Introduction

Members can take their full pension benefits at their Normal Pension Age (NPA). For most, this will be age 60 or 65 but it’s not the same for everyone.

More about NPA

The NPA is the age at which members are due to draw their full benefits from the Fund. Former Gartmore Members have a 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 a NPA of between age 60 and 65. So it’s very important to check the quote the member has received which will confirm NPA for them.

Most members can also take their benefits earlier or later than their NPA, but there are some instances where they may not be allowed to; for example, if retiring early means a member’s pension falls below their Guaranteed Minimum Pension.

Members are usually also able to swap up to 25% of their benefits for tax-free cash.

On top of the pension increases provided by legislation and the Fund Rules, the Trustee may exercise its discretion to award a discretionary increase after consideration of various factors. However, they have not made any of these discretionary increases in recent years.

Resources available to members

There are a number of resources available to members to help them make retirement decisions. Some of them can only be accessed by the member when they log in to their pension record.

Please encourage your clients to use these and think carefully before they make any retirement decisions.

Getting the right quote

Members are able to get an illustration of what they have built up in the Fund so far, and what they may get when they come to take their pension, by running a quote on their Pension Record. Quotes are calculated based on which schedule of the Fund they are a member of, as well as their personal details, such as their NPA.

There are many different types available, and these change depending on the age of the member.

Retiring early

Members can retire from age 55 with Trustee or bank consent (which is nearly always given). They may also be able to retire earlier than this if they are ill – but these requests would need to be referred to our occupational health advisers before they can be considered.

No member of the Group Fund has a protected retirement age below 55.

If a member retires earlier than their Normal Pension Age (NPA), we’ll reduce their pension to take account of the fact that they’ll be receiving it for longer. We reduce it by using an Early Retirement Factor (ERF).

If the member joined the Retiring Age 65 Schedule, they’ll have different NPAs for different parts of their pension, so we’d carry out a split calculation.

Early retirement factors (ERFs)

This information is for members of the RBS, NatWest, Group, Coutts and NatWest Markets schedules. For other schedules, check the relevant Schedule Factsheet or contact us. Actuarial factors shown on this site are current, but like most DB schemes they are reviewed from time to time, so might change in the future.

  • The NatWest, Group, Coutts and NatWest Markets schedules

    • Excess pension over GMP is worked out as 0.962 x (number of years and months early). To calculate the ERF we use a compound method, for example, a member retiring 4 years 6 months early would have an ERF of 0.840 calculated as 0.962^4.5.

    • GMP pension is worked out as 0.968 x (number of years and months early). This rate applies to active members currently retiring or deferred members who left after 05/04/2017. For deferred members who left before this date, different ERF rates apply:

      Deferred Member GMP Factor
      Date of Leaving GMP Factor (ERF)
      Date of LeavingBefore 05/04/1988 GMP Factor (ERF)1.015
      Date of LeavingBetween 06/04/1988 and 05/04/1993 GMP Factor (ERF)1.006
      Date of LeavingBetween 06/04/1993 and 05/04/1997 GMP Factor (ERF)1.001
      Date of LeavingBetween 06/04/1997 and 05/04/2002 GMP Factor (ERF)0.994
      Date of LeavingBetween 06/04/2002 and 05/04/2007 GMP Factor (ERF)0.978
      Date of LeavingBetween 06/04/2007 and 05/04/2012 GMP Factor (ERF)0.973
      Date of LeavingBetween 06/04/2012 and 05/04/2017 GMP Factor (ERF)0.980
      Date of LeavingAfter 06/04/2017 GMP Factor (ERF)0.968

      The ERF is worked out using a compound method.

  • The RBS schedule

    • Excess pension over GMP is worked out as 0.962 x (number of years and months early). To calculate the ERF we use a compound method, for example, a member retiring 4 years 6 months early would have an ERF of 0.840 calculated as 0.962^4.5.

      For leavers pre 01/01/1991, the ERF pension will have a non-revaluing element and the ERF applied to non-revaluing element of the excess pension is 0.936 ^ term from the early retirement date to the member’s Normal Pension Age (NPA). This is applied using a compound method.

