Schedule 3 is closed to new entrants and covers members who transferred their benefits from the BAE Systems Pension Scheme (Level 125, 167 or 200).
Schedule 3 provides a pension based on your Final Basic Salary, plus financial protection for your family if you die in service or, an immediate income if you have to give up work permanently due to serious ill-health.
Visit Your Core Pension Record to get secure access to view your own pension record, run retirement quotes and update your Expression of Wish nomination (for the life assurance).
If you pay AVCs these are now invested with Legal & General. You can visit the Legal & General websiteto check the value of your AVCs and change your investments.
How it works
Schedule 3 provides a pension which is calculated as follows:
Total Pension Percentage x Final Base Salary
Total Pension Percentage is the sum of your Individual Pension Percentages for each year of Pensionable Service.
Individual Pension Percentage
Your Individual Pension Percentage is calculated at the end of each Scheme Year according to the Base Pension Level you have chosen:
Level 125 means 1.25% (or 1/80ths)
Level 167 means 1.67% (or 1/60ths)
Level 200 means 2.00% (or 1/50ths)
The Individual Pension Percentage is calculated for each Scheme Year as follows:
Contribution Earnings for: Scheme Year / basic salary at start of Scheme Year x Base Pension Level
Contribution Earnings is calculated as your annual earnings less a fixed deduction of £1800.00
You can change your Base Pension Level at the start of any Scheme Year.
Transfer In Benefits
Some members may have transferred in benefits from other pension schemes. Such transfer payments would have bought you a Transfer In Pension Percentage which will be used to top up your pension based on your Final Basic Salary on leaving.
The Trustees no longer accept transfers into the Scheme.
The cost of providing the benefits is shared. Employees, who currently pay the following rates of contributions based on their contribution earnings (see below), and the Company who pays the balance of the cost.
Level 125 - 7.29%
Level 167 - 9.29%
Level 200 - 17.00%
Additional Voluntary Contributions (AVCs)
You can pay extra contributions to build up a fund to buy extra benefits at retirement. You can choose how to invest your AVCs from a range of funds with Legal & General.
Protection for you and your Family
If you die in service you will be covered for three times your annual earnings as a lump sum, plus an immediate pension to any surviving Spouse.
If you have to stop work permanently work due to serious ill health you may receive an immediate enhanced pension.
Protection for your family on death
Early retirement due to ill health
An immediate pension could be payable to you if you are forced to give up work at any age as a result of permanent ill-health.
The circumstances in which you could retire due to ill-health, and the level of pension are subject to certain conditions and you must have consent of both the Trustee and your employer.
If ill-health prevents you from carrying out your normal job you might be considered for an incapacity pension. This could provide you with an immediate pension based on your accrued benefits and the Trustee may decide to waive or reduce the reduction factor usually applied on early retirement.
If ill-health prevents you from ever carrying out any regular employment for any employer you might be considered for a chronic ill-health retirement. This could provide you with an immediate unreduced pension based on what you would have received had you remained in service to age 65 (if you are in Schedule 1 half of your future service would be included in the calculation).
Process for making an application
Agreement for ill-health retirement is required from both your employer and the Trustee. The decision will be based on medical evidence and taking into account your particular circumstances. Please speak to your HR department if you think this may apply to you.
Once an ill-health pension has been granted the Trustee may carry out periodic reviews and could reduce, suspend, or stop the ill-health pension if your health improves.
How to calculate your pension
Leaving the Company
If you leave the Company you stop paying contributions to the Scheme and the following options will apply.
If you have MORE than two years' membership
You will have a deferred pension entitlement.
You may transfer the capital value of your deferred pension to another registered pension scheme.
The deferred pension is calculated using the same method as for retirement but based on your earnings and service to your date of leaving, and increases are added between your leaving date and retirement. If you have AVCs these will remain invested until your benefits come into payment.
You can run a calculation of your estimated deferred pension using the Your Pension Record link.
The Scheme administrator will contact you automatically to inform you about your benefits, normally within two months of your leaving date.
Opting Out of the Pension Scheme
If you opt out of the Scheme but remain in employment the same options as described above will apply.
If you subsequently wish to rejoin the Scheme you will only be able to join the Airbus UK Retirement Plan and there will be restrictions on the death in service and ill health benefits.
See Opting Out of the Scheme section for more details.
Moving to another Airbus company
If you transfer to another Airbus company in the UK that participates in the Scheme you may be able continue your membership without a break in pensionable service.
If you transfer to another Airbus Group company overseas you may be able to stay in the Scheme if your employment is treated as a secondment. Please contact your HR Department if this may apply to you.
Saving more for your retirement
How does Smart Pensions work?
Your earnings are reduced by the rate of your basic contributions and the employer pays the equivalent sum into the Scheme along with its employer contributions. All pay related benefits (e.g. overtime, holiday, pay reviews etc) continue to be based on your Reference Salary, i.e. your earnings before the salary sacrifice.
Does everyone benefit from Smart Pensions?
There are some employees who might not benefit from Smart Pensions including employees on very low pay.
If you believe you may be adversely affected by Smart Pensions we recommend that you take independent financial advice.
Joining Smart pensions
Employees joining the Scheme will automatically be included in Smart Pensions unless they declare they wish to opt out of this method of paying contributions.
Full details of how Smart pensions work are included in the Smart booklet.
Additional Voluntary Contributions (AVCs)
Voluntary payments made in addition to your contributions to the Scheme. They will be invested to provide extra benefits at retirement.
The maximum amount of pension benefits that can be built up in any one tax year without attracting a tax charge. The Annual Allowance for tax year 2017/18 is £40,000, but this may be less if you are an additional rate tax payer (45%) or if you have flexibly accessed benefits elsewhere. Please contact the Pensions Team for more information.
Base Pension Level
Base Pension Level is the basis upon which your pension builds up each year. There are three levels that produce different rates of build-up of base level pension - 1.25%, 1.67% and 2.00%. This rate, multiplied by your Contribution Earnings and divided by your Basic Salary determines the value of the Individual Pension Percentage you accrue each year.
Contributions you are required to make towards Core Benefits.
Your annual rate of basic pay received from your employer. The Scheme limits the level of pay that can count towards contributions and benefits. This is called the Scheme Earnings Cap (see Scheme booklet for details).
Your gross taxable earnings, excluding travel, any subsistence and other temporary allowances, such as bonuses, redundancy payments and cash equivalents of benefits in kind received from the employer in any Scheme year, less a fixed deduction of £1,800.
Final Basic Salary
Basic Salary averaged over the last 12 months ending on the last day of the calendar month in which you leave service or die (whichever occurs first). This is subject to the Scheme Earnings Cap (see Scheme booklet for details).
Lifetime Allowance (LTA)
The personal limit against which the capital value of an individual's total pensions (not including State pensions) is measured. Any benefits above this limit will be liable for an additional tax charge. The Lifetime Allowance is currently £1 million.
Normal Pension Age
Your 65th birthday.
Airbus Operations Limited, Airbus Defence and Space Limited (the Principal Employer), Airbus Limited, Airbus Helicopters UK Limited, SSTL and any other employer admitted by the Principle Employer and the Trustee to the Scheme.
The number of years and complete months during which you have contributed to the Scheme.
Which is the 6th April to the following 5th April
Use salary sacrifice instead of standard deductions from pay which means that both you and the company pay less National Insurance.
Your legal husband or wife by marriage.
The Trustee also recognises Civil Partners in respect of benefits accrued after 5 December 2005, or the date entered into a civil partnership whichever occurs first.
The Trustee may at their discretion include a person who in their opinion is/was living with you as husband and wife but to whom you are not legally married.