Horizon Plan

How are your benefits calculated? If you joined the Schroders Retirement Benefits Scheme before 1 January 1991Your benefits are worked out at either 31 December 2007, or your pre 1 January 2008 leaving date if earlier. They are calculated as a proportion (taken from the table below) of your full pension at age 60 (normal retirement date), based on your final pensionable salary at either 31 December 2007 or your pre 1 January 2008 leaving date if earlier. This proportion is then adjusted by the pensionable service you actually completed divided by the pensionable service you would have completed by age 60. Here is an example: A member completed 10 years' pensionable service at 31 December 2007 and would have completed 15 years' pensionable service by age 60. Their final pensionable salary at 31 December 2007 was £24,000.

• Using the relevant proportion taken from the table below their full pension at age 60 is:

  24/60 x £24,000 = £9,600 a year

• This is adjusted by actual service (10 years) divided by potential service to age 60 (15 years):

  £9,600 x 10/15 = £6,400 a year

If you joined the Schroders Retirement Benefits Scheme after 1 January 1991

Your benefits built up at a rate of 1/45th of your final pensionable salary for each year of pensionable service up to 31 December 2007 or your pre 1 January 2008 leaving date if earlier, subject to maximum limits.

How are your benefits revalued?

Your benefits at 31 December 2007 or your pre 1 January 2008 leaving date if earlier are revalued every year until you retire or die. The way your benefits are revalued depends on whether you are a:

• Continuing member, or
• Former continuing member. or
• Deferred member.

Enhanced revaluation of benefits for continuing and former continuing members - overview

Your benefits are revalued every year until you retire or die. Normally, benefits are revalued in line with Statutory Revaluation terms but your benefits are also revalued on enhanced terms, which can give a better result. When you take your benefits the higher of the two outcomes will be paid.

Enhanced revaluation is composed of:

• Salary-related revaluation, and
• Statutory-type revaluations

Enhanced revaluation of benefits for continuing and former continuing members - salary-related revaluation

This preserves some link to salaries until 2023 or until you stop being a continuing member, if earlier. As your salary increases, so will your benefits.

The salary-related elements are:

• An annual revaluation that started on 1 January 2009. The value of your benefits at the previous 1 January is revalued by the percentage increase in your final pensionable salary over the year, subject to the salary cap.

  The last annual revaluation will be on the earliest of 1 January 2023, 1 January of the year you take your benefits or 1 January of the year you leave Siemens.

• A part-year revaluation applies if you leave or take your benefits before 1 January 2023. The value of your benefits at the previous 1 January is revalued by the percentage increase in your final pensionable salary over the part-year, subject to the salary cap.

Enhanced revaluation of benefits for continuing and former continuing members - statutory-type revaluations

These are not required by law but they provide the same result as Statutory Revaluation would have done if it had applied over the relevant periods. Statutory-type revaluation is used to provide either:

A minimum level of benefit (underpin), against which the salary-related elements are compared, and applies from:

• 1 January 2008 to your leaving date if it is before 1 January 2023
• 1 January 2008 to 1 January 2023 if you remain a continuing member at that date.

OR

An additional revaluation applied for periods when the salary-related elements no longer apply, that is from:

• your leaving date to payment date
• 1 January 2023 to your leaving date (if earlier than age 60)
• 1 January 2023 to your payment date if you have not previously left Siemens.

Not all of these elements may apply to you as they depend on a variety of factors. For example, if you remain employed with Siemens until you draw your benefits, references to the date you leave won't apply to you. Similarly, if you take your benefits before 1 January 2023, references to revaluation after that date won't apply to you either.

Remember, these enhanced revaluations only apply if they give a better result than would be achieved by Statutory Revaluation.

Revaluation of benefits for deferred members

Between your date of leaving and retirement or death, your deferred benefits are indexed by Statutory Revaluation. This helps to preserve the value of your benefits.

Lump sum on retirement

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 all of your Siemens pension benefits, up to your available Lifetime Allowance. Please go to the resources section to read more about this allowance here.

For continuing members and former continuing members some or all of any tax-free cash sum can come from your Siemens Pension Saving Plan benefits. This means that the amount of your Horizon Plan pension you have to give up to secure a lump sum can be reduced - possibly to nil. You should consider taking independent financial advice first before making any decision that may reduce your Horizon Plan pension.

You have the following options at retirement:

Early Retirement

You can retire from age 55 (increasing to 57 in 2028). If you retire before age 60, your pension will be reduced. Your early retirement pension will be based on your benefits at 31 December 2007 or date of leaving the Plan if earlier (calculated as explained above), revalued each year until retirement and then reduced by an early retirement factor.

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.

Ill Health Retirement

If, after taking medical advice, the Trustees agree that you are, and will continue to be, sufficiently incapacitated, you can draw your benefits early at any age. Your pension may be reduced to reflect early payment.