    • GMP pension for women is worked out as 0.968 x (number of years and months early). This rate applies to active members currently retiring or deferred members who left after 05/04/2017. For deferred members who left before this date, different ERF rates apply:

      Deferred Member GMP Factor
      Date of Leaving GMP Factor (ERF)
      Date of LeavingBefore 05/04/1988 GMP Factor (ERF)1.015
      Date of LeavingBetween 06/04/1988 and 05/04/1993 GMP Factor (ERF)1.006
      Date of LeavingBetween 06/04/1993 and 05/04/1997 GMP Factor (ERF)1.001
      Date of LeavingBetween 06/04/1997 and 05/04/2002 GMP Factor (ERF)0.994
      Date of LeavingBetween 06/04/2002 and 05/04/2007 GMP Factor (ERF)0.978
      Date of LeavingBetween 06/04/2007 and 05/04/2012 GMP Factor (ERF)0.973
      Date of LeavingBetween 06/04/2012 and 05/04/2017 GMP Factor (ERF)0.980
      Date of LeavingAfter 06/04/2017 GMP Factor (ERF)0.968

      The ERF is worked out using a compound method.

    • GMP pension for men is worked out as 0.936 x (number of years and months early). This rate applies for active and deferred members irrespective of when they left service. The ERF is calculated using a compound method.

Retiring late

Deferred members will get a higher pension if they retire after their Normal Pension Age (NPA). We’ll apply an uplift factor for each year and complete month that the member takes their pension after their NPA.

For active members, how we’d increase any pension if the member retires after their NPA depends on if they’d joined the NPA 65 Schedule.

More about NPA 65

If they have joined:

  • (before their original NPA), we’d increase their pension by applying an uplift factor for each year and complete month that the member takes their pension after their original NPA – that is their NPA before they joined the Retiring Age 65 Schedule. For these members we’ll need to carry out a split calculation because they’ll have a different NPA for each of the different parts of their pension
  • (after their original NPA), we’d increase their pension by applying an uplift factor for each year and complete month that the member takes their pension from the date they joined the Retiring Age 65 Schedule (instead of their original NPA).

If they haven’t joined:

  • we won’t apply an uplift factor. Instead, the member will continue to build up pensionable service until their chosen retirement date to a maximum of 40 years’ service.

For all members we apply an uplift factor to the total pension, including any GMP.

Late retirement uplift factors

This information is for members of the RBS, NatWest, Group, Coutts and NatWest Markets schedules. For other schedules, check the relevant Schedule Factsheet or contact us. Actuarial factors shown on this site are current, but like most DB schemes they are reviewed from time to time, so might change in the future.

  • The NatWest, Group, Coutts and NatWest Markets schedules

    Main Fund Section Late Retirement Factors
    Years retiring late Late Retirement Factor
    Years retiring late0 Late Retirement Factor1.000
    Years retiring late1 Late Retirement Factor1.027
    Years retiring late2 Late Retirement Factor1.055
    Years retiring late3 Late Retirement Factor1.084
    Years retiring late4 Late Retirement Factor1.116
    Years retiring late5 Late Retirement Factor1.150
    Years retiring late6 Late Retirement Factor1.187
    Years retiring late7 Late Retirement Factor1.227
    Years retiring late8 Late Retirement Factor1.269
    Years retiring late9 Late Retirement Factor1.314
    Years retiring late10 Late Retirement Factor1.362
    Years retiring late11 Late Retirement Factor1.413
    Years retiring late12 Late Retirement Factor1.467
    Years retiring late13 Late Retirement Factor1.525
    Years retiring late14 Late Retirement Factor1.587
    Years retiring late15 Late Retirement Factor1.653
    Years retiring late16 Late Retirement Factor1.724
    Years retiring late17 Late Retirement Factor1.799
    Years retiring late18 Late Retirement Factor1.880
    Years retiring late19 Late Retirement Factor1.966
    Years retiring late20 Late Retirement Factor2.059

    Notes

    1. These factors are effective for members retiring on and from 1 February 2018.
    2. 'Years retiring late' is the number of years between the actual age of retirement and the age specified in the Rules by reference to which late retirement uplifts should be calculated.
    3. Factors are applied to the accrued pension revalued for the period up to the actual age of retirement. For pensions not subject to revaluation in deferment, a further uplift should be applied. This uplift is equal to the revaluation which would have applied during the period between actual age of retirement and the age specified in the Rules by reference to which late retirement uplift should be calculated, had the member been entitled to RPI capped at 3% p.a. revaluations in deferment.
    4. Factors for intermediate years should be calculated by interpolation of the factors above.
  • The AA section

