Information about the Invensys Pension Scheme
The formal Trust Deed and Rules of the Scheme govern how the Scheme is run and how pension benefits are worked out. If there is any discrepancy between the Trust Deed and Rules and the information set out in this document, the Trust Deed and Rules shall prevail.
This document is only intended to be a basic guide, which principally describes the application of benefits for members who were Invensys employees in the United Kingdom (UK) and who joined the Scheme on or after 6 April 2000.
If you joined the Scheme prior to 2000, please also refer to your former scheme booklet or alternatively contact the Administrator for further details.
On retirement you will receive your Scheme pension paid monthly in advance for the rest of your life and you may choose to take a tax-free cash sum, subject to limits set by HM Revenue & Customs (HMRC).
If you have not yet retired, your pension will be deferred until you reach retirement age. Your pension benefit will increase each year from leaving pensionable service until retirement to protect against the effects of inflation.
You may apply to start receiving your pension before your normal retirement age if you are at least age 50 and you have either ceased significant gainful employment or, were an active member of the Scheme on the date it was closed to accrual on 31 March 2015. If you are allowed to receive an early pension it will be reduced to take account of it being paid earlier and therefore probably for longer.
In addition to the basic or early retirement benefits, there are also options for:
Providing an extra pension for a spouse or dependant
Exchanging your future pension increases for a larger pension now, known as ‘Pension Increase Exchange’
Cash Equivalent Transfer Value – you may opt to transfer your pension entitlement to another registered pension scheme
Full details of the options available to you will be provided approximately 6 months prior to your Normal Retirement Date, unless you opt to retire earlier. Please make sure that you keep the Administrator up to date with your home address so that we can keep in contact with you about your pension whilst it is deferred, quoting your pension reference number on all correspondence.
You may delay claiming your pension until after you reach normal retirement age, this is known as late retirement. If you wish to delay payment of your pension, please contact the Administrator with an estimate of your expected retirement date so that we can contact you at the appropriate time.
If you do not tell us when you expect to retire, you may lose some of your benefits. The Administrator can provide further information on how late retirement works if you are interested in this option.
After you retire and your pension has gone into payment, your pension will increase on 1 April each year. For the majority of benefits, the amount of the increase is calculated by looking at the annual rise in the Retail Prices Index (RPI) in the 12 months to December. Pension earned up to 5 April 2006 is limited to a maximum increase of 5% in any year and subject to a minimum increase of 3%. Pension earned after this date is limited to a maximum increase of 3% in any year.
Some elements of your pension increase at different rates depending on when you were a member of the Scheme and which Company you worked for. Your retirement letter provides details of how each element of your pension will increase.
The same increases are also applied to the pension payable to your spouse after your death.
If you choose the Pension Increase Exchange option, your increases will be limited to statutory increases only. Full details of this option and how it affects your future benefits, and those of your spouse, will be supplied at retirement.
Ill Health Retirement
If you become ill prior to retirement, you may be able to take your benefits prior to age 50, please contact the Administrator for further details.
If you become terminally ill prior to retirement, the Trustee may be permitted to convert your pension to a one-off lump sum. This is subject to quite strict rules laid down by HMRC so please contact the Administrator if you believe you may qualify.
Death before retirement
If you die before you are able to claim your pension, a pension may be payable to a surviving spouse or civil partner at a rate of 50% of the pension increased from date of leaving to date of death. Children or other dependant pensions may also be payable.
A lower rate of spouse's pension will be paid if you are survived by a spouse who is more than ten years younger than you.
A lump sum death benefit may also be payable equal to five times the yearly amount of your deferred pension increased to date of death, plus any additional voluntary contributions you may have paid.
Death after retirement
The Scheme provides pensions for your surviving spouse or civil partner at the rate of 50% of the member’s pension, and a lump sum if you die within 5 years of retiring.
The lump sum is equal to five times the value of your annual pension when you retired, less all pension and tax free cash paid since you retired.
A pension is automatically payable to your spouse or civil partner and to any dependant children under 16 years of age. A pension may be payable to dependant children up to age 23 if they are unmarried and in full time education. The Scheme also provides the Trustee with discretion to award a pension to anyone who could be considered financially dependant on you, such as a co-habiting partner.
