Choosing when to retire
We assume that you'll retire at your state pension age, so this is the age we use to decide what your normal pension age in the Fund will be too. The only time this won't be the case is if you have a different retirement age in your contract of employment. You can take your benefits earlier or later than the Fund's normal pension age if you like, though.
Retiring early
The Fund's Trust Deed and Rules set out the age when members can start taking their benefits, but overriding pensions tax legislation sets out the earliest age when members can generally take their benefits without incurring any penal tax charges. This is known as the normal minimum pension age and it is currently set at age 55.
However, the government is raising the normal minimum pension age to 57 in April 2028. From this date, you won't be able to take your pension benefits before age 57 unless you're retiring because of ill health, or because you have something called a protected pension age.
Protected pension age of 50
If you joined the Fund — or another pension scheme that merged into the Fund apart from Purina — before 6 April 2006, you'll have a protected pension age of 50. This means the normal minimum pension age doesn't apply to the benefits you've built up in the Fund and you can take them from age 50. To do this, you'd have to leave Nestlé's employment and the Fund, and then retire at the same time.
Protected pension age of 55
If you joined the Fund on or after 6 April 2006 but before 4 November 2021, you may have a protected pension age of 55. This means the normal minimum pension age doesn't apply to the benefits you've built up in the Fund. Having a protected pension age of 55 will depend on a number of factors, including what type of membership you have and whether you're an active or deferred member at the time you take early retirement.
No protected pension age
If you joined the Fund on or after 4 November 2021, you won't have a protected pension age. So, from April 2028, the earliest you'll be able to take your Fund benefits will be age 57, unless you're retiring because of ill health. Until April 2028, though, you'll still be able to take your Fund benefits at age 55.
At the moment, we're waiting for more details to emerge around the change to normal minimum pension age before the increase to age 57 is implemented in April 2028. Because of this, it may not yet be possible to confirm what the impact might be on members who could have a protected pension age of 55. We'll let you know more as soon as more information becomes available.
What happens to my Nestlé pension if I retire early?
Retiring early from DC Core or DC Start
If you decide to retire early and you use your DC Start or DC Core account to buy an annuity, the pension you 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.
Retiring early from DB Core or DB CorePlus
DB Core and DB CorePlus
If you're still working for Nestlé and you retire before you reach your normal pension age, we'll calculate your DB Core and/or DB CorePlus pension in the same way, based on your pensionable service in DB Core and/or DB CorePlus. However, we'll reduce it by applying an early retirement factor for each year that you retire before your normal pension age because you'll have built up fewer years of pensionable service, plus we assume we'll also be paying your pension for longer.
If you take early retirement after leaving the Fund — so, if you retire as a deferred member — we'll calculate your early retirement pension differently. The options you'll have for taking your benefits will also be different than if you retire from active service.
If you have a DC Start or DC Core account and you decide to use your DC account to buy an annuity — essentially, a pension — the pension you receive will depend on the value of your DC account when you retire, the type of annuity you buy, and the cost of buying one at that time.
If you're a member of DB Core or DB CorePlus, you'll have a DC Core account if you make additional voluntary contributions and/or your earnings take you above the pensionable earnings cap.
Retiring late
Retiring late from DC Core or DC Start
If you decide to retire late and you use your DC Start or DC Core account to buy an annuity, the pension you receive will also 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 opt out of the Fund at your normal pension age:
- you stop making contributions,
- your DC account will stay invested,
- you should regularly check 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 your pensionable earnings, and
- 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 can carry on making contributions, until you reach age 75,
- you should regularly check 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
Retiring late from DB Core or DB CorePlus
If you work past your normal pension age, you can either opt out of the Fund or carry on contributing either until you retire, or until you reach age 75. The benefits you receive will depend on whether you opt out of the Fund or carry on contributing.
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 How your pension builds up) and your pensionable service when you reach your normal pension age (or at the date you opt out if later). We'll then apply a late retirement factor to this pension (and any defined benefit pension you built up before 1 August 2010) to reflect the later start date. This factor will reflect the fact that you've worked longer, paid more into the Fund, and will get a higher
- 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. We won't apply a late retirement factor, and
- 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 current legislation, although this is rising to age 57 in April 2028 — find out more in Retiring early above) and carry on working for Nestlé. This is known as flexible retirement and is available to members of DB Core or DB CorePlus.
Taking flexible retirement from DC Core or DC Start
Flexible retirement is not available to members of DC Core or DC Start.
Taking flexible retirement from DB Core or DB CorePlus
Once you start taking flexible retirement, you'll stop building up benefits in DB Core or DB CorePlus and start saving into DC Core for the rest of the time you work for Nestlé. You must retire fully and take your Nestlé benefits within two years of starting your flexible retirement.
Flexible retirement is an HR policy offered at Nestlé's discretion and isn't governed by the Fund's Trust Deed and Rules. If you're considering taking flexible retirement, you should read the HR policy document on flexible retirement before making any decisions.
Your options for taking flexible retirement are...
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 all members of DB Core or DB CorePlus
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.
To find out more about the age you can retire from, contact Nestle Pensions