    AA Section Late Retirement Factors
    Years retiring late Late Retirement Factor
    Years retiring late0 Late Retirement Factor1.000
    Years retiring late1 Late Retirement Factor1.035
    Years retiring late2 Late Retirement Factor1.073
    Years retiring late3 Late Retirement Factor1.111
    Years retiring late4 Late Retirement Factor1.153
    Years retiring late5 Late Retirement Factor1.198
    Years retiring late6 Late Retirement Factor1.246
    Years retiring late7 Late Retirement Factor1.297
    Years retiring late8 Late Retirement Factor1.352
    Years retiring late9 Late Retirement Factor1.411
    Years retiring late10 Late Retirement Factor1.473
    Years retiring late11 Late Retirement Factor1.539
    Years retiring late12 Late Retirement Factor1.609
    Years retiring late13 Late Retirement Factor1.684
    Years retiring late14 Late Retirement Factor1.765
    Years retiring late15 Late Retirement Factor1.851
    Years retiring late16 Late Retirement Factor1.942
    Years retiring late17 Late Retirement Factor2.041
    Years retiring late18 Late Retirement Factor2.146
    Years retiring late19 Late Retirement Factor2.259
    Years retiring late20 Late Retirement Factor2.380

    Notes

    1. These factors are effective for members retiring on and from 1 February 2018.
    2. 'Years retiring late' is the number of years between the actual age of retirement and the age specified in the Rules by reference to which late retirement uplifts should be calculated.
    3. Factors are applied to the accrued pension revalued for the period up to the actual age of retirement. For pensions not subject to revaluation in deferment, a further uplift should be applied. This uplift is equal to the revaluation which would have applied during the period between actual age of retirement and the age specified in the Rules by reference to which late retirement uplift should be calculated, had the member been entitled to CPI capped at 5% p.a. revaluations in deferment.
    4. Factors for intermediate years should be calculated by interpolation of the factors above.

    Note: If an active member in the RBS schedule did not join the Retiring Age 65 Schedule, they will get the better of additional service or pension calculated at NPA increased in line with these factors. As above, any Late Retirement Factors are applied to the total pension, including any GMP. This does not apply to those members who belong to the AA section.

Taking tax-free cash

On retiring, members can usually swap up to 25% of the value of their expected pension for tax-free cash. We work out how much cash they can get for each pound of pension income by applying a commutation factor.

Current commutation factors

These apply to all schedules of the Fund, except for the former AA (ABN Amro) schedules. Contact us if you need these details. Actuarial factors shown on this site are current, but like most DB schemes they are reviewed from time to time, so might change in the future.

Age Commutation Factor
Age55 Commutation Factor23.37
Age56 Commutation Factor22.86
Age57 Commutation Factor22.35
Age58 Commutation Factor21.83
Age59 Commutation Factor21.30
Age60 Commutation Factor20.76
Age61 Commutation Factor20.22
Age62 Commutation Factor19.68
Age63 Commutation Factor19.12
Age64 Commutation Factor18.56
Age65 Commutation Factor18.00
Age66 Commutation Factor17.43
Age67 Commutation Factor16.86
Age Commutation Factor
Age68 Commutation Factor16.30
Age69 Commutation Factor15.73
Age70 Commutation Factor15.16
Age71 Commutation Factor14.59
Age72 Commutation Factor14.02
Age73 Commutation Factor13.44
Age74 Commutation Factor12.87
Age75 Commutation Factor12.29
Age76 Commutation Factor11.73
Age77 Commutation Factor11.17
Age78 Commutation Factor10.62
Age79 Commutation Factor10.09
Age80 Commutation Factor9.58

Taking APeCs/AVCs

Members who still work at the bank can boost their retirement savings by paying Additional Pension Contributions (APeCs) into the Fund.

Here are some facts about APeCs:

  • APeCs are Defined Contribution (DC) benefits
  • members can choose how to invest their APeCs from a range of investment options
  • APeCs are deducted from a member’s salary before tax, meaning they get tax relief at their highest rate and can save on National Insurance contributions automatically each month through payroll. Members can set this up at any time through RBSelect
  • members need to be aware of Annual Allowance and Lifetime Allowance limits when contributing APeCs.

When a member takes their APeCs, they can:

  • use them to fund a tax-free cash lump sum, therefore increasing the amount of Defined Benefit pension they take from the Fund
  • buy an annuity on the open market
  • drawdown income over the long term by transferring their APeCs out of the Fund into another approved DC arrangement
  • if a member’s APeCs exceed 25% of the value of their benefits that can be taken tax-free cash, they can take the balance of their APeCs as taxable cash.

The value of a members’ APeCs will depend on several factors including the amount of APeCs paid over time, the age at which they take their benefits, the performance of APeC investments and any charges payable when they make their choice on how to take their APeCs (like transfers, or on purchasing an annuity).

If a member dies before drawing their pension, the value of their APeCs will be paid to their beneficiaries as a tax-free lump sum.