You can get more information on how the death benefits are worked out by telephoning the Administrator.
Important note about paying the lump sum benefit
The lump sum is paid out by the Trustee who has to decide who will receive the money. To help the Trustee, you should fill in a Nomination Form to tell them who you would like to receive the lump sum benefit. You may change your nomination at any time by filling out a new form and returning it to the Administrator. Please note that your nomination will only be considered valid if it has been received and acknowledged by the administration team.
These forms are available from the website or by contacting the Administrator.
Instead of receiving a pension from the Scheme, you can investigate the option of transferring your benefits to another scheme of your choice. Please contact the Administrator for further details.
Please note you have the right to request one transfer value free of charge every twelve months until you reach normal retirement age. You may be permitted to transfer your benefit to another scheme after you reach normal retirement age, but only at Trustee discretion.
The government recognises that making choices that affect your income in retirement can have a lifelong effect, and considers that taking appropriate independent advice first is also a key step in the decision process if you are looking to take a transfer. The government has introduced the requirement for trustees to check that members have taken advice if their transfer value based on DB benefits is more than £30,000.
The Pensions Regulator, the Pensions Advisory Service (TPAS) and HM Revenue & Customs (HMRC) have issued strong warnings about pension scams and the potential risks of taking up offers which claim to be able to release cash from your pension before you reach age 55, or in larger quantities than are currently allowed under the law (sometimes referred to as ‘pension liberation’ ‘early pension release’ or ‘pension loans’). You can find more information about the consequences of these offers at:
Pension sharing provisions came into effect for divorce proceedings commencing on or after 1 December 2000. Your pension is a valuable asset and as such its cash equivalent or transfer value may be taken into account along with your other assets.
The aim of pension sharing is to separate your ex-spouse’s benefit entitlement from your own, so there is a ‘clean break’ settlement. Courts can order the pension rights of either spouse, up to the time of the divorce, to be shared between the two parties. In Scotland, only benefits earned during the marriage can be shared. If you enter into a registered civil partnership after 4 December 2005 and the partnership is subsequently annulled or dissolved, then your ex-civil partner will be able to seek a pension sharing order as part of their settlement. The pension sharing order will work in the same way as for an ex-spouse.
A pension sharing order will result in a percentage of your cash equivalent being shared with your ex-spouse (although in Scotland the order can specify an amount instead of a percentage).
If you ask for a cash equivalent in connection with possible divorce proceedings, you should be aware of the following:
The cash equivalent will be worked out in accordance with instructions from the Scheme Actuary.
The Trustee will not provide the cash equivalent to your ex-spouse unless you or the Court has asked them to.
If your ex-spouse is awarded any entitlement through a pension sharing order, it will be used to buy benefits in an approved pension arrangement of his or her choice. This might be a personal pension plan, a buy out contract, your ex-spouse’s own occupational scheme or a Stakeholder Pension. Except in exceptional circumstances, the entitlement will not be retained in the Scheme.
There will be an administration charge for providing anything other than the initial cash equivalent value, and this will be clearly stated on correspondence from the Trustee. The pension sharing order will normally include details of which of the parties to the divorce is to meet the cost of the pension share.
Specific provisions relating to the Defined Contribution section only
From April 2007, members were given the chance to save into a Defined Contribution (DC) section of the Scheme. The level of DC benefits available to you when you retire will depend on:
the contributions paid in;
the investment returns achieved on those contributions, net of charges; and
the cost of buying benefits when you retire
Choice of funds
Legal & General Investment Management (LGIM) is the investment manager. If you wish to self-select your funds, the following investment options are available for you to choose from:
UK Equity Index
Global Equity Fixed Weight (50:50) Index
World Equity Index - GBP Hedged
Ethical Global Equity Index
Corporate Bond All Stocks Index
Over 5 Year Index Linked Gilts Index
The funds are “passively” invested, which means they are invested to track an index. Annual management charges are in the region of 0.1% to 0.165% of the fund value, depending on the fund. These charges are deducted from your funds. The other costs associated with the Scheme are paid by the Company.
You can switch your existing funds into other available investment funds at any time. There is no charge for this; however we do ask that you limit the changes to three per year. Wherever possible, changes will take place at the end of the month after you have asked us to make the change.
