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A Guide for Members
MMC UK Pension Savings Plan
Contents Page
Section 1 How the Plan works 1
Section 2 The Plan in brief 3
Section 3 The Plan in detail 4
Contributions 4
Investment 6
Retirement benefits 6
Early and late retirement 7
Death in service 8
Death after retirement 9
Leaving 9
Temporary absence 11
Section 4 Further information 12
April 2010
MMC UK Pension Savings Plan
MMC believes that the provision of a pension plan is
an important part of your compensation package
and offers a flexible pension arrangement designed
to help you plan for the future, whatever your age or
personal circumstances.
The purpose of the Plan is to:
• provide you with an income when you retire
• provide financial protection for you and your
dependants should you die in service before
retirement.
Who can join?The Plan provides benefits on a ‘defined contribution’
or ‘money purchase’ basis and is open to all eligible
employees, as notified by MMC.
If you are an employee under age 30 when you join the
Company, you will be automatically entered into the
Plan when you join the Company unless you indicate to
the contrary (see “Opting out of the Plan” on page 12).
If you choose not to join the Plan at the first
opportunity you will only be able to join the Plan at
a later date with the Company’s and the Trustee’s
consent, and this may also be subject to special
terms. You will, however, be covered for a death in
service lump sum (see page 8).
Moving to the MMC UK Pension FundOn 1 April after reaching age 30 you will automatically
leave the Plan and join the Mercer Defined Benefit
section of the MMC UK Pension Fund, subject to that
section being open to new members at that time,
unless you indicate to the contrary and choose to stay
in the Plan.
DefinitionsCertain terms have special meanings which are given
in a table of definitions on the fold out flap at the back
of this guide. Where a defined word is used in the main
text it appears in italics.
ContributionsBoth your own contributions (including additional
voluntary contributions) and contributions paid
or credited by the Company are allocated to an
Individual Account in your name. For most members,
your contributions (other than additional voluntary
contributions) will be made through PaySmart
(see page 4). This money will be invested on your behalf
and the value of the fund you have built up, which will
depend on the amount of contributions made and the
investment returns on them, will be used to provide
your benefits at retirement.
Annual statementEach year you will receive a personal statement
showing the value of your Individual Account, the
contributions credited or paid into it during the year and
the estimated pension that could possibly be provided.
The estimated pension will be based on assumptions
on future investment returns, among other factors.
You will be able to request a Plan annual report with
more details and performance figures.
Benefits from the PlanYour pension, and any pension for a Spouse, Children or
Dependent Relatives, will be payable through an annuity
bought from an insurance company. The pension you
receive will normally be paid in monthly instalments,
direct to your bank account, by the insurance company.
Pensions are subject to income tax and, if appropriate,
this will be deducted before payment.
In addition, subject to your National Insurance
Contribution history, you should also receive the Basic
State Pension and the pension you have earned under
the State Second Pension (S2P) from State Pension
Age (see page 15).
Transfer of pension from a previous arrangementTransfers from previous arrangements (including
transfers from the MMC UK Pension Fund) are not
being accepted into the Plan.
How the Plan works
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MMC UK Pension Savings Plan Section 1
2
Expression of Wish formsOne of the duties of the Trustee is to decide who
should receive any lump sum that becomes payable
under the Plan if a member dies in service. To help the
Trustee make this decision, you should complete the
Expression of Wish form which accompanies this guide
if you have not already done so to notify the Trustee of
your chosen beneficiaries. The Trustee will take your
wishes into account, but has absolute discretion in
determining who should receive any lump sum death
benefit that becomes payable on your death and is
therefore not bound to follow your wishes. You should
at all times ensure that your Expression of Wish form is
up-to-date.
If you wish to change your beneficiaries, you should
complete a new form immediately. Forms can be
downloaded from the Plan website, details of which
can be found opposite.
Leaving the PlanIf you leave the Plan (for example, you opt out or leave
to go to another employer who does not participate
in the Plan), no further contributions will be paid or
credited to the Plan, either by the Company or by you.
Details of the benefits payable from the Plan on leaving
can be found on page 9.
Contact detailsIf you have any questions about the Plan, or need any
information about your own benefits, please contact:
The Plan Administrator
MMC UK Pension Savings Plan
PO Box 476
Westgate House
52 Westgate
Chichester
PO19 3WZ
Tel: 0845 6000293
Fax: 01243 522001
Email: [email protected]: www.pensions.uk.mmc.com
2
MMC UK Pension Savings Plan Section 1
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Section 2
The Plan in brief
Are you under age �0 on joining the Company?
Yes No
MMC UK Pension Savings Plan member
Contributions Members: 2% to 5% of Pensionable Salary
Company: �% to 6% of Pensionable Salary
At age �0* you will Member of the Mercer Defined automatically join the Benefit section of the Mercer Defined Benefit section MMC UK Pension Fund of the MMC UK Pension Fund for future service
Opt not to join the MMC UK Pension Fund
Continue as a Contributing Member of the MMC UK Pension Savings Plan
* Changes take effect on the �st April coincident with, or immediately following, the relevant birthday.
