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Schedule 3

Summary of Schedule 3:

  • Final Salary pension - choice of three different levels
  • Life Assurance & Spouse's pension
  • Employee Cost 7%- 17% (less tax)

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.

Your core pension record.
Legal & General – Manage your Account and AVCs
FAQ

Schedule 3 - Scheme Booklet 

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.

 

Contributions

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

Death In Service

Life Assurance

Schedule 3 provides life assurance of 3 times your Annual Earnings plus a lump sum equal to the contributions paid by you into the Scheme, plus return of any Additional Voluntary Contribution fund.

 

Expression of Wish

The death in service lump sum does not go directly to your estate, instead the Trustee has discretion to decide who receives the payment. You should therefore complete an Expression of Wish nomination for the Trustee to take this into account. Please access Your Core Pension Record above to update your Expression of Wish.

 

Spouse's Pension

Your Spouse would receive a pension calculated as the highest of the following:

·         50% of Total Pension Percentage times Final Basic salary, and

·         20% of Contributions Earnings for the last complete Scheme Year.

A Spouse normally means your married partner or someone living with you as husband and wife. If you do not have a Spouse but you do have someone who is financially dependant on you the Trustee has a discretion to pay them a pension on your death.

 

If you are no longer an active member of the Scheme

If you have left the Scheme or are already in receipt of a pension please e-mail ukpensions@airbus.com for details of the benefits payable on death

 

Early retirement due to ill health

Immediate Pension

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.

 

Incapacity

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.

 

Chronic Ill-Health

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.

Retirement

Pension Increases

Increases will apply after you retire.

Airbus Retirement Calculation 2014 07 24

How to calculate your pension

Spouse's Pension

Your surviving Spouse would receive a pension equal to 50% of your pension on your death. Also, if you die within five years of retirement a lump sum would be paid. See the Pensioners section of this website for more details about your benefits after retirement.  

Tax free cash lump sum

Under current tax rules, you may exchange part of your pension for a tax free cash sum at retirement. The cash sum allowance is broadly equal to 25% of the capital value of your pension. You can decide how much cash you want (if any) up to the cash allowance. If you give up your pension for cash the Spouse's pension is unaffected and remains 50% of the pension value before the cash was taken.

Retirement Age

The normal retirement age of the Scheme is 65, you may retire earlier than age 65 with Company consent, the earliest age is 55. Your pension will be reduced on early retirement because the pension will be paid for longer. The current reduction factor is 4% for each year before age 65 with complete months pro rata. If you work beyond age 65 you will continue to build up pension until your actual retirement date.

Additional Voluntary Contributions (AVCs)

The value at retirement of any AVCs you have paid, can be taken as part of your Cash Allowance, or it can be used to "buy" extra pension from the Scheme. The Scheme offers you two rates of pension: either for your lifetime only, or to include 50% pension to your surviving Spouse on death. In either case both pensions increase whilst in payment and the five year guarantee on death will be included.

Alternatively you may use the Open Market Option to purchase an annuity from an insurance company of your choice.

The Retirement Process

You can plan for your retirement by visiting Your Core Pension Record to run retirement quotes. Also if you have Additional Voluntary Contributions (AVCs) you can include your fund into your retirement quote by getting the value from the Legal & General website. If you wish to consider retirement please speak to a member of the Pension Team or email ukpensions@airbus.com.

Pension Flexibilities

Schedule 3 is a final salary pension scheme and therefore is not affected by the pension flexibilities to be introduced on 6 April 2015.

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.

or

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

Additional Voluntary Contributions (AVCs)

You can pay Additional Voluntary Contributions (AVCs) to build up higher benefits at retirement under the Scheme. It is also possible for you to save extra money for your retirement outside of the Scheme in private pension arrangements.

Paying AVCs into the Scheme

AVCs are invested with Legal & General. You can register for the Manage Your Account website.

The Scheme employee contribution limit is 19% of your gross pay (you need to include your "core" contributions within this). Deductions must be through the payroll, and you receive tax relief at source, although AVCs do not qualify for Smart Pensions.

If you want to start to pay AVCs please contact the Pension Mailbox: ukpensions@airbus.com

If you already have an AVC account, you can change the amount you pay by completing the Paying extra form for existing contributors.

The Fund Value at Retirement 

At retirement the fund value of your AVCs can be taken as either cash, subject to the maximum cash allowance or converted to extra pension.

Where Can I Invest My AVCs?

You can find out about the investment options available on this page.

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.

Dictionary

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.

Annual Allowance
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.

Basic Contributions
Contributions you are required to make towards Core Benefits.

Basic Salary
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).

Contribution Earnings
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.

Participating Employer
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.

Pensionable Service
The number of years and complete months during which you have contributed to the Scheme.

Scheme Year
Which is the 6th April to the following 5th April

Smart Pensions
Use salary sacrifice instead of standard deductions from pay which means that both you and the company pay less National Insurance.

Spouse
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.

UK pensions

I want to join the scheme

UK Retirement Plan

Investment options

Current News and past issues of Pension News

Schedule 1

Schedule 2

Schedule 3

FAQ

UK pensions contacts

Pension Consultative Committee

Pensioners

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