Descriptions of the funds are contained in LGIM factsheets, which you can download from the DC page on this website.
There are two “Lifestyle” options available, where funds will be invested dependent on your age and target retirement date. For example, at younger ages the funds are invested wholly in equities. As you near your Target Retirement Date (TRD) your funds start to switch from the higher risk investments (equities) to lower risk investments (gilts and cash), so as to provide more certainty about the value of your benefits at retirement. Once you have selected a lifestyling option this will happen automatically.
There are two Lifestyle options available; the first targets annuity purchase at retirement and the second targets cash.
The tables below set out the two Lifestyle fund matrices and show the percentage of your fund invested in each type of asset.
When you retire you have the option of using your DC funds to increase your defined benefit pension paid by the Scheme or to take the benefits as a cash lump sum. You also have the option to transfer your benefits in order to access the flexible benefits introduced by the Government in 2015 Full details of the options available to you will be provided nearer your Target Retirement Date.
From April 2015, the Government allows you more flexibility and choice in how and when you can access your pension savings. The full flexibilities are not available directly from the Scheme but you may transfer your pension benefits to access additional flexibilities elsewhere. The Government offers a free and impartial guidance service (Pension Wise) to help people who are aged 50 or over with defined contribution pension savings to understand the choices they have. You can get further information on Pension Wise at https://www.pensionwise.gov.uk/
General information about the Scheme
At least every three years, the Trustee must carry out a full review of the Scheme’s financial situation, known as a valuation, to make sure that enough money is being paid into the Scheme to pay current and future pension benefits. The Trustee appoints an Actuary to carry out this work.
When the valuation is complete, the Trustee and the Company consider the report and must decide what action, if any, needs to be taken to deal with the report’s findings.
The general areas for consideration are:
Contribution levels – The Trustee and Company will agree whether contributions are required at least once every 3 years as part of the triennial valuation
Surplus or deficit – If the report identifies a surplus then pension benefits may be improved or contributions may be reduced. If a deficit is identified, the Trustee and the Company would have to agree actions to correct the situation, for example increase contributions.
Annual Trustee Report and Accounts
Copies of the full document are available at www.invensyspensions.co.uk or on request from the Administrator.
Background to the Scheme
Until 31 October 2004 the Scheme was open to any eligible employee of an Invensys participating company. On 1 November 2004, the Company closed the Scheme to new entrants. The Company was acquired by Schneider Electric in 2014 and the Scheme was closed to future accrual on 31 March 2015.
Constitution of the Scheme
The Scheme is treated as a registered scheme by HM Revenue & Customs (HMRC).
The information in this booklet is a summary of the main features of the Rules of the Scheme applicable to members who began pensionable service on and after 6 April 2000. It does not override the Trust Deed and Rules which apply at all times. Copies of the Trust Deed and Rules are available from the Administrator.
The Trustee is registered under the Data Protection Act 1998, entry number C1235058.
The Scheme registration number at the Pensions Regulator’s office is 10143856.
Queries and the dispute resolution procedure
We operate a two stage process for resolving disputes, which is open to any member, or other person with a relevant interest in the Scheme.
The first stage requires you to write to the Manager at the Administrator with full details of your dispute. The Manager will consider the matter and reply to you with their decision within two months of receiving your letter. In some circumstances, the Manager may consider that it is more appropriate for your complaint to be escalated directly to the second stage of the process described below. If this is the case you will be notified and given the timeframe for a response.
If you are not satisfied with the reply, you may appeal by letter within six months of the date of the reply you received. You should send your appeal letter to the Chairman of the Pensions Governance Committee (PGC), asking for the original decision to be reconsidered and giving your reasons why you are unhappy with the decision. Your appeal will be referred to the Trustee and you will receive a reply from the Chairman of the Pensions Governance Committee (PGC) as soon as the Trustee has made its decision.
If you feel that you would like some assistance to help you deal with your dispute you can contact The Pensions Advisory Service. If you are still dissatisfied with the decision from the Trustee and would like your dispute to be considered further, you can contact the Pensions Ombudsman (see below).
Individual benefit statements
Deferred members may ask for an annual statement showing their up to date pension benefits.