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The Plan in detail
MMC UK Pension Savings Plan
Your own contributions and the contributions paid or credited by the Company are allocated to your Individual Account, and the money is then invested on your behalf. When you join, you will be asked to indicate your choice of contribution rate through “Options”, the flexible benefits programme, and you will be able to choose your investment funds using OneView, a secure, web-based service.
ContributionsYour contributionsYou have a choice of contribution rates between
2% and 5% of Pensionable Salary.
You can change the level of your contributions each
1 April through “Options”.
The actual cost to you will normally be much less than
your gross contribution, because you receive full tax
relief on your contributions at the maximum rate to
which you are liable. So, if you pay tax at 20%, each
£1 you contribute costs you 80 pence. The PAYE
system automatically adjusts for tax without any action
on your part.
PaySmartPaySmart allows you to have your share of the cost
of your pension benefits met by giving up part of your
salary via “Options”. For most members, PaySmart
will be the default choice in “Options” for paying your
pension contributions.
Through “Options” you agree to give up part of your
salary equivalent to the contribution you would have
paid towards your pension. Your gross pay reduces.
At the same time, you stop paying contributions
towards your pension and your net pay rises. This is
because you do not pay income tax or National
Insurance Contributions on the amount of the salary you
have given up. The Company increases its contributions
toward your pension by the amount you would have
paid in so that the total contribution paid is unchanged.
PaySmart is open to all Contributing Members of the
Plan who are eligible to participate in “Options”, except
where the salary adjustment for PaySmart and your
other “Options” choices would take your earnings
below the level required to ensure that you will receive
at least the National Minimum Wage. If this applies to
you, the default will be for you to pay contributions from
your salary and you will not be able to select PaySmart
in “Options”. Further details regarding PaySmart are
available on the website:
http://www.pensions.uk.mmc.com/paysmart_mercer/paysmart_mercer_home.html.
Section 3
4
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Company contributionsThe Company will pay or credit a contribution equal
to your own contribution between 2% and 5% of your
Pensionable Salary, as appropriate, and will also pay or
credit an extra 1% of Pensionable Salary.
If you do not choose your level of contribution through
“Options”, the default member contribution rate will be
2% with the Company paying 3% of Pensionable Salary.
The table below shows the contributions that are payable.
Additional voluntary contributions and other methods of savingIf you wish to boost your retirement benefits, you
may choose to do so by paying additional voluntary
contributions (AVCs) into your Individual Account
over and above your regular contributions. You can
pay up to 100% of your taxable earnings from the
Company into the Plan (this includes your regular
contributions, AVCs and any contributions to other
pension arrangements) and tax relief should normally
be available on the full amount. The Annual Allowance
will act as a limit by which your pension benefits and/or
savings under all registered pension schemes can grow
in a year before being subject to tax.
As well as being a member of the Plan, you may also
pay into other pension arrangements such as a personal
or stakeholder pension plan. The Annual Allowance and
the Lifetime Allowance will apply to the total of your
contributions to, and your benefits from, all registered
pension schemes of which you are a member.
Although AVCs and personal or stakeholder pension
arrangements may be an appropriate method of saving
for retirement, there may be more flexible forms of
investment available to you and we strongly advise you
to seek independent financial advice before you make
any decisions.
Should you wish to pay AVCs, please download and
complete the “Application to pay AVCs” form from the
Plan website and return it to the Plan Administrator.
CostsThe Company currently pays for all reasonable
administration costs of the Plan and for providing
the death in service benefits (see pages 8 and 9).
This includes any administration costs for up to two
investment switches requested by you per calendar
year. Should you request more than two investment
switches in any calendar year you will be required
to pay any administration costs that relate to those
additional switches.
An investment charge is automatically deducted from
the value of your Individual Account by the investment
manager. The current charges are set out in the
investment leaflet entitled “Your guide to choosing your
investments”, which accompanies this guide.
The way administration costs and investment charges
are met may be changed from time to time. You will be
notified of any such change.
Your contribution Company contribution Total contributions (% of Pensionable Salary ) (% of Pensionable Salary ) (% of Pensionable Salary )
2%* 3%* 5%*
3% 4% 7%
4% 5% 9%
5% 6% 11%
* Default contribution rate
MMC may vary these rates from time to time, but your contribution rate will not be increased without your consent.
Section 3
MMC UK Pension Savings Plan
6
InvestmentInvestment fundsThe Trustee has chosen a number of different
investment funds in which your Individual Account can
be invested. The funds are explained in more detail in
the investment leaflet entitled “Your guide to choosing
your investments”, which accompanies this guide. It is
important that you decide how much of your Individual
Account goes into each of the available funds and that
you record your decision in OneView. If you do not do
this your Individual Account will be invested in a default
fund determined by the Trustee.
As described above you can switch between funds
but you may incur a charge depending on the number
of switches and the charge may vary depending on
whether you are switching past or future investments.
