April 1988. For pension built up between April 1988 and March 1997, SAUL pays annual increases of up to 3% on the GMP and the normal SAUL increases on the rest. If price inflation exceeds 3% in any year, the DWP pays the extra increase on the post-1988 GMP. For pension built up after April 1997, the whole increase will come from SAUL. |
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