The proportion of your earnings you’ll get as a pension for each year in the Fund – commonly but not always 1/60th. Please see your Schedule Factsheet for further information.
This is how much you and your employer(s) can save tax efficiently for your retirement in any one tax year. The current limit is £40,000 but reduces to a minimum of £4,000 for high earners. This is also £4,000 if you’re already drawing a pension and started accessing other retirement savings flexibly, so it’s very important to take advice before doing so if you want to keep on saving.
Another word for pension, this is an amount of money regularly paid during your retirement from a Defined Contribution pension arrangement.
Otherwise known as Additional Pension Contributions, APeCs are a great way of topping up your retirement savings. APeCs are pension contributions you elect to pay to the Fund via RBSelect above any minimum mandatory contributions required. APeCs build up on a Defined Contribution basis in the Fund. You can use the APeCs you’ve saved to get tax-free cash or to buy extra monthly pension.
The APeC Investment Fund Factsheets provide further information on the investment options for APeCs. You can access these in the Useful Documents section of the Fund website.
The principal employer of the Fund is National Westminster Bank plc; references to ‘bank’ may include other employers participating in the Fund from time to time.
Cash lump sum
This is the term used to describe the amount of money you can choose to take immediately when you retire, in one single sum. Some or all of this may be tax free.
A person who is in a civil partnership with a member or pensioner under the Civil Partnership Act 2004.
Death in service
If you die in pensionable service with the bank.
This is a pension that is based on your pensionable salary and how long you have worked for your employer. It is sometimes known as a final salary pension.
This is a pension that is based on how much is paid in and how well the investment funds have performed. It is also known as a money purchase pension.
A dependant is usually somebody who is financially reliant on you, and a person(s) you can choose to receive your benefits when you die. Dependant(s) can be:
- Your legal spouse or civil partner
- A child (up to age 18, or 23 if in full-time education or training)
- Someone who, in the opinion of the Trustee, was, at the time of your death, financially dependant on you, or in a mutually dependant financial relationship with you, and whose standard of living would be affected by the loss of your contribution or support.
Family leave is where you are absent from work due to maternity, paternity, shared parental, or adoption leave. You may or may not be receiving pay from the bank, and/or receiving statutory pay, during periods of family leave.
Final Pensionable Salary
Please see your Schedule Factsheet for the definition of Final Pensionable Salary applicable to you. For example, for members of the RBS Group Section, Final Pensionable Salary means the 12 best consecutive months of pensionable salary that you have had in your last five years of membership in the Fund.
If you were a permanent or fixed-term contract employee of the Bank on or before 30 September 2006 and your employment contract stated that you were eligible for membership, you will have automatically joined the Fund when you become eligible – unless you chose not to participate. Since 1 October 2006, the Fund has been closed to new members but you may have benefits in other retirement arrangements from the bank.
If you were a member of a scheme that merged into the Fund after 1 October 2006, you may have joined at a later date (for example, members of the RBS AA Section who joined the Fund on 31 March 2012).
Gartmore Members’ benefits are set out in the Fund Schedule relevant to former members of the Gartmore Pension Fund. These members have an NPA of 62 under their Schedule.
Guaranteed Minimum Pension (GMP)
The GMP is the minimum amount the Fund is legally bound to provide members who were contracted out of the State Earnings-Related Pension Scheme (SERPS) between 6 April 1978 and 5 April 1997.
Please see your Schedule Factsheet for the definition of Incapacity applicable to you. For example, for members of the RBS Group Section, Incapacity means a physical or mental incapacity that prevents you from following any occupation with any employer. The Trustee will make the final decision as to whether or not your condition meets the requirements for Incapacity.
This increases the value of your benefits earned by reference to a Normal Pension Age of 60, to reflect that benefits you earned by reference to NPA 60 will not be paid until after your 60th birthday. The size of the factor is determined by the Trustee based on actuarial advice. It is subject to review from time to time. Some factors require bank agreement.
The Government limits how much you can save tax efficiently for your retirement in your lifetime via the Lifetime Allowance. The current limit is £1,073,000 for the 2020/21 tax year. This will increase annually by the Consumer Price Index (CPI). You may be able to apply to protect your Lifetime Allowance at a higher level with Lifetime Allowance Protection.
Lower earnings limit
The minimum amount you must earn before you are required to make National Insurance contributions (£6,240 a year for 2020/21). This is set by the Government each year and may change.
