DB Members

Employed Deferred Members

An employed deferred member is a member of the Plan who was in DB Pensionable Employment on 12 March 2011 and has been employed continuously by the Company since that date and is still employed by the Company.

The Defined Benefit Section of the Plan was closed to future accrual on 12 March 2011.

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You paid a percentage of your Pensionable Salary for a maximum of 40 years. At 12 March 2011 you paid 5% or 6% of your Pensionable Salary and the percentage you paid affected your accrual rate which was:

Contribution Rate Accrual Rate
6% 1/60th
5% 1/80th

NICwise was a National Insurance contribution efficient way of paying contributions to the Plan. NICwise reduced the amount of National Insurance contributions payable and increased your take home pay and also reduced the amount of National Insurance contributions payable by the Company.

The pension you receive from the Plan when you retire at your Normal Pension Age is based on your Final Annual Earnings and your Pensionable Service. Your pension is the higher of the following 2 calculations:

  1. Final Annual Earnings at date of retirement/Accrual Rate x Pensionable Service to 12 March 2011
  2. Your benefits calculated as if you had left the Company on 12 March 2011

(Final Annual Earnings at 12 March 2011/Accrual Road x Pensionable Service to 12 March 2011) with any GMP element increased as required by legislation and pension in excess of your GMP increased in line with normal pension increases.

The earliest age at which you can retire and receive a pension is 55, unless you are retiring because of ill-health in which case you can retire at any age (provided that certain conditions are met).

Members can take voluntary early retirement with the agreement of the Company after age 55. When calculating your pension a deduction will be made because you will receive your pension early. Your accrued pension is reduced by 1/3% for each month (4% a year) you retire before normal pension age.

The ERF is a non-contractual facility operated by the Company that allows members to retire early on pensions that may be better than would apply under voluntary early retirement. (Your accrued pension is reduced by 1/3% for each month (4% a year) before age 60.) Company consent is required to take advantage of ERF. The ERF will continue until 31 December 2015. From 1 January 2016 the ERF will no longer be available and all retirements effective after this date will be paid in line with the Trust Deed & Rules. For more information please read this document.

If your retirement from the Company is due to ill-health or injury you may be eligible to receive an immediate pension. 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 who must be satisfied with the medical evidence for the purpose of legislation.

You may be eligible to receive your pension early if, in the Company’s opinion, after considering medical evidence, you are prevented by your mental or physical impairment from following your normal or an equivalent occupation with the Company, or you could perform a lesser job, but your earnings capacity is seriously impaired.

On retiring early from employment with Mitchells & Butlers due to ill-health your deferred benefit is paid without any reduction.

Your ill-health early retirement pension is subject to a maximum of 40 years of Pensionable Service.

If you recover to any extent or have material earnings from employment, the Trustees have the right to reduce or completely suspend your pension payments until your Normal Pension Age and alter your death benefits depending on the circumstances.

The levelling option is not available for ill-health early retirement.

When you retire you may have the option to exchange part of your pension for a tax-free cash sum. The maximum tax-free cash sum available at retirement will be approximately 25% of the value of your Plan pension (plus 25% of the value of your Plan AVC account, if you have one) or approximately 25% of your available Lifetime Allowance if less.

The amount of pension you need to exchange for your cash sum is determined by the Trustees based on financial conditions, your age and the funding level of the Plan. The calculation needed to work out the exact amount of tax-free cash available is quite complicated. Precise figures will be available from the Administrator when you are approaching retirement. Further details are included in the Plan Handbook.

State retirement pensions are not paid until your State Pension Age. The Plan has a levelling option which, subject to the Trustees’ consent enables you to have a higher pension up to an age determined at your date of retirement in return for a lower pension thereafter. The age to which you level is determined by the Trustees’ after taking into account relevant information including State Pension Age and legislation, this may not be your State Pension Age. The levelling option helps to level out the income you receive throughout your retirement. Once you have decided to take the levelling option you cannot switch back. Your higher pension may stop before you are entitled to receive your State Pension.

Full details of the levelling option will be included in the pension options given to you shortly before you retire.

Pensions in excess of any Guaranteed Minimum Pension (GMP) are guaranteed to be increased on each 1 October in line with the Retail Price Index (RPI) for the year ending on the preceding 31 May, up to a maximum of 5%.

Your Plan pension is payable for life.

  • A refund of the contributions you have made to the Plan, including Company contributions made on your behalf as part of your participation in the ‘NICwise’ arrangement and any contributions you made to previous arrangements which have subsequently been transferred to the Plan.
  • An immediate pension for your spouse or Partner of 1/3 of your deferred pension.
  • Immediate pensions for up to two dependent children under age 23 of 1/6 of your deferred pension for each child. If there is no spouse’s/Partner’s pension payable these pensions are doubled.
  • Who receives any cash lump sum?

