Tower Plan

Overview

The Tower Plan is closed to new employees. All benefits provided by the Plan are subject to the Siemens Benefits Scheme’s maximum limits and any impact of the Lifetime Allowance. Any increase in the value of your benefits is measured against the Annual Allowance. 

 

When you come to draw your benefits, you will have the option of giving up part of your own pension to provide an additional pension for your spouse payable on your death. For more details please contact AskHR.

In the Tower Plan, your benefits built up at a rate of 1/60th of your final pensionable salary for each year of pensionable service, subject to maximum limits. 

 

You can give up some of your pension and take it as a tax-free cash sum, broadly up to 25% of the value of your benefits, up to your available Lifetime Allowance. This will reduce your pension, so you should consider taking independent financial advice first. Your pension will be paid monthly and will be paid on the next available payroll date after your retirement. Your first payment will include any arrears due.

 

Retirement means different things to different people. Some may want to retire early, while others may choose to work past age 65 and continue to build up benefits. Or you may want to make more of a transition into retirement. Whatever you want to do, the Plan gives you a range of options.

 

Drawing your pension as a deferred member 

 

You may be able to:

  • start drawing your pension at your normal retirement date 
  • start drawing your pension before or after age 65 
  • start drawing your pension because of ill health. 

Between your date of leaving and drawing benefits your deferred benefits are indexed. The indexes are governed by law and are described as Statutory Revaluation. This helps to preserve the value of your benefits. Different rates apply to any Guaranteed Minimum Pension (GMP). 

 

 

As a deferred member you have the following options at retirement:

 

Early Retirement – Deferred member - early retirement

 

Subject to Trustees' consent, you can draw your deferred benefits at any time from minimum pension age. Your benefits will be reduced because they are being paid early, as shown below: 

Age at retirement

Early retirement reduction

55

20%

56

16%

57

12%

58

8%

59

4%

60 or over

0%

However, if you are an Old Benefits member who was made redundant between the ages of 45 and 50 having completed at least 10 years' pensionable service, your deferred benefits on retirement at age 50 will be reduced as shown below:

Age at redundancy

Early retirement reduction

45

10%

46

8%

47

6%

48

4%

49

2%

50

0%

Normal Retirement

Your normal retirement date is the end of the month in which you reach age 65.

 

Late Retirement

Your benefits will be increased to allow for this late payment. You can’t draw your benefits any later than age 75.

 

Ill Health Retirement

If you have reached minimum pension age no special terms arise from your reason for retirement. If you have not reached minimum pension age you may, with the consent of the Trustees, be able to draw your benefits early. 

 

This is subject to the Trustees agreeing, after taking medical advice, that you are (and will continue to be) incapable of doing your normal job due to your physical or mental health. Your pension will be reduced to reflect early payment. 

When you die, the Plan offers a range of benefits for your family and dependants.

 

The Trustees have the discretion to decide how your cash sum death benefit is divided between your relatives, dependants, legal personal representatives or nominated beneficiaries. This way, payment can be made more quickly and the benefits are unlikely to attract inheritance tax.

 

However, you can complete an Expression of Wish form and the Trustees will pay close attention to it. You would be wise to keep it up to date if your circumstances change – if you get married, register a civil partnership, separate or divorce, or have children. Even if you are unattached or don’t have children, you may have family members or close friends who you would want the Trustees to consider.

 

If you die as a deferred member

 

Cash sum

A cash sum equal to a refund of your contributions, plus the value of any AVC or EDC fund (excluding AVC-added years contributions) you have, will be paid to your relatives, dependants or legal personal representatives. Special circumstances may apply if you die within 12 months of being made redundant and have not started another job.

 

Spouse's pension

A spouse's pension will be paid equal to 60% of your deferred pension. 

If you are more than 10 years older than your spouse or partner, the Trustees have discretion to reduce their pension.

 

Eligible children's pension

A pension based on the spouse's pension will be paid for your eligible children as follows:

Number of eligible children

% of spouse's pension if a spouse's pension is paid

% of spouse's pension if no spouse's pension is paid

1

33.3%

133.3%

2

50% divided equally

150% divided equally

3 or more

66.6% divided equally

166.6% divided equally

Pension for a Dependant

In certain circumstances, a pension may be payable under the Scheme’s Trust Deed and Rules to one or more of your Dependants. In broad terms, for these purposes a Dependant is:

  • any person who is financially dependent on you or with whom you have a relationship of mutual dependence;
  • or any children who have not reached the age of 18 or who are in full time education or training up to the age of 24 or who are dependent on you because of disability

 

If you die after drawing your pension

 

Cash sum - 5 year guarantee 

If you die within 5 years of retirement, a cash sum equal to the balance of 5 years' instalments of your pension plus any unused AVC and EDC account balances will be paid. For information on the cash sum paid if you retire later and die after age 75, please contact AskHR. 

 

Spouse's pension

A spouse’s pension will be paid equal to 60% of the pension you were receiving when you died (this will not include any of your pension bought through AVCs if that pension was described as ‘single life’ or equivalent).

 

If you are more than 10 years older than your spouse or partner, the Trustees have discretion to reduce their pension.