New State Pension
Since 6 April 2016, a single-tier State Pension has replaced the previous two-tier system that consisted of the Basic and State Second Pension. The new State Pension is based on your National Insurance (NI) record alone and you’ll need 35 years of recorded NI contributions to get the full amount. This is £175.20 a week for the 2020/21 tax year (an increase of £6.60 a week from the 2019/20 tax year).
Normal Pension Age (NPA)
The age at which you may draw your benefits from the Fund as of right. For most members, NPA is age 60 or 65. If you are an active member, you can change your NPA from age 60 to age 65 at any time. Your change will be made effective from the month after election. You cannot however change it from age 65 to age 60.
Former Gartmore Members have an NPA of 62, rather than NPA 60, under their schedule of the Trust Deed and Rules. Former NatWest Bank Pension Fund members employed in 1985 may have an NPA of between age 60 and 65.
You have two options. Transferring your Defined Contribution benefits (APeCs) to a separate, Defined Contribution scheme, whilst keeping your other benefits within the Fund. You can also choose to transfer a portion of your main Fund benefits, subject to a few minimum requirements.
This is the pensionable salary that you are informed of annually. Increases in pensionable salary take place each 1 April and since 25 August 2009 have been subject to review each 1 April and subject to an annual limit which is the lowest of:
- The actual percentage increase in your salary, or
- The annual rate of increase in UK Consumer Price Index (CPI) over the 12 months ending on the previous 30 September, or
The bank reviews this arrangement annually and details of your pensionable salary are confirmed each year as part of the annual pay process.
If you were employed by any of the subsidiaries of the bank and have remained continuously in such employment your pensionable salary may be subject to a ‘loading’.
The loading will be included within the pensionable salary amount that is quoted to you in your pay letter.
The loading will be taken into account when any calculations of your pension entitlement are undertaken, however, your pension records that are held with the Pension Fund administrator will reflect your pensionable salary prior to the loading being applied, so may differ from the pensionable salary that is displayed in your pay letter.
Please see your relevant Schedule Factsheet for the definition of pensionable service applicable to your benefits from the Fund.
Your pensionable service in the Fund, plus any years of service relating to pension benefits you have transferred in from another pension arrangement.
The bank’s employee benefits plan where employees select their flexible benefits and access important benefit information, including pensions.
The bank has grown over time. As the bank has grown, so has the Fund as several pension schemes from various companies that now make up the bank were merged into the Fund. Each pension scheme provided slightly different benefits, on different terms, for its members – and those different benefits and terms continue to apply under the various benefit schedules to the Fund Trust Deed and Rules.
For a summary of the benefits you will receive under your relevant benefits schedule, please see the Useful Documents section of the Fund website.
Your legal husband or wife. If you divorce this individual, a court may make an order on your pension benefits under the Fund as part of your divorce proceedings.
State Pension age
State Pension age is regularly increasing to reflect the fact that we’re all living longer. It’s set to reach age 66 for both men and women by 2020 and will continue to increase thereafter.
State Second Pension (S2P)
Between 6 April 1978 and 5 April 2016 the Fund was contracted out of the State Second Pension (S2P), meaning Fund members as well as the bank made lower National Insurance contributions.
Although you didn’t build up benefits in the S2P during that time, the bank provided a minimum level of pension benefits through the Fund.
This is the conversion of a ‘small’ pension into a one-off cash payment, up to £30,000. 25% will be free of tax, and the remaining 75% will be taxable at your marginal rate of income tax in the year the lump sum is paid (i.e. it will be taxed as normal income).
Trust Deed and Rules
The Fund is set up under trust, and is currently governed by a definitive Trust Deed and Rules dated 5 April 2006 (as amended from time to time). The Trustee must run the Fund in line with its Trust Deed and Rules. These are the legal documents which set out the Trustee’s powers and responsibilities, the role of the bank, and members’ rights and conditions. Whilst every effort has been made to ensure the accuracy of the information in this member guide (and also the Schedule Factsheets), in the event of any discrepancy the Trust Deed and Rules will prevail.
NatWest Pension Trustee Limited, the Trustee company, is made up of directors who are nominated by the bank and Fund members.
Upper earnings limit
The maximum amount of earnings on which you must make National Insurance contributions (£50,000 a year for 2020/21). This is set by the Government each year.