If you leave Nestlé or opt out of the Fund but carry on working for Nestlé, your contributions will stop and you won’t build up any further pension benefits in the Fund. If you continue working for Nestlé and you opt out, your life insurance cover will reduce to two times pay.
If you opt out but carry on working for Nestlé, you may be automatically enrolled again in the future. This is because employers must re-enrol eligible employees who have opted out every three years by law.
If you are under 22 or earn less than £10,000 a year (£833 a month) when you opt out, you may be re-enrolled sooner than three years if your circumstances change and this means that you meet the criteria for automatic enrolment. See Opting out for more information.
Benefits on leaving
If you leave Nestlé or opt out of the Fund, your pension options will depend on:
- how long you've been a member of the Fund;
- if you only have benefits in DC Start and/or DC Core;
- the types of benefit (DB and/or DC) you have in the Fund; and
- whether you were contractually or automatically enrolled into the Fund.
Still in your opt-out period (up to one month)
If you have savings in DC Start or DC Core only and you opt out during your opt-out period, you’ll receive a refund of your contributions, minus any tax relief you received on your contributions, at your highest normal rate of tax.
We must receive your Opt-out Form within 30 days (one month if you were automatically enrolled) of the start of your opt-out period to be able to pay you a refund. If we receive your Opt-out Form after that date, you will not be eligible for a refund and will become a deferred member of the Fund. This means that your money stays invested, but you will no longer be paying regular contributions.
See Opting out for a reminder of your opt-out period.
Thirty days to three months
If you have any benefits in DB Core or DB CorePlus and you have been a member of the Fund for less than three months, you will receive a refund of your contributions to DB Core or DB CorePlus, minus any tax relief at 20% on amounts up to £20,000 or 50% on amounts above £20,000. Nestlé’s contributions will remain in the Fund. A cash refund may not be possible if you have transferred benefits in from another pension arrangement.
If you have been a member of the Fund for 30 days or more and have only built up savings in DC Start or DC Core (with no benefits in DB Core), you will automatically become a deferred member of the Fund.
As a deferred member, your savings will remain in the Fund until you take your pension or until you choose to transfer your savings to another pension scheme arrangement. If you leave your savings in the Fund, the value of your DC account (including additional voluntary contributions) will continue to go up and down depending on how your investments perform. You will be able to use the value of your DC account to provide pension benefits when you retire.
Two years or more
If you’ve been a member for two years or more, you will become a deferred member of the Fund. Your benefits will stay in the Fund until you take your pension or until you choose to transfer your benefits to another pension arrangement.
If you’ve built up pension in DB Core or DB CorePlus, it will be calculated in the same way as at normal pension date but based on your career average revalued pensionable earnings and pensionable service when you leave. To help it keep pace with inflation, it will then be increased each year in line with movement in the consumer prices index up to a maximum of 2.5%.
If you built up defined benefit pension in the Fund before 1 August 2017, that pension will also stay in the Fund until you start to take it or transfer it to another arrangement. It will increase to help it keep pace with inflation. However, if you built up pension in Lane 2 or Lane 3, the increases to your pension will be lower than they would be if you carried on working for Nestlé.
If you leave your benefits in the Fund and you have a DC Start or DC Core account (including DC Core additional voluntary contributions), its value will continue to go up and down depending on how your investments perform. You will be able to use the value of your DC account to provide an income when you retire. If you transfer your main Fund benefits to another pension arrangement, the value of your additional voluntary contribution benefits will also be transferred.
If you want advice about your investment choices, you should contact an independent financial adviser. MoneyHelper has a list of advisers who are authorised by the Financial Conduct Authority. You can find this list in the pensions and retirement section of the MoneyHelper website.