Changes to the Early Retirement Age

From 6 April 2010, the Government’s legislation requires that a minimum retirement age of 55 is introduced. This replaces the previous minimum age of 50.

If you are currently a John Menzies employee and are contributing to the scheme, you may take your pension early with the consent of your employer. If you wish to take your pension early and continue to work, (subject to the consent of your employer) you must reduce your working hours to 25 hours per week or less.

All early retirement pensions are reduced to take account of early payment. The amount of the reduction will depend on your age at the time you take your pension. If you are interested in taking early retirement, please contact the pensions department for a quotation.

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National Employment Savings Trust (NEST) – You may be automatically enrolled

A Bill entered Parliament on 5th December 2007 to take forward proposed measures primarily aimed at reforming the occupational pensions system.

These reforms are designed to encourage greater participation in occupational pension schemes. From 2012/13 it is planned that all eligible employees who do not have or who have not joined their company pension scheme will be automatically enrolled into either their employers’ existing scheme or a new savings vehicle called NEST. To encourage participation, employees’ pension contributions will be supplemented by contributions from employers and tax relief.

Automatic enrolment
Automatic enrolment means instead of choosing whether to join a workplace pension scheme provided by their employer, all eligible workers will have to actively decide not to be in a scheme, if for any reason they feel saving in a scheme isn’t right for them.

NEST
The NEST scheme will be a new, simple, low-cost pension saving scheme aimed at median to low income workers.

Minimum employer contribution
There will be a duty on employers to provide a workplace pension scheme or NEST for their employees, and also to contribute a minimum of 3% after a phasing in period, (on a band of earnings) to employee’s pensions. The total contribution after the phasing in period, (including employee tax relief) must be at least 8% of band earnings.

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Change to the way your deferred pension will increase (MPF only)

If you leave the Menzies Pension Fund before you retire, you are entitled to a deferred pension which must increase each year from your date of leaving to your date of retirement. Following a change in legislation on 6th April 2009 there is a change to the way this pension will increase.

The change only affects members who leave the Fund after 5 April 2009 and before retirement and only affects pensions built up from 6 April 2009.

The way your deferred pension increases before and after the change is shown below:

Increases to deferred pensions
Before 6 April 2009

Increases to deferred pensions
From 6 April 2009

After leaving, your deferred pension is increased in line with inflation (RPI) up to a maximum of 5% per annum compound for each complete year between your date of leaving and your Normal Retirement Date

After Leaving:

Your deferred pension that relates to pension built up before 6 April 2009 is increased each year as described opposite, and

Your deferred pension that relates to pension built up from 6 April 2009 is increased in line with inflation (RPI) up to a maximum of 2.5% per annum compound for each complete year between your date of leaving and your Normal Retirement Date

This change does not affect members of the Menzies Money Purchase Pension Scheme. If you have any questions regarding the change, please contact the pensions department.

Scheme change with effect from 1 June 2010 (Active MPF members only)

The change affects members who were contributing to the Scheme at 1 June 2010. It does not affect retired or deferred members who left before 1 June 2010 and does not affect any money purchase members. The change affects the way accrued pensions are revalued (increased) each year. Click here to view the details of the change.

click here to view the original Q&A document issued to members with their letters.

click here to view the Q&A document listing a questions from members