You make your investment choices through OneView, a
secure, web-based service available 24 hours a day,
7 days a week that can be accessed from any computer
with a Windows-based internet connection. OneView
protects the confidentiality of your personal data
through the use of a unique User ID and a passcode.
Your User ID is your Global PeopleSoft ID and your
temporary passcode will be issued to you separately by
the OneView team shortly after your record has been
set up in the Plan.
Neither the Trustee, the Administrator nor the Company
are able to provide advice in connection with your
investments and nothing in this guide shall be deemed
to constitute investment advice. If you are in any
doubt about your investment choices, you are strongly
recommended to seek independent financial advice.
The Trustee will not be liable for any loss arising
from any choice of investment option.
Section 3
Investment managerThe Trustee is responsible for the selection of the
investment managers from which you may choose
your investments.
The Trustee may change the selection of investment
managers and/or range of investment funds available
from time to time. This could affect past and/or future
investments. You will be notified of any such change.
Retirement benefitsAny examples given to you concerning the value of
your Individual Account or your possible benefits at
retirement depend on the assumptions made about
contribution levels, investment returns and the cost
of buying a pension when you retire. Whether the
examples accurately predict the benefits ultimately
payable depends on whether these assumptions are
borne out in practice. The amount of your benefits
cannot be guaranteed.
Choosing your benefits at retirementShortly before you reach age 65 your retirement options
will be explained to you and you will be given
a statement showing the value of the benefits you
have earned in the Plan.
Your pension, and any pension for a Spouse, Children
or Dependent Relative, will normally be payable
through an annuity bought from an insurance company
of your choice. You must write to the Trustee at least
one month before the date your pension is due to
start, to confirm which insurance company you have
chosen. If you do not choose an insurance company,
the benefits you select will be bought from an insurance
company of the Trustee’s choice.
Your retirement benefits may include one or more of
the following, subject to any conditions imposed by the
Trustee and/or the insurance company:
• Your pension
A pension for you, payable for the rest of your life.
7
• Payment for a fixed period
In the event of your death, continued instalments
of your pension paid to your Spouse, Children or
Dependent Relatives for a fixed period (or a lump
sum equal to the remaining instalments if death
occurs before age 75).
• Spouse’s, Children’s or Dependent
Relatives’ pensions
In the event of your death, a pension or pensions to
your Spouse, Children or Dependent Relatives. Any
pension for a Child will stop when the Child ceases
to qualify.
• Pension increases
You may use your Individual Account to buy a
pension with any level of pension increases available
from the insurance company or, alternatively, you
may buy a flat rate pension which is not subject to
any increases.
• Cash sum
You may be able to take up to 25% of the value
of your Individual Account (including 25% of any
AVCs) as a cash sum when you retire.
Under current legislation your cash sum will be tax
free unless the total value of benefits payable from all
registered pension arrangements to which you belong
exceeds the Lifetime Allowance (in which case, excess
benefits will be subject to a tax charge).
You should note that any cash you take will reduce
the amount available in your Individual Account to
purchase your pension.
If you have built up benefits above the Lifetime
Allowance they will be subject to additional tax, which
may be deducted from your benefits or collected
through self-assessment by HM Revenue & Customs.
The Government currently allows employees with
pension rights built up before 6 April 2006 to protect
those rights where they are likely to have benefits that
are in excess of the Lifetime Allowance. However,
this is a complex area and you should contact an
independent financial adviser for further information.
Early and late retirementChoosing to retire earlyCurrently, you may choose to retire with an immediate
pension from the Plan at any time after your 50th
birthday, provided you leave employment with the
Company and subject to the agreement of MMC and
the Trustee, although you should note that, from
6 April 2010, the earliest age at which you will be
able to start receiving your pension from the Plan will
increase to 55. Your benefits will depend on the value
of your Individual Account, the sort of pension you
choose and the cost of buying a pension at the time
you retire.
Generally speaking, the younger you are when you
retire the shorter the time your Individual Account will
have been invested and the more it will cost to buy
each £1 of pension per annum. So, if you plan to retire
early, you should ensure your financial planning meets
your retirement needs. To assist you in this you may
wish to seek independent financial advice.
Retiring early on medical groundsThe Companies operate an Income Protection Scheme,
which may provide an income on long-term disability,
subject to insurer acceptance. This benefit is not
provided from the Plan. Full details are available from
the HR Benefits Department at the following address:
Westgate House
52 Westgate
Chichester
PO19 3HF
Under exceptional circumstances, it may be possible
for you to retire before age 50 (aged 55 from April 2010)
with an immediate pension. For these circumstances
to apply you must, in the opinion of MMC and the
Trustee, be permanently unable to carry out your
normal occupation and your earning capacity must be
seriously impaired. Appropriate medical evidence would
need to be obtained. The amount of your pension in
such circumstances will depend on the value of your
Individual Account, your age and the nature of
your illness.
Section 3
Late retirementYou may continue in service after age 65 at the
discretion of the Company. If the Company was to
exercise this discretion, and you were a Contributing
Member of the Plan at the time, your own contributions
and the contributions paid or credited to your Individual
Account by the Company would continue until your
actual retirement date unless you ask for them to stop.
