DB Jargon Buster

Jargon Buster

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The fraction of your Final Pensionable Salary earned for each complete year of Pensionable Service in the Plan.

The organisation appointed by the Trustees to process the day-to-day enquiries, benefits administration and pensioner payroll. Contact details are: Mitchells & Butlers Pensions, Mercer, 4 Brindley Place, Birmingham B1 2JQ. Telephone:0845 850 0981 Email: mbplc@mercer.com

  • 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.

For lunar paid members Annual Earnings is calculated on the first Monday in January and applies for twelve months from the following 1 April.  For all other members Annual Earnings is based on the current hourly rate of pay.  Annual Earnings is the sum of:

  • basic pay – from 30/09/2009 increases in basic pay for pension purposes are limited to a maximum increase of 2% in any year (1 October – 30 September)
  • shift allowances (including unsociable hours and weekend payments)
  • guaranteed overtime (including extra hours/other hours payments)

If you joined the Plan prior to 6 April 1997, the elements of pay that make up your Annual Earnings remain as previously advised subject to the restriction on increases to basic salary outlined above.
The Company’s decision as to whether earnings fall within the categories listed above and the amount of earnings is final.

Any Mitchells & Butlers Company that participates in the Plan.

The section of the Plan that operates on a defined benefit (otherwise known as ‘final salary’) basis. The Plan document specifies the amount of benefits promised to the employee at his normal retirement date. It does not specify the amount that the employer must contribute annually to the Plan to achieve the benefit.

The section of the Plan that operates on a defined contribution (otherwise known as ‘money purchase’) basis. This type of plan has a separate account for each employee. The Plan document for this section states the amount that an employer will contribute to the Plan, but it does not promise any particular benefit.

A child under the age of 18, or under the age of 23 and in full time education.

An amount deducted from your Final Annual Earnings in respect of Pensionable Service prior to 1 April 2002. The deduction is £2,652 for the year from April 2011 and is reviewed annually in line with changes made to State benefits by the Government. No Earnings Deduction is made for Pensionable Service from 1 April 2002.

The earnings on which your pension benefits are based. It is the sum of the elements of pay which make up your Annual Earnings during the twelve months before your Normal Pension Age or, if earlier, the date you die, leave service or withdraw from the DB Section of the Plan. For Pensionable Service prior to 1 April 2002 Final Annual Earnings is reduced by the Earnings Deduction.

  • 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 be 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 pensions savings it is recommended that you seek independent financial advice.

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).

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.

Age 65.

A person who:
EITHER

  • is your registered civil partner at the date of your death,

or

  • was living with you in a relationship closely resembling marriage for at least twelve months prior to (and at the time of) your death, and
  • had been nominated by you on a Partner Nomination Form received by the Trustees, and
  • whose standard of living at least partly depended on your earnings or who at least partly supported you financially at the time of your death.

A Partner Nomination Form is available on the pension website (www.mbplcpensions.com) or on request from the Administrator.

For any period of membership when you work part-time your Annual Earnings are the full-time equivalent for the job. Your Pensionable Service and contributions are calculated on a proportion of full-time hours to your actual hours. Actual hours may be your contractual hours or your actual worked hours, as determined by the Company.

With effect from 1 October 2009, Pensionable DC Supplement Pay may apply in respect of members of the DB Section of the Plan who received an increase in salary in any 12 month period (1 October – 30 September).  Pensionable DC Supplement Pay is not included in the calculation of DB Benefits.

Your last period of membership of the DB Section of the Plan excluding certain periods when you did not pay contributions. Pensionable Service ends on the earliest of 12 March 2011, retirement, death, leaving the employment of the Company, ceasing to be a member of the DB Section of the Plan or age 75. Pensionable Service is calculated in years and days and is limited to 40 years.

Mitchells & Butlers Pension Plan formerly named the Six Continents Pension Plan and the Bass Pension Plan.

The Plan is registered with HM Revenue & Customs (HMRC) under Chapter 2 of the Finance Act 2004.

The State Second Pension Scheme (SP2) replaced the State Earnings Related Pension Scheme (SERPS) on 6 April 2002.  The pension is also called the Additional Pension.  The Additional Pension is based on earnings on which National Insurance contributions have been paid since 1978.

The Directors of Mitchells & Butlers Pension Limited, the company that is the trustee of the Plan.

Mercer

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

Mitchells & Butlers Pensions
Mercer
4 Brindley Place
Birmingham
B1 2JQ

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

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