Legacy Plan

How are your benefits calculated?

Broadly your benefits from the Previous Scheme are revalued to the date they come into payment as described in the separate sections below and you have the option of taking some of those benefits as a cash sum – also described below.

You can elect to sacrifice some of your pension in order to increase spouse, dependant or eligible child pensions on your death. Further details are available from the Member Services Team.

If you are a former SMT member the whole of your pension is described as Special Period Pension and is subject to the additional revaluation rules described in that section.

If you are a former SBT member or former PFP member, some of your pension may be Special Period Pension. If you need to know if this applies to you please contact the Member Services Team.

If you are a former VAI member the Special Period Pension rules do not apply to you.

How are your benefits revalued?

Your benefits at 31 December 2007 or your pre I 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. 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 65)

» 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.

Special Period Pension

The pensions of former SMT members and part of the pensions of some former SBT members and some former PFP members are described as Special Period Pensions. Such pensions are not reduced if they are taken after age 60 and any reductions which apply to such pensions drawn before age 60 are calculated by reference to age 60 rather than age 65.

In addition, if you draw your pension after age 60, revaluation from age 60 to the earlier of the date you draw your pension or age 65 will be the most favourable of:

If you are a continuing member:

• enhanced revaluation
• enhanced revaluation to age 60 then the better of enhanced revaluation or an increase determined by the Trustees on actuarial advice in respect of the period after age 60
• statutory-type revaluation to age 60 then an increase determined by the Trustees on actuarial advice in respect of the period after age 60
• statutory revaluation

If you are a deferred member or a former continuing member whose leaving date was before age 60:

• statutory-type revaluation from your leaving date to age 60 then an increase determined by the Trustees on actuarial advice in respect of the period after age 60
• statutory revaluation

If you are a former continuing member whose leaving date was after age 60:

• as for continuing members in respect of the period up to your leaving date plus the better of statutory revaluation or an increase determined by the Trustees on actuarial advice in respect of the period after your leaving date
• statutory revaluation

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 your 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 and/or Additional Voluntary Contributions account (if applicable). This means that the amount of your Legacy 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 Legacy Plan pension.

Drawing your pension – overview

Retirement means different things to different people. Some may want to retire early, while others may choose to work past age 65 and postpone taking their benefits, so the Plan gives you a number of options.

You can:

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

Your pension will be paid monthly from the first working day of the month after your retirement.

You have the following options at retirement:

Early Retirement

You can retire from age 55 (increasing to 57 in 2028). You will need the consent of the Trustees (and the Company if you are a continuing member) if you are below the age shown in the table below (Permission Age). Also shown in the table is the age beyond which you can draw a pension which is not reduced because you are retiring early (Reduction Age). If you draw your pension at an earlier age it will be reduced by factors which are set by the Trustees on advice from the scheme actuary and which are subject to change.

However, any part of your pension which is Special Period Pension is governed by the rules described in that section.

* continuing members only

You are a VAI Senior Member if that was your classification in the VAI Scheme.

You are an SMT Long Service Member if you were not part of the Landis and Gyr group, were in service before 1 October 1994 and give 4 months notice of your intention to draw your benefits.

*If your Previous Scheme was the PFP:

• Early retirement reductions will only apply for pension built up before 25 May 2001 if retiring before age 62, (no late retirement additions will be applicable if retiring between age 62 and 65);
• Early retirement reductions will only apply for pension built up after 25 May 2001 if retiring before age 65; and
• a 4.8% uplift is applied to all pension built up in the PFP.

Normal Retirement

Your normal retirement date is your 65th birthday.

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, 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 will 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.

If you die before you draw your pension

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 Legacy 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 Legacy 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.

If your Previous Scheme was the PFP your AVC Fund will be paid but will be subject to a top up payment calculated as the positive difference (if any) between the:

• Contributions made to the AVC Fund with interest (in line with Bank of England interest rate) up to the date of merger; and
• The value of the AVC Fund as at the date of merger.

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 your Previous Scheme was the PFP, and if you are a Continuing member and die before your draw your pension, the spouse’s pension is 25% of the member’s Pensionable Salary at your date of 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 based on the spouse's pension will be paid for each of your elegible children as follows.

If there are more than 3 children the pensions for 3 children will be divided equally between all 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.

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 will be paid. For information on the cash sum paid if you retire later and die after age 75, please contact the Member Services Team.

Spouse’s 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.

However, if part of the pension you were receiving when you died arose from AVCs, the spouse's pension in respect of that part of your pension may be greater or less than 50% depending on what options you exercised when your pension started.

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 each of your eligable children as follows.

If there are more than 3 children the pensions for 3 children will be divided equally between all 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 24 or who are dependent on you because of disability

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

Your Legacy 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. If RPI does not increase, your pension will remain at the same level (it will not decrease).

In general, the increase is limited to 5% but other rules may apply depending on your Previous Scheme and the pension arising from some periods of service.

• If you were an SBT member who is not a former Landis and Gyr member or a Baxi member, there is no automatic increase in respect of service prior to 6 April 1997.
• If you were an SMT member, the increase in respect of service prior to 6 April 1997 and service after 5 April 2006 is limited to 3%.
• If you were a VAI member then the increase in respect of service prior to 6 April 2002 will not be less than 3%.

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.

Previous Scheme

The Siemens Magnet Technology Pension Scheme (SMT), or the Siemens Building Technologies Retirement Benefits Scheme (SBT), or the VAIT Industries (UK) Limited Pension Scheme (VAI) or the Siemens Fire, Safety and Security (PFP) Pension Scheme.

Pensionable service

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

Continuing member

You are a continuing member if you were an active member of the Previous Scheme on 31 December 2007 when it closed as a result of the Company’s pension changes, have remained in Siemens employment and have not drawn any benefits.

From 1 January 2008, you were no longer able to build up further pensionable service under the Previous Scheme. 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, draw your benefits or die.

Former continuing member

A continuing member who left Siemens after 31 December 2007.

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). 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 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.

Eligible child

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

Final pensionable salary

This is relevant only to the application of Enhanced Revaluation. If your Previous Scheme was VAI, Final Pensionable Salary at any date shall mean the higher of:

• Pensionable Salary earned over the previous 12 months
• The best annual average of Pensionable Salary for any two consecutive twelve month periods ending on 5 April in the ten years before the relevant date.

Otherwise your Final Pensionable Salary at any date means the average annual figure produced from your Pensionable Salary in any continuous period of 36 months of pensionable service in the 10 years preceding the relevant 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.

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 amount of pension that you will receive if you built up pensionable service between 6 April 1978 and 5 April 1997.

Pensionable salary

This is relevant only to calculating Final Pensionable Salary for the purpose of applying Enhanced Revaluation. If your service in the Previous Scheme started in June 1989 or later, the calculations described are subject to the Earnings Cap.

If your Previous Scheme was SMT, your Pensionable Salary means the total amount of basic salary plus shift premium, overtime and bonus payments (if any) you received from the Company in the previous twelve months prior to 31 December capped at 150% of basic salary received over the same period. The calculated figure will be assumed to have been paid in equal monthly amounts over the 12 months prior to the 31 December calculation date. If your Pensionable Salary is calculated at any other date than 31 December, Pensionable Salary between 1 January and the relevant date will not be capped. Otherwise your Pensionable Salary means, total basic contractual annual salary or wages.

If your Previous Scheme was PFP, your Pensionable Salary is the annual basic salary plus the average of any commission received during the previous three years (or a shorter period where commission was received).