What is NICwise?

NICwise is a more efficient way for the Company to make contributions to the Plan providing a significant reduction in National Insurance costs for the Company. Take a look at the Contributions section for more information on NICwise.

What happens when I leave Mitchells & Butlers?

Once you have left the Company, all contributions to your account stop and you are no longer eligible for ill-health and life assurance benefits, your options will depend on how long you have been a member of DC Choice.

I have been a member for less than two years when I leave the Company (and no transferred-in benefits)?

If you have been a member of the Mitchells & Butlers Pension Plan for less than two years and have not transferred any other pension benefits into your account, you have three options:

• Option one
  You can ask for a refund of your contributions.

  For any period where you are participating in NICwise you are not making Core Contributions, so there would be no contributions to refund.

  For any period where you did not participate in NICwise, the value of the part of your account relating to your Core Contributions will be refunded to you.

  Whether or not you participated in NICwise, if you select Option one, any AVCs you have paid will be refunded to you. The value will reflect any gains or losses made on your investments, but will be subject to a tax charge.

• Option two
  You can transfer the total value of your account, including the Matching Credits, to another suitable pension arrangement such as your new employer’s pension scheme or a stakeholder pension. You must let the administrator know this is what you want to do within 3 months of leaving otherwise you will receive a refund as described in Option one.
• Option three
  You can leave your account invested and then transfer it at a later date, or use it to buy an Annuity when you retire. Your account will continue to be invested and you will receive an annual statement showing its current value. You must let the Administrator know this is what you want to do within 3 months of leaving otherwise you will receive a refund as described in Option one.

If you choose Option three and leave your account invested but die before using its proceeds, the full balance may be paid as a cash sum to your beneficiaries.

What if I have been a member for more than two years and leave the company (or with transferred-in benefits)?

If you have been a member of the Plan for two or more years or have transferred other pension benefits into your account, you have two options:

• Option one
  You can transfer the full value of your account to another suitable pension arrangement such as your new employer’s pension scheme or a stakeholder pension.
• Option two
  You can leave your account invested and then transfer it at a later date, or use it to buy an annuity when you retire. Your account will continue to be invested and you will receive an annual statement showing its value.

If you choose Option two and leave your account invested but die before using its proceeds, the full balance may be paid as a cash sum to your beneficiaries.

What if I take maternity or family leave (parental, adoption or paternity leave)?

The guide below shows how maternity and other Family Leave currently affects your pension contributions and benefits.

If you go on maternity or family leave and your Core Contribution and Matching Credit continue, they will be at the rate selected before commencing leave.

* Contributions will be deducted at your chosen percentage rate (4% or 5%) that was in force immediately before the family leave started.

• Will it make any difference if I participate in NICwise?

  If you are a NICwise participant you will, whilst on family leave continue to participate subject to you being in receipt of sufficient Company maternity/paternity/parental/adoption pay to enable the NICwise reduction to be applied. Your participation in NICwise will be suspended where this does not apply. On your return to work your participation in NICwise will automatically resume unless you choose to opt out under the lifestyle change provision.

• Can I make up the contributions which were missed while I was away?

  On returning to work from unpaid family leave you may request that for any period where the Matching Credit was nil that Matching Credits are paid. You will be required to make Core Contributions for the same period.

• What happens if I decide not to return to work?

  If you take maternity or adoption leave but later decide not to return to work, you will be deemed to have left DC Choice with effect from the date your paid maternity or adoption leave ended. You would then be notified of your options by BlackRock, the Administrator of DC Choice.

What if I decide to leave DC Choice?

If you decide to leave DC Choice, while you are still working for the Company, the same options apply as leaving the Company. If you decide to leave, you should give one month’s notice by completing an opting-out form (available from the Administrator).

You can opt-out of DC Choice at any time. If you do, you should be aware that:

• your life assurance cover will be reduced from 6 times Benefit Pay to 1 times
• you will not be entitled to any ill-health benefits.
• you may be able to rejoin at a later date (up to your Normal Pension Age) but you will need to provide further evidence of your state of health acceptable to the Company and the Trustees.

When can I retire?

You can currently begin to receive your pension at anytime between age 55 and 75. If you were a DC member on 5 April 2006, have made continuous contributions since that date and retire from active status, you can choose to retire from age 50. When you retire, you can use the money in your account to buy a pension to suit you and your family.  In agreement with the Company and the Trustees, it may be possible to use some of your account to buy benefits whilst still continuing to work and make further contributions.

What is my Minimum Pension Age?

Minimum Pension Age is 55.

Members who are employed by the Company, have continued service and who joined the Plan before 6 April 2006 have a "protected minimum pension age" and may receive their pension from age 50, provided they meet certain conditions on retirement.

What are my benefits when I retire?

When you retire you can choose how to take your benefits. You can use your account to buy an annuity, otherwise known as a pension, or take up to 25% as a tax-free cash sum and use the balance to buy an annuity.