 

Eligible children's pension 

A pension based on the spouse's pension will be paid for your eligible children as follows:

Number of eligible children

% of spouse's pension if a spouse's pension is paid

% of spouse's pension if no spouse's pension is paid

1

33.3%

133.3%

2

50% divided equally

150% divided equally

3 or more

66.6% divided equally

166.6% divided equally

Pension for a Dependant

In certain circumstances, a pension may be payable under the Scheme’s Trust Deed and Rules to one or more of your Dependants. In broad terms, for these purposes a Dependant is:

  • any person who is financially dependent on you or with whom you have a relationship of mutual dependence;
  • or any children who have not reached the age of 18 or who are in full time education or training up to the age of 24 or who are dependent on you because of disability

Once in payment, your Tower Plan pension is subject to annual reviews in line with the Retail Prices Index (RPI). 

 

Your Plan pension, other than part of any Guaranteed Minimum Pension (GMP) element, is guaranteed to increase each year on 1 April by the rise in RPI during the 12 months to the previous December, up to a maximum of 5%. If RPI does not increase, your pension will remain at the same level (it will not decrease). 

...you get divorced?

Pension rights are normally taken into account as part of a couple’s assets. There are a number of options available to the Court in dealing with pension rights and we will comply with any instructions from a court. If you need more pension information, please contact AskHR.

Waiting period members 

Someone who is not a member of the Plan, but who will be eligible to join it on completion of a specific period of service.

 

Maximum limits

For the 2019/20 tax year, the earnings cap is £166,200 a year. It increases broadly in line with increases in the Retail Prices Index (RPI). The earnings cap does not apply to anyone who joined their former employer’s scheme before 1 June 1989. Maximum Siemens Benefits Scheme limits apply only to your Plan benefits. You may have additional Investor Plan benefits that exceed these limits.

 

Lifetime Allowance

A limit on the total value of pension benefits that you can build up tax-efficiently during your lifetime, including your Plan benefits and benefits from other pension arrangements, except those from the State.

When you take any benefits from the Plan, their value will be checked against your available Lifetime Allowance. The Lifetime Allowance is £1,055,000 for 2019/2020. Benefits built up above the Lifetime Allowance can only be taken as cash and will be taxed, currently at an overall rate of 55%.

 

Spouse

The person to whom you are legally married at the date of your death. In line with the Civil Partnership Act 2004, same-sex partners who have been through a civil ceremony will be treated as spouses with regard to payment of any contracted-out benefits built up after 6 April 1988. In addition, they will be treated as spouses in all respects with regard to benefits built up after 5 December 2005. 

If you are not married or are not in a registered civil partnership, or are not living with a spouse, this definition also includes any person who, in the opinion of the Trustees, was dependent on you financially or because of disability or had a financial relationship of mutual dependence with you. 

 

Annual Allowance

The Annual Allowance is the amount your pension contributions and benefits can increase in value each year without incurring a tax charge. Benefit increases arising from Statutory Revaluation do not count towards the Annual Allowance but any contributions you and the Company have made to your Investor Plan investment account will do so.

The Annual Allowance is £40,000.

AVCs and EDCs are also limited by the Annual Allowance. Any AVCs or EDCs paid above the Annual Allowance will incur a tax charge.

A reduced Annual Allowance applies in some circumstances such as for high earners or for anyone that has taken advantage of flexible Money Purchase benefits. For more information contact AskHR.

 

Final pensionable salary

The total basic contractual pay, annual salary or wages, together with London Weighting allowance, bonuses, unpredictability allowances, deputisation payments and shift payments you received in the 12 months immediately before leaving active membership.

 

Pensionable service

Any continuous period in years and complete months during which you were a contributing member of the Plan plus any service credited in respect of service in the BBC Pension Scheme or the purchase of added years via AVCs.

 

Statutory Revaluation

This is a form of limited indexation of benefits prescribed by law. It requires that deferred benefits are indexed from your date of leaving to the date they come into payment or to the date you transfer your benefits to a new employer’s scheme or personal pension scheme, or to your normal retirement date. 

This indexation is currently based on the rise in the Consumer Prices Index (CPI) subject to a maximum of 5% a year for benefits built up before April 2009 and 2.5% a year for benefits built up after that date. 

 

Guaranteed Minimum Pension (GMP)

The minimum level of pension that the Plan has to provide you with if you have pensionable service between 5 April 1978 and 6 April 1997. It replaces the pension you would have received from the State Earnings Related Pension Scheme (SERPS). SERPS later became the State Second Pension (S2P).

 

Old Benefits member

A Plan member who joined the BBC Pension Scheme before 1 October 1996.

Log in to your DB account

Log in to get your pension information. If you have not already registered for your online account, please contact AskHR who will be able to provide you with your registration details.

 

By registering and logging in you can view/update the following...

 

  Your current pension amount and tax code

  A history of previous payments

  Your personal details, including postal and e-mail address

  Your bank details

and much more...

Contact Pensions

If you are an active Siemens Employee contact us via HR Direct


If you no longer work for Siemens (or don't have access to (HR Direct) contact us via the AskHR email or post.

Email: askhr.uk@siemens.com

Post: PO Box 9011, Poole, BH12 9HW

Telephone: 01202 846000