telent Pensions - Plan Booklet - Early Retirement Factor (ERF) changes

The G.E.C. 1972 Plan – Early Retirement Factors and Front End Loading

An indicative list of the factors to be applied to pensions paid before the Plan’s normal retirement age (65) is as follows:

	Reduction
Age at Retirement	Basis 1	Basis 2	Basis 3
50	54.0%	69.4%	55.7%
55	42.3%	56.0%	43.7%
60	25.5%	34.9%	26.4%

(Full list of the of the factors to be applied)

These rates are reviewed annually, as described on

page 5 of the Plan Booklet - 1997 Edition.

The actual rate applied is calculated on the basis of a member’s age in complete years and months at the time of retirement.

Pensions transferred in to the GEC Plan from previous arrangements will be reduced by the same factors that are applied to Basis 1 pensions.

Impact of the Finance Act 2004 on Early Retirement

From 6 April 2010, legislation passed under the Finance Act 2004 increases, from 50 to 55, the earliest age at which a pension can be taken. As such, the Plan’s early retirement factors prior to age 55 will cease to apply from 6 April 2010.

A table detailing how this legislation will affect individual plan members is as follows:

Are you affected by changes to the Finance Act?
If you are currently receiving a pension from the Plan.	You are unaffected by the change
If you: are not currently receiving a pension from the Plan and are already over age 55 or will reach age 55 before 5 April 2010	You are unaffected by the change You may take an early retirement pension, subject to trustee approval, at any time.
If you: are not yet receiving a pension from the Plan and will reach age 55 after 6 April 2010 and are aged over 50 or will reach this age before 6 April 2010	You may be affected You may take an early retirement pension, subject to trustee approval, at any time between when you reach(ed) age 50 and 5 April 2010 If your pension is not put into payment prior to 6 April 2010, the earliest date at which you will be able to take an early retirement pension is when you reach age 55.
If you will not reach the age of 50 until after 6 April 2010	You may be affected You will not be able to take an early retirement pension until you reach age 55

Front End Loading

If a Plan member takes early retirement at say age 55, when the member reaches age 65, the state pension will come into payment and the member’s income will increase.

Whilst this may suit certain people’s circumstances, others may prefer to take more of their pension earlier with a reduced Plan pension at age 65, so that their overall income is smoother.

This is called Front End Loading and it is a facility offered by the Plan. Should a member wish to learn more about the Front End Loading opportunity, he should contact the Pensions Office on 01785 785 400.