Choosing when to retire
We assume that you will retire at your state pension age, so this is what we use when deciding your normal pension age in the Fund. The only time this won’t be the case is if your contract of employment says otherwise. You can take your benefits earlier or later than this if you like.
Retiring early
The Fund’s Trust Deed and Rules set out the age when members can start taking their benefits, but overriding pensions tax legislation sets out the earliest age when members can generally take their benefits without incurring higher tax charges. This is known as the normal minimum pension age and it is currently set at age 55.
However, the Government is raising the normal minimum pension age to 57 in April 2028. This means that, from April 2028, you won’t be able to take your pension benefits before age 57 unless you’re either retiring on account of ill health or you have something called a protected pension age.
If you joined the Fund – or another pension scheme that merged into the Fund (except Purina) – before 6 April 2006, you have a protected pension age of 50. This means the normal minimum pension age doesn’t apply to the benefits you have in the Fund and you can take them from age 50. To do this, you’d have to leave Nestlé’s employment and the Fund, and then retire at the same time.
If you joined the Fund on or after 6 April 2006 but before 4 November 2021, you may have a protected pension age of 55. This will depend on a number of factors including what type of membership you have and whether you are an active or deferred member at the time you want to take early retirement.
If you joined the Fund on or after 4 November 2021, you won’t have a protected pension age in the Fund. So, from April 2028, the earliest you’ll be able to take your benefits in the Fund will be age 57 (unless you’re retiring because of ill health). Until April 2028, though, you’ll still be able to take your benefits at age 55.
If you retire before you reach normal pension age, your DB Core and/or DB CorePlus pension will be calculated in the same way, based on your actual pensionable service in DB Core and/or DB CorePlus. However, it will be reduced for each year that you retire before normal pension age because it’s likely to be paid for longer.
If you take early retirement after leaving the Fund, your early retirement pension will be calculated differently and the options available will be different than if you retire from active service.
If you have a DC Start or DC Core account and you decide to buy an annuity with your account, the pension you’ll receive will depend on the value of your account when you retire, the type of annuity you choose, and the cost of buying a pension at that time.
Retiring late
If you work past your normal pension age (your state pension age, unless your employment contract says otherwise) you can either choose to opt out of the Fund or carry on contributing either until you retire or you reach age 75. The benefits you receive will depend on whether you opt out of the Fund or carry on contributing.
DC Core and DC Start
If you opt out of the Fund at your normal pension age:
- you stop making contributions;
- your DC account will stay invested;
- you should make sure that your investment options and target retirement age still fit with your current plans;
- your death-in-service benefits will reduce to a cash lump sum of 2 x pensionable earnings;
- when you stop working for Nestlé, you can take your benefits - see What will you receive
If you carry on contributing to the Fund after you reach your normal pension age:
- your DC account will stay invested.
- you carry on making contributions as normal, until no later than when you reach age 75;
- you should make sure that your investment options and target retirement age still fit with your current plans;
- your death-in-service benefits will carry on as normal; and
- when you stop working for Nestlé, you can take your benefits - see What will you receive
DB Core and DB CorePlus
If you opt out of the Fund at your normal pension age:
- you stop making contributions and building up pension;
- when you stop working for Nestlé, your DB Core and/or DB CorePlus pension will start. It will be calculated based on your career average revalued pensionable earnings (this is based on your earnings and length of service – find out more in the ‘How your pension builds up’ section) and your pensionable service when you reach your normal pension age (or at the date you opt out if later). This pension (and any defined benefit pension you built up before 1 August 2010) will then be increased by a late retirement factor to reflect the later start date. This ‘late retirement factor’ is used because the longer you have worked, the more you’ve paid into the Fund, and the more pension you get out as a result.
- If you die, your dependants will receive the same benefits as if you had stopped working (see Death after leaving).
If you carry on contributing to the Fund after you reach your normal pension age:
- you carry on making contributions and building up pension as normal, until no later than when you reach age 75;
- when you stop working for Nestlé, your DB Core and/or DB CorePlus pension will be calculated based on your career average revalued pensionable earnings and your pensionable service at the date you stop working for Nestlé and no late retirement factor will be applied.
- your death-in-service benefits will carry on as normal.
Flexible retirement
If Nestlé agrees, you can take all or part of your Nestlé pension at any time from age 55 (under the current law) and carry on working for Nestlé. This is known as flexible retirement.
If you choose this option, you can carry on building up benefits in DC Core while you’re still working for Nestlé, but you must retire and take Nestlé benefits within two years of taking flexible retirement.
Flexible retirement is an HR policy offered at Nestlé’s discretion and is not governed by the Fund’s Trust Deed and Rules. If you’re considering taking flexible retirement, you should look at the HR policy document before making any decisions.
Your options for taking flexible retirement are outlined below.
If you have benefits built up before 1 August 2010
You can take your pension built up before 1 August 2010 at your flexible retirement date and then take your pension built up from 1 August 2010 at your final retirement date.
If you have benefits built up before 1 August 2017
You can take all your benefits built up before 1 August 2017 at your flexible retirement date and then take your benefits built up from 1 August 2017 at your final retirement date.
For everyone
You can take all your pension built up until your flexible retirement date and then take your retirement income built up in DC Core after your flexible retirement date at your final retirement date.