Your Individual Account will be used to purchase
benefits at your actual retirement date, which must be
no later than your 75th birthday.
AVC benefits – deferred paymentWhen you retire and start taking your main benefits
under the Plan, you may defer taking your AVC benefits
up to, but not beyond, your 75th birthday. Your AVCs
will remain invested during any period of deferment.
If you die while you are receiving your main benefits but
deferring your AVCs, the AVCs will normally be paid as
an additional lump sum death benefit as decided by
the Trustee.
There are possible financial risks in choosing this
option. The value of your AVCs that remain invested
may not increase as you would have hoped and may
decrease. When you wish to use the AVCs to provide
retirement benefits, the cost of doing so may have gone
up. Before choosing to defer payment of AVC benefits,
you may want to obtain independent financial advice on
whether this is a suitable option for you.
You cannot pay any further AVCs to the Plan once
you retire.
Death in serviceIf you die in service as a Contributing Member of the
Plan the following benefits will be payable:
Death in service lump sumThe death in service lump sum for Contributing
Members of the Plan is three times your Base Salary
unless you select a different multiple of salary through
‘‘Options’’. It is important that you complete and keep
up to date an Expression of Wish form to assist the
Trustee in the distribution of this lump sum payment.
Please refer to the section on ‘Inheritance tax’ on
page 16 for further details of how this benefit will be paid.
Any lump sum benefits payable on your death will be
paid from the Plan where possible. You will be advised
separately if any of your cover will be provided outside
the Plan.
Members will be notified of any conditions which could
impact on the payment of this benefit
Spouse’s pensionYour Spouse will receive a pension equivalent to
30% of your Final Pensionable Salary at the date of
death. If, at the date of your death, your Spouse is at
least 15 years younger than you, the pension may be
reduced.
Children’s pensionsIn addition to the Spouse’s pension, your Children (up
to a maximum of 4) will receive pensions. Each Child
will receive a pension of 5% of your Final Pensionable
Salary at the date of death.
This pension will stop once the Child attains age 18
(or 23 if in full-time education or vocational training).
It can continue beyond this age if, at the date of your
death, the Child was dependent on you because of
physical or mental impairment.
Dependent Relatives’ pensionsIf you are not married, the Trustee may, with the
agreement of MMC, choose to pay a pension to a
Dependent Relative subject to certain criteria.
Pension increasesAny pensions payable on your death in service will
increase in line with the Retail Prices Index, subject to a
maximum of 2.5% per annum.
Tax treatmentAny pension paid to a Spouse, Dependent Relative or
Child will be subject to income tax but its value does
not count towards the recipient’s Lifetime Allowance.
Additional voluntary contributionsThe value of any additional voluntary contributions
(AVCs) will be used to provide benefits on your death as
determined by the Trustee.
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MMC UK Pension Savings Plan Section 3
Section 3
9
Death in service lump sum for employees who have declined to join or opted out of the Plan If you declined to join the Plan or you joined the Plan
and subsequently opted out, the death in service lump
sum is two times your Base Salary unless MMC and the
Trustee agree otherise or you select a different multiple
of salary through ‘‘Options’’.
Death after retirementIn the event of your death after retirement, your
dependants will be entitled to the benefits you may
have specified to be provided to them on retirement
(see pages 6 and 7). For example:
• When you retired you may have chosen to have
continued instalments of your pension paid for a fixed
period or a lump sum if death occurs before age 75.
• Alternatively, you may have chosen to have a
pension with no continued instalments or lump sum
payable on death.
• You may have chosen to provide a pension payable
to a Spouse, Dependent Relative or Children upon
your death.
• You may have chosen to buy a pension with an
annual increase, or none at all, and any pension
payable to a Spouse, Dependent Relative or Child will
be increased in accordance with what you chose.
Pension increasesThe timing of any annual increases applied to the
pension will be determined by the insurance company
with whom the pension has been purchased.
LeavingIf you leave the Plan before you reach age 65, your
own contributions and the contributions paid or
credited by the Company will cease.
The benefits which you will receive will depend on how
long you have been a member of the Plan when you
leave. Special terms apply to those members who leave
to join the MMC UK Pension Fund.
Where you have less than three months’ contributory membership of the PlanYou will receive a refund of your own contributions,
including any AVCs, less tax.
If you have given up part of your salary via PaySmart,
the Company will make a special payment to you
equivalent to the contributions you would have paid,
less tax and National Insurance Contributions.
Where you have at least three months’ but less than two years’ contributory membership of the PlanYou will be entitled to a refund of your own
contributions, including any AVCs, less tax or a special
payment from the Company if you have given up part of
your salary via PaySmart. As an alternative to taking a
refund or the special payment from the Company, you
may transfer the full value of your Individual Account,
which includes any Company contributions, to another
pension arrangement. You will receive a transfer value
quotation shortly after you leave and you will have three
months in which to decide whether to transfer your
pension. See “Transferring your Individual Account” on
page 10 for further details. Otherwise you will be given
the cash refund, less tax, or the special payment from
the Company.