It may be possible, in agreement with the Company and Trustees, to use part of your account to buy an annuity and take a tax-free cash sum, whilst still continuing to work and make further contributions.

An annuity will provide you with a regular retirement income. The size of your pension will depend on:

• the value of your account. The amount you have in retirement will depend on how much you have contributed to your account, how well your investments have performed and how long your account has been invested.
• your age at retirement. The younger you retire, the more expensive your annuity will be – because it is expected that you will be provided you with an income over a longer period.
• the cost of buying an annuity when you retire. The price of annuities varies from time to time depending on market interest rates and the type of annuity that you buy.
• the amount of tax-free cash you choose to take.

You can choose to buy your annuity from a range of companies. This company (normally an insurance company) will then pay you a regular income for the rest of your life.

When making this decision it's important to shop around for the best deal. When you are near to your retirement date, DC Choice will provide you with some options to help you make this decision. It may be a good idea to speak to an independent financial adviser to make sure you get the best possible deal.

Do the insurance companies make any charges?

There will usually be a one off charge when you purchase your annuity, this may be a fixed amount or based on the value of your fund. The charge will vary depending on the annuity provider you choose. This charge may be taken from your DC Choice fund.

The Trustees have arranged with Hargreaves Lansdown that they will provide details of various pension options available to you when you retire and arrange the purchase of your annuity. Hargreaves Lansdown will make a fixed one-off charge for arranging this purchase of your annuity regardless of the value of your fund. (The agreed charge in the 2010/11 Plan year is £250.00 plus VAT.) You can access this service by contacting the DC Choice Helpline. In addition, and prior to incurring any charge from Hargreaves Lansdown, we recommend that you take independent financial advice.

What if I’m ill?

If you have to leave work due to serious ill-health or because of an accident before you reach your Normal Pension Age, DC Choice will credit your account with a lump sum. The amount will depend on how seriously ill or hurt you are:

Full incapacity - if you are expected to be prevented permanently from doing any paid work with any employer, not just with the Company, DC Choice will credit your account with 1/4 of your Benefit Pay for each full year you would have served from the date you had to leave your job to your Normal Pension Age, or to the end of your contract if you are a fixed-term employee.

Partial incapacity - if you are unable on a long-term basis to continue your normal type of work or any equivalent type of work with the Company – and your earning ability is seriously impaired – DC Choice will credit your account with 1/12th of your Benefit Pay for each full year you would have served from the date you had to leave to your Normal Pension Age, or to the end of your contract if you are a fixed-term employee.

The amount you receive for any additional full months you would have served will be worked out proportionately.

The Company will determine your eligibility for the payment of ill-health benefits and will base its decision on medical evidence, which will also be provided to the Trustees.

Once you have left your job on the grounds of full or partial incapacity as determined by the Company and so long as the Trustees have received the appropriate medical evidence, you can use the proceeds of your account to provide an immediate pension at any age.

Alternatively, you may be able to keep your account invested with DC Choice and use it to purchase a pension at a later date.  If your life expectancy is less than one year, the Company and the Trustees have received evidence from a doctor to that effect and in the Company’s opinion your life expectancy is less than one year, you may be able to take the value of your account as a cash lump sum.

Any payment made to you on the grounds of ill-health will be subject to HM Revenue & Customs (HMRC) rules and restrictions.

After you have left work on the grounds of incapacity, you will continue to be eligible for life assurance benefit of 6 times your Benefit Pay minus the ill-health credit paid to your account when you left service. If you left due to full incapacity, this cover will continue until your Normal Pension Age. If you left due to partial incapacity, this cover will cease after five years (or your Normal Pension Age, if sooner).

What if I die?

DC Choice offers the comfort of knowing that your family will have some financial security if the worst happens.

If you die whilst an active member of DC Choice and whilst employed by the Company before reaching 75, DC Choice will pay out a life assurance cash sum of 6 times your Benefit Pay, plus the money saved in your account.

You should ensure that you have completed a Beneficiary Form, stating who you would like to receive the money. In order to protect the tax-free status of the cash sum payment the Trustees are not bound by your wishes, but will always take them into account when making their decisions.

Please make sure you keep your Beneficiary Form up to date especially if your circumstances change, for instance, if you marry or divorce, or have a child.

In some circumstances, part of your account may be used to provide a dependant’s pension on your death.  Please ensure you complete the Dependant’s Form by nominating one or more dependant(s) and what proportion they should receive.

What if I get divorced?

If you get divorced and DC Choice receives a pension sharing order, your ex-spouse will become entitled to a share of your account – called a pension credit. The Trustees will require your ex-spouse to transfer this pension credit out of the Plan (unless he or she is also an active member at the time the order is received). DC Choice will make a charge to implement the pension sharing order. Further information about pension sharing is available from the Administrator.

If you have a registered civil partner and the partnership is dissolved and DC Choice receives a pension sharing order then the position will be the same as that outlined above in relation to divorcing couples.