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

Overview

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 nominate your beneficiaries by logging into My Work Pension and the Trustees will pay close attention to it. You can find the form under 'Your Account' in the menu. 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.

Cash sum

If you are actively contributing to the Siemens Pension Saving Plan a cash sum will be paid to your relatives, dependants, legal personal representatives or nominated beneficiaries. It will be the higher of:

• 3 x your death benefit salary plus the value of your

  Siemens Pension Saving Plan

  fund (excluding any AVCs, EDCs or transfers-in) on the date you die; or

• 6 x your death benefit salary.

In either case, the value of your AVCs, EDCs or transfers-in are added to the cash sum.

The cash sum will be tax free as long as the value of all cash sums from all of your pension schemes is less than the Lifetime Allowance. Please go to the resources section to read more about this allowance here. There will also be a cash sum equal to a refund of your contributions paid into your Horizon Plan, plus the value of any of your Additional Voluntary Contributions (AVCs) and Employee Directed Contributions (EDCs) paid before 31 December 2007. The Trustees have the discretion to decide how the cash sum is divided between your relatives, dependants, legal personal representatives or nominated beneficiaries.

If you are no longer contributing to the Siemens Pension Saving Plan a cash sum of your plan fund value, a refund of your contributions paid into the Horizon Plan before 31 December 2007, plus the value of any of your Additional Voluntary Contributions (AVCs) and Employee Directed Contributions (EDCs) paid before 31 December 2007, will be paid. The Trustees have the discretion to decide how the cash sum is divided between your relatives, dependants, legal personal representatives or nominated beneficiaries.

Spouse’s pension

If you die before you draw your pension a spouse’s pension will be paid equal to 50% of the pension you would have received had you retired on the date of your death.

If you die after drawing your pension a spouse's pension will be paid equal to half 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 reduced your pension to take a cash sum when you retired, this reduction will be ignored.

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 equal to 25% of your revalued pension entitlement on the date of your death will also be paid to your eligible children, up to a maximum of 2 children. If you have more than 2 children, the pensions for 2 children will be divided equally between all of your children.

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 23 or who are dependent on you because of disability

Once in payment, your Horizon 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).

Pension increases are pro-rated for part-year retirements. The increases applied depend on when the benefits were accrued and under which were accrued and under which pension plan. You will receive a letter and payslip annually informing you of your increase.

You can transfer the cash equivalent value of your deferred pension to a new employer’s scheme or personal pension scheme.

...you worked part time?

You still receive the full range of Plan benefits. However, to ensure that your benefits reflect your part-time hours of work, your part-time pensionable salary and pensionable service were re-expressed in terms of their full-time equivalents when calculating your benefits.

...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 the Member Services Team.

Pensionable service

Any continuous period in years and complete months during which you were a contributing member of the Horizon Plan up to 31 December 2007.

Continuing member

You are a continuing member if you were an active member of the Horizon Plan on 31 December 2007 when it closed as a result of the Company’s pension changes.

From 1 January 2008, you were no longer able to build up further pensionable service under the Horizon Plan. However, benefits built up until that date are protected and benefit from annual increases (known as enhanced revaluation) from 31 December 2007 until you retire.

You will remain a continuing member until you leave the Plan, take your benefits or die.

Former continuing member

A continuing member who left Siemens after 31 December 2007 or who voluntarily opted-out of continuing member status (to manage your Lifetime Allowance position for example).

Maximum limits

For the 2020/21 tax year, the earnings cap is £170,400 a year. It increases broadly in line with increases in the Retail Prices Index (RPI). Maximum Siemens Benefits Scheme limits apply only to your Plan benefits. You may have additional Siemens Pension Saving Plan benefits that exceed these limits.

Lifetime Allowance

Please go to the resources section to read more about this allowance here.

Annual Allowance

Please go to the resources section to read more about this allowance here.

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 the Member Services Team.

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.

Pre 1 January 2008 leaving date

The date, which falls before 1 January 2008, on which you ceased to be an active member of the Schroders Retirement Benefits Scheme or the Horizon Plan.

Final pensionable salary

Your basic annual contractual pay (excluding any variable payments received such as bonuses or overtime) 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 Horizon Plan up to 31 December 2007.

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.

Salary cap

An increase of 2% above the annual percentage increase in RPI for September in the preceding calendar year. For part years, the salary cap is calculated using the increase in the RPI from September of the preceding calendar year to the month falling 4 months before the month of the earlier of the leaving date or payment date. In addition, the 2% element of the salary cap is pro-rated by applying the formula (2/12)% x number of completed calendar months since the preceding 1 January.

Payment date

The earliest of the date you retire and draw a pension, die, transfer out benefits or reach normal retirement date.

Eligible child

Any child of the member (including a step-child or legally adopted child) who is under the age of 18 or, if in full-time education or vocational training, is under the age of 23, or was dependent on the member at the time of his/her death on account of physical or mental incapacity.