Leaving the Fund, or ‘opting out’
While you are still working for the bank you can choose to ‘opt out’ of the Fund. You can opt out at any time and there are some good reasons why you may want to, but you should speak with an independent financial adviser before you do. That’s because if you opt out, you’d be giving up valuable benefits and would not be able to re-join the Fund.
A step-by-step guide to opting out
Here’s an idea of the typical steps that need to be taken – you can also see what you’d need to provide, and when and how to provide them.
- Actions for you
- Actions for us, the administrator
Get a quote
See the value of the Fund benefits you’ve built to date.
Get advice from an independent financial adviser. This may take a few weeks or months to arrange, so start this process as soon as you can.
Opt out (if it’s right for you)
NatWest will tell us your opting out date
This is the date when you’ll stop building up future benefits in the Fund. This means you will become a deferred member.
We’ll update your pension record as soon as possible
You’ll receive a letter in the post with your new log in details.
Check your pension record
You’ll be able to see that your record has been updated one month after your notice period ends.
How long will it take?
You’ll need to give at least a month’s notice when you opt out, so it normally won’t happen until the month after next. For example, if you opt out on 15 April, your last day of active membership will be 31 May. The whole process can take up to 2 months.
What else you should know
If you opt out while still working for the bank, you’ll automatically join another saving plan
Depending on your reason for opting out, the bank may automatically enrol you into its defined contribution pension arrangement, the NatWest Group Retirement Savings Plan.
How the Plan works. You build up a pot of money that you can use when you decide to stop work. You put in some money every month, the bank puts in some for you too, and you’ll get tax relief on top. This money is invested to help it grow. How much you’ll get when you stop work depends on how much you put in, how the investments perform, and how you choose to take your money when you come to use it.
You’ll start by automatically saving 8% of your ValueAccount. You can choose to save more than this if you like, up to certain limits.
You can opt out of this Plan too, if you want to. You might want to do this if you’ve already built up a total of more than the Lifetime Allowance in pension savings and opting out could mean you’d avoid losing any valuable tax protections.
Your pay will be affected
Opting out of the Fund may mean your take-home pay goes up, but not always, and you may not be better off overall. That’s because the value of the Fund pension you’d be giving up is usually greater than the extra take-home pay you’d get.
You may also be automatically enrolled into the NatWest Group Retirement Savings Plan, which you’d need to contribute to.
Currently you pay a percentage of your basic salary into the Fund. If you join the NatWest Group Retirement Savings Plan when you opt out of the Fund, you’d no longer be paying this percentage into the Fund, but you would contribute 8% of your ValueAccount into the NatWest Group Retirement Savings Plan instead.
The income you would receive (when you retire, for the rest of your life) would be affected
The amount of lifetime income you’ll get will be calculated using your pensionable service and final pensionable salary at the date you opted out.
Between the date you opt out and the date you start taking your pension, it should increase a bit every year to help keep up with the cost of living (inflation).
Leaving the Bank
If you stop working for the bank, you’ll automatically leave the Fund and stop building up further benefits. You can then choose to keep your benefits in the Fund until you’re ready to take them or transfer some or all of your benefits to another pension arrangement.
What changes if you keep benefits in the Fund?
You’ll become a deferred member
While you are working at the bank and a member of the Fund, you are an active member; building up future benefits each year. When you leave the Bank, or if you remain at the bank and opt out, you stop building up benefits and defer your Fund pension until you decide to take it.
You’ll need a password to log into your pension record
Once you’ve left the bank, you’ll need a username and password to log into Your Pension. Get in touch so that we can send you these details.
Your income would be affected
The amount of lifetime income you’ll get will be calculated using your pensionable service and final pensionable salary at the date you left. Shortly after you’ve left the Fund, we’ll send you a statement of benefits which confirms the value of your benefits at the date of leaving. You can also log in and request this statement.
Death benefits may change
Pensions paid to loved ones would be based on your deferred retirement income and any lump sum payment would be calculated differently compared to if you were an active member. Your Schedule Factsheet shows what’s paid if you die when you’re a deferred member.
Stay in touch
Before you leave the bank, make sure we have your up-to-date personal email, phone and address details, so you don’t miss out on important information about your benefits. You can update these online once you log in.