You may not leave your Individual Account in the Plan.
MMC UK Pension Savings Plan Section 3
Where you have two or more years’ contributory membership of the PlanYour Individual Account will remain invested in the Plan
until you retire, die or transfer it out of the Plan. With
MMC and Trustee consent, you can defer taking your
benefits (but not beyond age 75) or take them early (but
not earlier than age 50, (and age 55 from April 2010)
unless you are in ill health).
You may ask the Trustee for a statement of the value
of your Individual Account at any time. If you need the
statement because of a settlement on divorce or the
dissolution of a civil partnership, you should tell the
Trustee as further information may be needed from you.
The Trustee is not obliged to provide another statement
within 12 months of the date of your last request.
Transferring your Individual AccountIf you have at least three months’ contributory
membership of the Plan you may ask the Trustee to
transfer the value of your Individual Account to one of
the following registered pension arrangements as long
as the transfer takes place before you reach age 64:
• a pension plan with your new employer (if their plan
accepts transfers in); or
• a personal pension plan or stakeholder plan of your
choice, or
• an individual insurance policy in your name
(commonly known as a “buy-out” policy).
If you decide to transfer, the transfer value will be equal
to the value of your Individual Account. A deduction
may be made for expenses.
You should seek independent financial advice
before proceeding with a transfer. Various rules and
regulations apply to transfers and you will be advised if
these affect you.
Death before retirementIf you leave the Plan but keep your benefits in the Plan,
the full value of your Individual Account will be used
to provide a pension for your Spouse or a Dependent
Relative or Child in the event of your death before your
benefits come into payment.
10
11
Temporary absenceGeneralIf you are on temporary absence and continue to be
paid (including statutory sick pay) your membership will
continue, however contributions and death in service
benefits will be on a basis determined by the Trustee.
You will be notified if such special terms apply to you.
If you stop receiving contractual pay or statutory sick
pay, your membership of the Plan will end (except that
for 3 years you will usually be covered for the death in
service lump sum but at a reduced level). Under certain
circumstances your membership may be continued with
the Company’s and the Trustee’s consent, but it may
be on special terms.
Maternity leaveIf you are away from work to have a baby, your
membership under the Plan will continue during your
maternity leave.
During “ordinary maternity leave” (which is all statutory
and paid maternity leave) your membership of the
Plan, including your cover for death benefits, will be
continued. You will continue to pay contributions to your
Individual Account but based on your actual pay, not
the pay you would have received had you been working
normally. The Company will make up any difference in
your regular contributions at the level you were paying
before you went on maternity leave and will continue to
pay employer contributions based on the pay you would
have received had you been working normally.
During any “additional maternity leave” (which is any
unpaid maternity leave) your own and the Company’s
contributions will stop. However, you may be able to
make up your missed contributions (and thereby the
Company’s contributions) when you have been back
at work for six months. Your death in service lump sum
benefits will usually be continued during this period but
at a reduced level.
If you do not return to work after your maternity leave,
you will leave the Plan. The date you leave the Plan is
taken as the date when your own and the Company’s
contributions stop.
Paternity leaveSubject to certain qualifying conditions, you may take
up to two weeks of paid paternity leave on the birth (or
adoption) of a child. Your death benefits and your own
and the Company’s contributions will be continued on
the same basis as for ordinary maternity leave during
this period.
Adoption leaveDuring adoption leave your death benefits and your
own and the Company’s contributions will be continued
on the same basis as for maternity leave. References to
‘maternity leave’ should be read as ‘adoption leave’.
Section 3
Looking after your interestsThe Plan is established under a Trust and administered
by a corporate trustee, MMC UK Pension Fund
Trustee Limited. Amongst other things, this means that
the Plan’s assets are legally separate from those of
MMC and the Trustee is responsible for ensuring that
members’ interests are protected, as required by law.
The administration of benefits and the investment of the
Plan’s assets fall within the responsibility of the Trustee.
The members of the board of MMC UK Pension Fund
Trustee Limited serve as individual Trustee Directors.
Most of the Trustee Directors are appointed by MMC
but at least a third of them are Member Nominated
Trustee Directors.
You can contact the Trustee through the Administrator
at the address on page 2.
Keeping you in the pictureKnowing where you stand with your pension is very
important. As a Contributing Member of the Plan, you
will be sent regular information designed to keep you in
the picture about your benefits and the Plan in general.
You will also receive details of specific changes, events
and options relating to the Plan.
Opting out of the PlanIf you are an employee under age 30, you will be
automatically entered into the Plan.
However, you may decide not to join the Plan at all or
to opt out at a later date and make your own pension
arrangements. This decision should not be taken lightly
and you are encouraged to take independent financial
advice before opting out of the Plan or deciding not
to join.
If you do decide to opt out, MMC will no longer provide
pension benefits for you or your Spouse, Children or
Dependent Relatives, other than standard benefits for
leavers (see pages 9 and 10). Please note that once you
have opted out of the Plan your life assurance cover
will be reduced to two times your Base Salary, although
you may select a different multiple through “Options”.