HM Revenue & Customs and Scheme limits
In April 2006, the Finance Act 2004 replaced the old Inland Revenue limits which previously applied to contributions and benefits under exempt approved pension schemes with two new restrictions:
Annual Allowance: this is a new maximum amount which can be paid tax free into all your pension arrangements each year. This has been set at £40,000 for the tax year 2016/2017 (as this is a cash limit, the legislation sets out special factors to apply to final salary pensions to work out whether the increase in their value over the course of a year exceeds this limit). For most people this means that they now have the option to choose how much they want to save in order to provide a pension at retirement.
Lifetime Allowance: this is a new limit on the amount of money that can used to provide retirement and death benefits. It has been set at £1,030,000 for the tax year 2018/2019 so as a general guide, if you have never earned more than £50,000 a year it is very unlikely that your benefits will exceed the Lifetime Allowance. If either the Annual Allowance or the Lifetime Allowance limits are exceeded, you will incur tax charges. Any such tax charges arising in relation to pensions from this Scheme will normally be deducted from your benefits before payment. However, these limits have been set high enough so that most people can continue to make retirement provision as they do now (or even make additional provision) without having to pay any additional tax.
In addition, the Scheme sets its own pension benefit limits. The most important of these allows for a maximum pension of two-thirds gross earnings plus some benefits in kind (averaged over the same period as final pensionable pay), for each year of scheme membership up to your retirement date.
State pensions are not included in any of the above calculations.
The Trustee has appointed a selection of investment managers to invest the funds which, ultimately, will provide the pension and other benefits described in this booklet. These funds are held by the Trustee and do not form part of the assets of the Company. They are audited annually by the Scheme Auditor and their value relative to the liabilities of the Scheme is looked at every three years by the Scheme Actuary.
The Trustee allocates their financial assets to each investment manager. How this is done is recorded in a document called the Statement of Investment Principles. If you would like a copy of this document you can ask for one from the Administrator.
The Pensions Advisory Service (TPAS) is available at any time to assist you and beneficiaries of the Scheme in connection with any:
pension queries you may have; or
difficulty which you have failed to resolve with the Trustee or Invensys Pensions.
The Pensions Ombudsman may investigate and resolve complaints or disputes of fact or law concerning occupational pension schemes made or referred to him. TPAS and The Pensions Ombudsman may both be contacted at:
11 Belgrave Road, London, SW1V 1RB
Tel: 0845 6012 923 (TPAS) | Tel: 020 7834 9144 (Ombudsman)
The Pensions Regulator
The Pensions Regulator is the statutory regulator of work-based pension schemes in the UK. The Regulator’s main objectives are:
to protect the benefits of members of work-based pension schemes;
to promote and improve understanding of the good administration of work-based pension schemes; and
to reduce the risk of situations arising which may lead to claims for compensation from the Pension Protection Fund.
The Pensions Regulator aims to support schemes and help trustees to get things right. It provides education and information to those running schemes to help reduce the likelihood of problems occurring. However, if things go wrong it will use its powers to ensure that matters are put right.
Further information on The Pensions Regulator is available at www.thepensionsregulator.gov.uk
Administration of the Scheme is carried out for the Trustee by XPS Administraion, located at:
36 Gallowgate, Newcastle upon Tyne, NE1 4TD
Tel: 0191 341 0600 (general enquiries)
Fax: 0191 247 5826 (general enquiries)
Changes to the Scheme
This document is intended to be a guide to the provisions of the Scheme as at 22 August 2016. The Scheme is subject to amendment from time to time and to the extent that any changes affect your benefits, you will be notified in accordance with statutory requirements.
Throughout this booklet there are certain terms which have special meanings and an explanation is given below.
Company is Invensys Ltd (formerly known as Invensys plc).
Invensys Pensions is administered by XPS Administration, whose details can be found on page 8.
Normal retirement age is age 65 for men and women.
Scheme is the Invensys Pension Scheme, formerly known as the BTR Group Pension Scheme, administered in accordance with a Fourth Definitive Trust Deed and Rules dated 22 August 2016.
Scheme Actuary is SM Leake of XPS.
Scheme Auditor is Ernst &Young LLP.
Trustee is Invensys Pension Trustee Limited (formerly BTR Group Pension Trustee Limited).