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Choosing when to retire

We assume that you will retire at your state pension age, so this is what we use when deciding your normal pension age in the Fund. The only time this isn’t the case is if your contract of employment says otherwise. You can choose to take your benefits earlier or later than this if you wish.

If you joined the Fund (or another pension scheme that merged into the Fund before 6 April 2006, you can take your benefits from age 50 if you leave Nestlé’s employment and then choose to retire. If you decide to take early retirement after leaving the Fund, the calculation of your early retirement pension may not be as good as if you retire from active service.

Retiring early

Under the current law, you can take your pension at any time from age 55 (or 50 if you have a protected pension age of 50) with Nestlé’s consent.

If you decide to buy an annuity with your DC account, the pension you’ll receive will depend on the value of your account when you retire, the type of annuity you choose and the cost of buying a pension at that time.

If you take your benefits from your DC account early, your account will have less time to grow from contributions and investment returns. Also, if you choose to provide a pension from your account by buying an annuity, the earlier you retire, the lower your pension is likely to be because it’s likely to be paid for longer.

If you choose to retire before you reach normal pension age, your DB Core and/or DB CorePlus pension will be calculated in the same way, based on your actual pensionable service in DB Core and/or DB CorePlus. However, it will be reduced for each year that you retire before normal pension age because it is likely to be paid for longer.

Pre-August 2017 benefits

If you built up pension in Lane 2 and/or Lane 3 of the Fund before August 2017, this pension will be reduced by 4% for each year (and a proportionate amount for each part year) that you retire before age 65 or the retirement age in your contract, if different.

Pre-August 2010 benefits

If you decide to retire before age 65, the reduction that will be applied to the pension you built up before 1 August 2010 will depend on when you joined the Fund and the terms that applied at the time. If you built up pension before August 2010 in another scheme provided by an employer that merged with Nestlé, different early retirement terms may apply to that pension and you should contact Nestlé Pensions to find out about them.

If you joined the Fund on or after 1 October 2003 and retire from active service, the part of your pension that you built up to 31 July 2010 will be reduced by 4% for each year (and a proportion of 4% for each complete month) that you retire before Normal Pension Date (NPD).

If you joined the Fund before 1 October 2003 and retire from active service, depending on when you joined the Fund, and in some cases, subject to Trustee and Nestlé’s discretion, some or all of the pension that you built up to 31 July will be reduced by 4% for each year that you retire before age 60, with the remainder being reduced by 4% for each year (and a proportion of 4% for each complete month) that you retire before NPD, unless your contract of employment states otherwise.

For example:

  • If you joined the Fund before 6 April 1992, the part of your pension that you built up to 31 July 2010 will be reduced by 4% for each year (and a proportion of 4% for each complete month) that you retire from active service before age 60 (for men, the reduction is subject to Trustee and Nestlé discretion for pension built up before 17 May 1990).
  • If you joined the Fund on or after 6 April 1992 and you are not a former Dalgety Fund member, the part of your pension that you built up prior to 1 October 2003 will be reduced by 4% for each year (and a proportion of 4% for each complete month) that you retire from active service before age 60 and the part of your pension built up between 1 October 2003 and 1 August 2010 will be reduced by 4% for each year (and a proportion of 4% for each complete month) that you retire from active service before age 65.
  • If you joined the Fund on or after 6 April 1992 and you are a former Dalgety Fund member, the part of your pension that you built up to 31 July 2010 will be reduced by 4% for each year and a proportion of 4% for each complete month that you retire from active service before age 60.

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 would be reduced.

Retiring late

If you work past your normal pension age (your state pension age, unless your employment contract says otherwise) you can either choose to opt out of the Fund or carry on contributing either until you retire or you reach age 75. The benefits you receive will depend on whether you opt out of the Fund or carry on contributing.

DC Core and DC Start

If you opt out of the Fund at your normal pension age:

  • you stop making contributions;
  • your DC account will stay invested;
  • you should make sure that your investment options and target retirement age still fit with your current plans;
  • your death-in-service benefits will reduce to a cash lump sum of 2 x pensionable earnings;
  • when you stop working for Nestlé, you can take your benefits - see What will you receive

If you carry on contributing to the Fund after you reach your normal pension age:

  • your DC account will stay invested.
  • you carry on making contributions as normal, until no later than when you reach age 75;
  • you should make sure that your investment options and target retirement age still fit with your current plans;
  • your death-in-service benefits will carry on as normal; and
  • when you stop working for Nestlé, you can take your benefits - see What will you receive

DB Core and DB CorePlus

If you opt out of the Fund at your normal pension age:

  • you stop making contributions and building up pension;
  • when you stop working for Nestlé, your DB Core and/or DB CorePlus pension will start. It will be calculated based on your career average revalued pensionable earnings (this is based on your earnings and length of service – find out more in the ‘How your pension builds up’ section) and your pensionable service when you reach your normal pension age (or at the date you opt out if later). This pension (and any defined benefit pension you built up before 1 August 2010) will then be increased by a late retirement factor to reflect the later start date. This ‘late retirement factor’ is used because the longer you have worked, the more you’ve paid into the Fund, and the more pension you get out as a result.
  • If you die, your dependants will receive the same benefits as if you had stopped working (see Death after leaving).

If you carry on contributing to the Fund after you reach your normal pension age:

  • you carry on making contributions and building up pension as normal, until no later than when you reach age 75;
  • when you stop working for Nestlé, your DB Core and/or DB CorePlus pension will be calculated based on your career average revalued pensionable earnings and your pensionable service at the date you stop working for Nestlé and no late retirement factor will be applied.
  • your death-in-service benefits will carry on as normal.

Flexible retirement

If Nestlé agrees, you can take all or part of your Nestlé pension at any time from age 55 (under the current law) and carry on working for Nestlé. This is known as flexible retirement.

If you choose this option, you can carry on building up benefits in DC Core while you’re still working for Nestlé, but you must retire and take Nestlé benefits within two years of taking flexible retirement.

Flexible retirement is an HR policy offered at Nestlé’s discretion and is not governed by the Fund’s Trust Deed and Rules. If you’re considering taking flexible retirement, you should look at the HR policy document before making any decisions.

Your options for taking flexible retirement are outlined below.

If you have benefits built up before 1 August 2010

You can take your pension built up before 1 August 2010 at your flexible retirement date and then take your pension built up from 1 August 2010 at your final retirement date.

If you have benefits built up before 1 August 2017

You can take all your benefits built up before 1 August 2017 at your flexible retirement date and then take your benefits built up from 1 August 2017 at your final retirement date.

For everyone

You can take all your pension built up until your flexible retirement date and then take your retirement income built up in DC Core after your flexible retirement date at your final retirement date.