As a member of the Fund, you’re building up benefits to provide for your retirement. This could be a pension paid from your normal pension age (NPA) or other options like taking a cash sum or retiring earlier or later than your NPA.

Deciding how and when to take your benefits is an important decision and, in this section, we’ll explain the options available to you.

We assume you’ll retire at your Normal Pension Age (NPA) but, if you want to, you can retire with Nestlé’s consent at any age from 55 (rising to 57 in 2028) to 75. Read more about choosing when to retire.

Your options

As a DB Core or DB CorePlus member, your Fund membership is designed to provide you with an income for the rest of your life. However, if you want to, you can exchange part of this income for a selection of other options.

Taking all your benefits as a pension

Your pension from DB Core and/or DB CorePlus will be paid monthly for the rest of your life directly from the Fund into your bank or building society. You will pay income tax on your pension in the same way as you do on your pay at the moment, although your tax code might change, but you do not pay National Insurance. If you retire mid-month, the first payment will include a proportionate amount for the month you retired in.

Taking a pension and cash sum

You can take up to 25% of the value of your pension as a tax-free cash sum when you retire. To do this, you’d need to give up some of your DB Core or DB CorePlus pension.

If you also have a DC account (for example, built up in DC Core or DC Start), you can use some or all of that DC account to ‘fund’ your tax-free cash sum. This means you need to give up less DB pension to provide your chosen tax-free cash sum.

How is the value of your cash sum calculated?

If you choose to exchange part of your pension for a cash sum, Nestlé Pensions calculates the amount of pension to exchange for your chosen cash sum. This process is known as ‘commutation’ and the exchange rate is known as the ‘commutation factor’.

There a number of commutation factors and the one used to calculate each member’s cash sum will depend on the age they retire at and the rate at which their pension is due to increase each year once its’ being paid.

In order to ensure all the commutation factors are fair the Fund reviews them each year. Following each review, the amount of cash you receive in exchange for your pension may increase, or at other times decrease, compared to the year before.

If you decide to take a cash sum, the amount of cash you’ll receive in return for your pension may change when the commutations factors are reviewed. For information on what can influence any change see Calculating cash sums.

Level pension option

If you have built up a defined benefit pension in the Fund and you take your pension before you reach State Pension age, you may be able to take a higher pension in the years between retirement and State Pension age and a lower pension after you start to receive your State Pension, so that your total income broadly remains the same. This is known as the ‘level pension option’.

You can find out more by contacting Nestlé Pensions.

Single person’s option

If, while you were building up a defined benefit pension in the Fund, you were single and never had a spouse, civil partner, dependant or children, you may be eligible for an increase to your defined benefit pension when it starts being paid, provided that you give up any future entitlement to benefits for any spouse, civil partner, dependant or children.

You can find out more by contacting Nestlé Pensions.

Increased pension for a dependant

If you have built up defined benefit pension in the Fund, you may be able to take a lower pension for yourself in exchange for providing a higher pension for your dependants when you die.

You can find out more by contacting Nestlé Pensions.

If you have DC savings

As a DC Start, DC Core or a DB member with DC savings, you can choose to use your DC savings in one or a combination of the following ways:

The maximum amount you can take as a tax-free cash from your pension(s) (including pensions from different pension schemes) when you retire cannot exceed the ‘lump sum allowance’. For more information see Pensions and tax.

Why do some DB members have DC savings?

In addition to the benefits built up as a member of DB Core or DB CorePlus, you may also have defined contribution (DC) savings because:

• your earnings were above the pensionable earnings cap.
• you’ve made additional voluntary contributions (AVCs).
• you’ve transferred another pension into the Fund.
• you were a member of a previous DC section (Lane 1 or Purina Pension Savings Plan).

Membership of previous pensions

Pre-August 2017 benefits

If you built up benefits in the lanes before 1 August 2017, you will also receive any pension you built up in Lanes 2 or 3 of the Fund. If you built up a Lane 1 account, this transferred into DC Core and you will have the options described above.

Once you’re receiving your pension built up before August 2017, it receives increases each year to help it keep pace with inflation. The Fund increases your pension built up before 6 April 2006 in line with the rise in the retail prices index (also known as RPI) up to a maximum of 5% a year, and your pension built up from 6 April 2006 in line with the rise in consumer prices index (also known as CPI) up to a maximum of 2.5% a year.

Pre-August 2010 benefits

If you were a member of the Fund before August 2010, you will also receive the pension you built up to 31 July 2010, increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% a year to the date you retire. Nestlé may increase your benefits above 5% but is not required to.

If you were a member of the final salary section of the Purina UK Pension Plan before August 2010, you will receive your pension built up to 31 July 2010 in that plan, increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% a year to the date you retire. Nestlé may increase your benefits above 5% but is not required to.

Your Purina pension deduction was also calculated at 31 July 2010 and, as long as you remain in Nestlé's employment, is increased in line with the retail prices index (also referred to as RPI) up to a maximum of 5% each year until your state pension age. For more information about the deduction see the Pension Deduction leaflet.

If you were a member of the Purina Pension Savings Plan before August 2010, the value of your account in the Pension Savings Plan transferred into Lane 1 of the Fund at 1 August 2010 and then transferred into DC Core at 1 August 2017. You can choose how to provide benefits from your DC Core account from the options described above.

If you were a member of the Nestlé Waters UK Ltd Retirement Benefit Scheme before August 2010, the value of your account in that scheme transferred into Lane 1 of the Fund at 1 August 2010 and then transferred into DC Core at 1 August 2017. You can choose how to provide benefits from your DC Core account from the options described above.

If you built up benefits in any other arrangement that merged into the Fund before August 2010, you should refer to the details you received about how your benefits increase to keep pace with inflation.

If you transferred from the Rowntree Pension Fund to the Nestlé Rowntree Pension Fund in April 1992, you will have a Value for Money Guarantee. For more information see the Value for Money Guarantee Leaflet.

Retiring overseas

If you’re planning on spending your retirement overseas, we will still be able to pay your pension, provided you’re living in a country with an established banking system. It is possible to make international payments by bank transfer. However, you should bear in mind that the payment would be made in sterling and the receiving bank might make a charge for converting it into the local currency, which will be deducted from your pension and we will need to see your passport to carry out anti-money laundering checks. Please note we can still make payments to a UK bank account even though you’re living overseas.