Should you decide to opt out of the Plan, you will
need to complete a form, which can be obtained from
the Administrator at the address shown on page 2.
This must be submitted at least one month before you
wish to opt out. You will be treated as having left the
Plan one month after receipt of your completed opt
out form.
If you subsequently wish to rejoin the Plan, you will only
be able to do so with the Company’s and the Trustee’s
consent, and this may also be subject to special terms.
If you leave the Plan and contribute to a personal or
stakeholder pension arrangement, the Company will not
contribute towards it on your behalf.
Staying in touchKeeping in touch while you are employed by the
Company is one thing, but it’s easy to lose touch if you
move on.
If you leave and your benefits remain in the Plan, the
Trustee will keep a record of your last known address
so that you can be contacted about your benefits or
any issues affecting the Plan. It is important that you
keep the Administrator informed of any change of
address once you have left.
If for any reason you lose track of the Trustee’s or
MMC’s address, you will be able to contact them
through The Pension Tracing Service. In common
with other pension schemes, the Trustee provides
information about the Plan, including details of an
address at which it can be contacted, to The Pension
Tracing Service.
The address to write to is:
The Pension Tracing Service
The Pension Service
Tyneview Park
Whitley Road
Newcastle upon Tyne
NE98 1BA
Tel: 0845 6002 537
Website: www.thepensionservice.gov.uk
Further information
�2
MMC UK Pension Savings Plan Section 4
��
Help at handThe Trustee aims to give you clear, straightforward
information that is timely and easy to understand.
However, communication is a two-way process and
we recognise that there may be occasions when there
are questions you want to ask, or issues you would like
to discuss with someone. In the first instance, please
contact the Administrator at the address on page 2.
Seeing eye to eyeMost queries or problems can be dealt with and
resolved, informally, as they arise. However, in rare
cases a disagreement may occur that requires a
more formal procedure for its resolution. In these
circumstances a formal complaint may be made
through the Plan’s Internal Dispute Resolution
Procedure (IDRP).
The IDRP applies to matters concerning the Plan
which affect members and others who may have
an interest in the Plan. It does not apply to disputes
between employees and the Company or MMC, or the
Company or MMC and the Trustee. It cannot be used
for complaints or disputes which are already the subject
of court proceedings or under investigation by the
Pensions Ombudsman.
The IDRP is a two-stage process. Under the first stage
your complaint or dispute will be considered and
decided upon by the MMC UK Director of Pensions.
If you are happy with the decision, the process ends
there. However, if you are not satisfied with the result
of the first stage, you will have six months in which to
ask the Trustee to reconsider and decide upon your
complaint under stage two. Normally, a decision under
either stage will be made within two months.
Complaints and appeals must be made in writing and
must contain certain information. If you are unable,
or you do not wish, to make the complaint or appeal
yourself, you can nominate someone else to act on
your behalf.
The Trustee aims for formal complaints to be the
exception rather than the rule. However, should the
need arise, full details of the procedure are available
from the Administrator at the address on page 2.
Outside helpIn addition to the Plan’s own arrangements, the
Government has established two independent agencies
to help, should an issue arise which cannot be resolved
directly between a pension scheme and a member or
other person who may have an interest in it. They are
The Pensions Advisory Service (TPAS) and the
Pensions Ombudsman.
TPAS is an independent, voluntary service that is
available to assist members and beneficiaries of the
Plan in connection with any pension queries they may
have at any time, or any difficulties they have failed to
resolve with the Trustee or Administrator of the Plan.
TPAS will offer advice on a particular case and, if
necessary, may refer it to the Pensions Ombudsman.
The address of TPAS is:
11 Belgrave Road
London
SW1V 1RB
Tel: 0845 6012923
Email: [email protected]: www.pensionsadvisoryservice.org.uk
The Pensions Ombudsman may investigate and decide
upon any complaint or dispute of fact or law referred
to him in relation to an occupational pension scheme.
However, the Pensions Ombudsman normally insists
the matter is first dealt with through the Plan’s IDRP
and raised with TPAS. If you have any complaint or
dispute that cannot be resolved by the IDRP or by
TPAS, you may refer it to the Pensions Ombudsman at:
11 Belgrave Road
London
SW1V 1RB
Tel: 020 7834 9144
Email: [email protected]: www.pensions-ombudsman.org.uk
Section 4
The Pensions RegulatorThe Pensions Regulator helps to ensure that work-
based pension schemes in the UK are properly run.
It is able to intervene in the running of schemes where
trustees, employers or professional advisers have
failed in their duties. The Pensions Regulator can be
contacted at the following address:
Napier House Trafalgar Place Brighton BN1 4DW
Tel: 0870 606 3636
Email: [email protected] Website: www.thepensionsregulator.gov.uk
Independent financial adviceIf you need any help in locating an independent
financial adviser, you may wish to contact the
following organisation which promotes the benefits
of independent financial advice to consumers and
businesses and which has details of independent
financial advisers close to where you live or work from
around 9,000 independent financial adviser locations
UK-wide.