    The Trustees have discretion to pay cash sums payable on your death to such of your beneficiaries as they decide. Currently, this means that payments are tax-free. Possible beneficiaries include your spouse, children and other close relatives or dependants, anyone named as a beneficiary in your will, and other persons you have nominated in writing to the Trustees. This could include registered charities but not impersonal bodies such as political parties or social clubs.

  • Why do I need to complete a Beneficiary Form?

    To enable the Trustees to be aware of your wishes as to the recipients of any cash benefit payable on your death, it is important that you complete and return a Beneficiary Form, which can be obtained from the pension website (www.mbplcpensions.com) or the Administrator. The Trustees will decide to whom to pay any cash sum, taking into account information provided to them about your personal circumstances, including the information you provide on your Beneficiary Form. The Trustees are not bound by your Beneficiary Form (partly to protect the tax-free status of the payment). Your personal circumstances may change and you should review your nomination regularly by returning another form so that the Trustees can take account of your latest wishes. Payment of benefits may be delayed if there is no Beneficiary Form or the Trustees consider the form to be out of date.

  • Who is entitled to receive a pension?

    An immediate pension is payable for your spouse or Partner (someone you were living with in a relationship closely resembling marriage, who had been nominated by you on a Partner Nomination Form received by the Trustees and who was financially interdependent) and for up to two dependent children up to age 23. If there is no spouse’s/Partner’s pension payable these pensions are doubled.

  • What amount of pension will they receive?

    Your spouse/Partner will receive 1/3rd of your deferred pension and up to the maximum of 2 children will receive 1/6th of your deferred pension for each child. If there is no spouse’s/Partner’s pension payable these pensions are doubled. More details in relation to how these pensions are calculated are included in the Plan Handbook.

Under flexible retirement it is possible to receive your pension and continue working part time or undertake a less demanding role. Each case is considered and approved by the Company and Trustees on a case by case basis. A member electing for flexible retirement would take a voluntary early retirement pension, take 100% of their benefit and have the option to join the DC section of the Plan.

  • The Lifetime Allowance (LTA) is set by HMRC and is the overall ceiling on the total amount of savings that any one individual can accumulate in registered pension schemes without becoming liable to an additional tax charge.
  • Benefits will be tested against an individual’s Lifetime Allowance when they become payable. Benefits already taken from other registered pension schemes will be taken into account when calculating the Lifetime Allowance remaining for Plan benefits.
  • Savings above the Lifetime Allowance taken as cash will be taxed at 55%.
  • Savings above the Lifetime Allowance taken as pension will taxed at 25% plus pension income will be taxed at an individual’s marginal rate
  • For the tax year 2011/12 the standard Lifetime Allowance is £1.8m.
  • For the tax year 2012/13 the standard Lifetime Allowance is £1.5m.
  • The capitalisation factor for DB benefits is 20. (For example if the annual DB pension is £5,000, the value for LTA is £5,000 x 20 = £100,000).

It is your responsibility to monitor all your registered pension scheme benefits (including any DB Section and DC Section of the Mitchells & Butlers pension plans) against your Allowances. If you have substantial pension’savings it is recommended that you seek independent financial advice.

  • The Annual Allowance is set by HMRC and is the maximum annual amount that can be saved each Pension Input Period in registered pension schemes and receive tax relief.
  • The Pension Input Period for the Plan is the same as the tax year – 6 April to 5 April.
  • Savings above the Annual Allowance will result in the individual paying tax at their marginal rate on any excess.

The Finance Act 2011 implemented the following*

  • For the tax years 2011/12 to 2015/16 an Annual Allowance of £50,000.
  • Any unused Annual Allowance can be carried forward for 3 years (but the Annual Allowance for this purpose will be deemed to be £50,000 for the tax years 2008/09 to 2010/11).
  • The Annual Allowance applies in each year pension savings are made including the year in which benefits are drawn.

It is your responsibility to monitor all your registered pension scheme benefits (including any benefits from the DB Section and DC Section of the Mitchells & Butlers pension plans and any other pension plans you may have) against your Allowances.  If you have substantial pensions savings it is recommended that you seek independent financial advice.

*At the time of going to print, the Finance Act 2011 has not become law


If you have any questions about pensions please contact the pensions administrators:

Mitchells & Butlers Pensions
4 Brindley Place
B1 2JQ

Telephone: 0845 850 0981
Email: mbplc@mercer.com

An image of the interior of a Mitchells &Butlers pub.