Taking your benefits
As a member of the Fund, you’re building up benefits to provide for your retirement. This could be a pension paid from your normal pension age (NPA) or other options like taking a cash sum or retiring earlier or later than your NPA.
Deciding how and when to take your benefits is an important decision and, in this section, we’ll explain the options available to you.
We assume you’ll retire at your Normal Pension Age (NPA) but, if you want to, you can retire with Nestlé’s consent at any age from 55 (rising to 57 in 2028) to 75. Read more about choosing when to retire.
Your options
As a DC Start, DC Core or a DB member with DC savings, you can choose to use your DC savings in one or a combination of the following ways:
Cash
You can take all or part of your account as cash. 25% of the total value of all your pension benefits (up to the lump sum allowance) can be taken tax free. If you take more than 25%, you’ll have to pay tax on the balance, and you may pay a higher rate of tax if you take your whole account at once.
Income drawdown
You can transfer your account to an external arrangement, which allows you to withdraw variable amounts of income (subject to tax) while your account remains invested.
The income you will receive is not guaranteed for life and will vary depending on the investment performance of your remaining account. Income drawdown products can be complex. We recommend that you get financial advice before committing to one.
Guaranteed income for life
You can use your account to provide a pension by buying an annuity from an external provider. The amount of pension you receive will depend on the type of annuity you choose and the price of annuities at that time.
For example, you could choose one that provides a pension for your partner after your death, an enhanced annuity that takes into account your health and lifestyle (possibly giving you a better rate), or an annuity that rises with inflation. You would pay tax on your pension payments.
The maximum amount you can take as a tax-free cash from your pension(s) (including pensions from different pension schemes) when you retire cannot exceed the ‘lump sum allowance’. For more information see Pensions and tax.
Membership of previous pensions
Pre-August 2017 benefits
If you built up benefits in the lanes before 1 August 2017, you will also receive any pension you built up in Lanes 2 or 3 of the Fund. If you built up a Lane 1 account, this transferred into DC Core and you will have the options described above.
Once you’re receiving your pension built up before August 2017, it receives increases each year to help it keep pace with inflation. The Fund increases your pension built up before 6 April 2006 in line with the rise in the retail prices index (also known as RPI) up to a maximum of 5% a year, and your pension built up from 6 April 2006 in line with the rise in consumer prices index (also known as CPI) up to a maximum of 2.5% a year.
Pre-August 2010 benefits
If you were a member of the Fund before August 2010, you will also receive the pension you built up to 31 July 2010, increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% a year to the date you retire. Nestlé may increase your benefits above 5% but is not required to.
If you were a member of the final salary section of the Purina UK Pension Plan before August 2010, you will receive your pension built up to 31 July 2010 in that plan, increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% a year to the date you retire. Nestlé may increase your benefits above 5% but is not required to.
Your Purina pension deduction was also calculated at 31 July 2010 and, as long as you remain in Nestlé's employment, is increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% each year until your state pension age. For more information about the deduction see the Pension Deduction leaflet.
If you were a member of the Purina Pension Savings Plan before August 2010, the value of your account in the Pension Savings Plan transferred into Lane 1 of the Fund at 1 August 2010 and then transferred into DC Core at 1 August 2017. You can choose how to provide benefits from your DC Core account from the options described above.
If you were a member of the Nestlé Waters UK Ltd Retirement Benefit Scheme before August 2010, the value of your account in that scheme transferred into Lane 1 of the Fund at 1 August 2010 and then transferred into DC Core at 1 August 2017. You can choose how to provide benefits from your DC Core account from the options described above.
If you built up benefits in any other arrangement that merged into the Fund before August 2010, you should refer to the details you received about how your benefits increase to keep pace with inflation.
If you transferred from the Rowntree Pension Fund to the Nestlé Rowntree Pension Fund in April 1992, you will have a Value for Money Guarantee. For more information see the Value for Money Guarantee Leaflet.
Retiring overseas
If you’re planning on spending your retirement overseas, we will still be able to pay your pension, provided you’re living in a country with an established banking system. It is possible to make international payments by bank transfer. However, you should bear in mind that the payment would be made in sterling and the receiving bank might make a charge for converting it into the local currency, which will be deducted from your pension and we will need to see your passport to carry out anti-money laundering checks. Please note we can still make payments to a UK bank account even though you’re living overseas.