Website: www.unbiased.co.uk
Please note that you are responsible for your choice of
independent financial adviser.
Data protection legislationThe Trustee works together with MMC to provide the
benefits under the Plan. In order to administer the Plan
properly, the Trustee (or other parties who act on behalf
of the Trustee) needs to hold information about you and
your entitlements. Only such details as are required to
fulfil obligations to members and legal and regulatory
obligations are collected and stored.
Your personal data is treated in strictest confidence and
is only disclosed to others in limited circumstances, for
example to:
• MMC and other Companies in connection with the
operation of the Plan,
• insurance companies to arrange particular
entitlements,
• professional advisers of the Trustee, and
• government or regulatory organisations, if the
Trustee is obliged to do so.
Disclosure may be within or outside the UK.
Where you are asked to supply information relating to
your dependants, you should inform those individuals
first; they might like to read this guide to find out how
personal data is handled. Where information from your
doctor is required, this will not be sought without your
permission. If you have a financial representative or
independent financial adviser, the Trustee will liaise with
that person or firm and share information only on your
written instructions. If you die while you are a member
of the Plan the Trustee will liaise with your personal
representative(s), relatives and possibly your work
colleagues who may supply us with information relating
to you. If information is used to conduct statistical
analysis and surveys, you would not be identified
personally.
Please note that all the information asked for is
necessary and without it the Trustee would not be able
to administer your benefits under the Plan.
The Trustee is the data controller under the Data
Protection Act 1998.
Supplementary fundAny assets in the Plan which are not allocated to a
particular member’s Individual Account are held in a
supplementary fund within the Plan. This fund may from
time to time be used, for example, to credit a member’s
Individual Account with the contributions due from the
Company or to meet Plan expenses.
14
MMC UK Pension Savings Plan Section 4
1�
The State Pension SchemeThe State Pension Scheme is in two parts:
• the Basic Pension (the “old age” pension) which is
a flat-rate pension paid to everyone who has paid
enough National Insurance Contributions, and
• the State Second Pension (S2P) which is based on
an employee’s earnings between a Lower Earnings
Limit and an Upper Earnings Limit throughout his or
her working life.
State pensions are paid from State Pension Age, which
is currently 65 for men and 60 for women. However, a
common State Pension Age of 65, for both men and
women, is being phased in by the Government between
the years 2010 and 2020.
As a member of the Plan you will participate fully in
the State Pension Scheme, so you will be entitled to
receive the Basic State Pension, subject to a full National
Insurance Contribution record, and to earn benefits
in the State Second Pension which are payable from
State Pension Age.
You may obtain a forecast from the Department for
Work and Pensions (DWP) of how much pension you
are likely to receive from the State. This can be done
at any time by completing Form BR19, available from
your local Benefits Agency office or from the Directgov
website (www.direct.gov.uk), and returning it to
the DWP.
Marital statusIt is your responsibility to ensure that the Trustee is
kept informed of any change in your marital status.
If you are not legally married to your partner (or are
not in a registered civil partnership) and there is no
Spouse’s pension payable, the Trustee may consider
paying a pension to a Dependent Relative, subject to
certain criteria. Any such payments are made at the
absolute discretion of the Trustee.
Divorce or dissolution of a registered civil partnershipIf you get divorced or your registered civil partnership
is dissolved, your benefits under the Plan may become
subject to a court order. This would require the Trustee
to allocate a specified part of your retirement benefits
and death benefits under the Plan to your ex-spouse
or your ex-civil partner. Your State Second Pension
benefits may also be affected.
If a court order applies to your Plan benefits, you will be
given details of the reduction to apply to your benefits.
Any pension deducted from your own entitlement may
have an impact on your Lifetime Allowance and you
should seek further advice if this applies to you.
On divorce or dissolution you should tell the Trustee
about the changes in your personal details. You should
also consider changing any Expression of Wish form
you have previously completed (see page 2).
Insured benefitsThe lump sum benefit and pensions payable on death in
service are secured under an insurance policy specifically
to provide those benefits. In normal circumstances, you
will be covered for the full benefit automatically without
any enquiry into your state of health. Restrictions may be
imposed on your benefit in certain circumstances and
you will be notified if these apply to you.
Section 4
Income taxAll Plan pensions are paid subject to PAYE income tax,
where appropriate.
Inheritance taxUnder current legislation, lump sum death in service
benefits paid under the Plan are not normally subject to
Inheritance Tax. To achieve this, the Plan is arranged
so that the Trustee has absolute discretion to decide
who receives such a lump sum payment. Whilst the
Trustee is not bound to follow your wishes it will take
them into account. It is therefore important that you let
the Trustee know who you would like to receive the
lump sum by completing the Expression of Wish form
accompanying this guide and keeping it up-to-date.
Expression of Wish forms can be downloaded from the
Plan website should your circumstances change or you
change your mind at any time.
HM Revenue & Customs registration and restrictionsThe Plan is registered with HM Revenue & Customs
under the Finance Act 2004. This means that the Plan
and its members receive important tax concessions.
The important tax advantages that are available under
the Finance Act 2004 are:
• For most employees, full tax relief on your
contributions up to 100% of your taxable earnings
and on the Company’s contributions (subject to the
Annual Allowance).
• A cash sum option on retirement, which will be
tax free (unless the value of your benefits from
all pension arrangements exceeds the Lifetime
Allowance).
• Lump sum death benefits are normally tax free.
• You are not taxed on the Company’s contributions.
• Favourable tax relief on the Plan’s investments.
These tax concessions only apply to the value of your
benefits up to certain levels i.e. any benefits paid in
excess of the Lifetime Allowance or contributions paid
in excess of the Annual Allowance will be subject to
additional tax charges. The Lifetime Allowance and the
Annual Allowance are usually increased annually by
HM Revenue & Customs.
You should keep track of your Lifetime Allowance
and you will be required to provide the Trustee with
evidence about your available Lifetime Allowance
before benefits come into payment.
RulesThe Trustee administers the Plan in accordance with
the Rules which govern the Plan. The Rules can be
amended by the Trustee and MMC at any time subject
to restrictions implied by law.
This guide provides a summary of the Plan and does
not cover all the Plan’s detailed provisions which are
set out in the formal Rules. Whilst every effort has been
made to reflect accurately the Rules, if there are any
differences between this guide and the Rules, the Rules
will always take precedence. In addition, this guide
does not amend the provisions of the Rules.
The Rules may be inspected at the office of the
Administrator by prior arrangement. Alternatively, copies
may be obtained from the Administrator, at the address
on page 2, although a charge may be made.
DiscontinuanceSubject to the Plan’s Rules, MMC reserves the right
to discontinue the Plan at any time. If your benefits or
rights are affected you will be given written notice.
Giving up your benefitsExcept in limited circumstances allowed by law and the
Rules, your benefits under the Plan cannot be assigned,
forfeited or used as security for a loan.
16
MMC UK Pension Savings Plan Section 4
Please see overleaf for Definitions
DefinitionsAnnual Allowance is a limit set by the Government on the amount by which your pension benefits and/or pension savings can
grow in a year (6 April to 5 April) before being subject to tax.
The Annual Allowance has been set at £255,000 for the 2010/11 tax year. It will remain at that level until the 2015/16 tax year, after which it will continue to be reviewed.
Base Salary is your annual rate of basic yearly remuneration. It does not include car allowances, bonuses, commissions, overtime earnings or any other benefits. It is before any adjustments as a result of “Options”.
Child/Children on death in retirement means your children or your Spouse’s children who are financially dependent on you and are under age 23 (or beyond if mentally or physically disabled). On death before retirement, it means your children or your Spouse’s children who are financially dependent on you and are under age 18, or under age 23 if still in full-time education (or beyond if mentally or physically disabled).
Company/Companies is the company that employs you and which has elected to participate in the Plan.
Contributing Member is a member who is currently paying contributions to the Plan and building up retirement benefits.
Dependent Relative/ is any person, other than a Child, who, in the opinion of the Trustee, is dependent on you at the date ofRelatives your death.
Final Pensionable Salary is the highest annual average of any 36 consecutive months’ Pensionable Salaries in the period of 10 years ending on the date of your death.
If your service was less than 36 consecutive months, appropriate adjustments will be made.
Individual Account is a notional account set up in your name whilst contributing to the Plan.
Lifetime Allowance is a total limit set by the Government on the amount of pension savings that will qualify for tax relief. This allowance is £1.8 million for the 2010/11 tax year. It will remain at that level until the 2015/16 tax year, after which it will continue to be reviewed.
The Lifetime Allowance will apply to all of the pension benefits you build up over your entire working life and will be triggered by a benefit crystallisation event such as payment of retirement income or death benefits.
Lower Earnings Limit is the level of earnings at which benefits under the State Second Pension start accruing (£5,044 for the tax(LEL) year 2010/11).This figure is set by the Government and adjusted each year. It is broadly equal to the Basic
State Pension.
MMC is Marsh & McLennan Companies UK Limited.
PaySmart is the method by which member contributions will normally be made on your behalf by the Company to the Plan.
Pensionable Salary is your Base Salary less an amount equal to the LEL in force at the relevant time. For members working on a part-time basis the LEL is pro-rated before being deducted.
Plan is the MMC UK Pension Savings Plan.
Spouse is the person (if any) to whom you were legally married at the date of your death. A registered civil partner will be treated the same as a Spouse for pension purposes.
State Pension Age is currently 65 for men and 60 for women, but from 2010 will be equalised at 65 for both. This change will be phased in over a 10-year period from 2010. It will be increased again to age 68, and this will be phased in over the period from 2024 to 2046.
State Second Pension provides a pension in addition to the Basic State Pension. As a member of the Plan you participate (S2P) fully in S2P.
Upper Earnings Limit is the level of earnings at which benefits under the State Second Pension cease accruing. It is adjusted (UEL) by the Government each year.
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This booklet applies to employees eligible to join the MMC UK Pension Savings Plan only.
