Your retirement options

When you retire and come to claim your deferred benefits, you will be entitled to:

• an annual pension, and
• a one-off, tax-free, lump sum

These are based on your Final Salary and CARE elements.

You can typically claim your deferred benefits at your Normal Pension Age (NPA). 

• If you joined the industry on or after 1 April 1988, your Normal Pension Age is 63.
• If you joined the Scheme before 1 April 1988, your Normal Pension Age is 60.

You can choose to put your benefits into payment before your NPA but if you do these will be reduced for early payments – please select early retirement minimum age below to find out more.

You can find out more about your NPA and how your annual pension and one-off lump sum are calculated in your member booklet.

The booklet also includes further details about all of the additional options outlined below.

You may be able to exchange part of your pension for an additional lump sum. You can see the conversion factors below:

Magnox ESPS - factors.

This would be paid in addition to the lump sum you get when you retire (as outlined above).

The maximum lump sum you can take tax-free from all your pension arrangements is currently £268,275. This figure may be different for members with Lifetime Allowance protections.

Certain restrictions apply if you decide to take this option so be sure to check your member booklet for more information. You should also check the lump sum allowance details on the tax allowances page.

If you want to take an additional lump sum at retirement, you need to let Railpen know at least 2 months before you start receiving your pension. See the taking your benefits page for more information on the application process.

You may be able to exchange/convert all, or part, of your Final Salary lump sum, for additional pension. 

This option is available on request from the Scheme administrator, Railpen.

You must give notice in writing during the month before retirement if you wish to take this option. Please see the taking your benefits page for more information on the application process.

Find out more in your member booklet.

If the value of your Scheme benefits is £30,000 or less, you can ask to take it all as a lump sum, if that would work better for you in retirement.

If you take this option, your entitlement to benefits under the Scheme will stop and no death benefits will be payable if you die.

The value of your Scheme benefit is your pension plus the pension equivalent of your 3x annual pension lump sum.

You may be able to exchange part of your pension to provide additional pension for your spouse, or to provide a pension for any other dependant when you die. The person named as your dependant can be:

• your spouse
• a child, or
• any other person who was completely, or partly, financially dependent on you immediately before your death (this is at the Trustee’s discretion)
  

If your dependant is a child, they will not receive a dependant’s pension until they are 18 years old, unless they have a permanent disability.

You must give notice in writing during the month before retirement if you wish to take this option. See the taking your benefits page for details on the retirement process. 

If you paid Additional Voluntary Contributions (AVCs) while you were an active member you have a number of options regarding when, to take them. For example, you can:

• take your AVCs at the same time as your other pension benefits
• delay taking your AVCs until after you’ve already retired (up to your 75^th birthday)
• transfer your AVCs to another pension provider (this option is only available if you have left the Scheme)

You may also decide to use your AVCs in a number of different way. For example, you can use some, or all of your AVCs to:

• increase your tax-free lump sum (subject to HMRC limits) 
• get a taxed lump sum (subject to tax allowances) 

• increase your pension - either within the Scheme (this option is only available to members who started paying AVCs before 6 April 2006) or by buying a pension (annuity) with another provider on the open market

There are a number of restrictions that apply. For example, if you wish to use your AVCs as an additional tax-free lump sum, the Rules first require a mandatory amount of CARE Pension to be given up for the tax-free lump sum. This is equivalent to the default lump sum you would have built up in the Scheme had CARE not been introduced. You can find out more about the steps used to calculate your tax-free lump sum in your member booklet.

You can find out more about taking your AVCs in the AVC guide linked below:

Magnox AVCs Guide

You may be able to start taking your pension while continuing to work. However, your employer’s consent may be required.

For more information on this option, please check with your employer. For members employed by NRS please refer to the Flexible Working Standard available on the intranet.

You may be able to claim your deferred Scheme benefits early if you are suffering from ill-health. This means that you are no longer able to carry out any work that the Company may reasonably offer you (taking into account your previous job role).

You will need to meet specific criteria to qualify for ill-health retirement, and your status will need to be confirmed by the Company’s appointed medical adviser.

You can find more details about this and how your pension and lump sum will be calculated in your member booklet or on the changes in circumstances page.

The earliest age that you can usually access your pension and is set by the government and is known as the Normal Minimum Pension Age (NMPA). This is currently age 55, though this is rising to age 57 from 6 April 2028. This change will not affect your ability to take your pension earlier than these ages due to ill health, or if you qualified for an earlier Protected Pension Age (PPA).

PPAs essentially protect rights for individuals who had the right to take their benefits prior to NMPA before it increased.  Which PPA may apply to you depends on the Magnox Group’s rules, your own circumstances, when you joined the scheme, whether you are a “Protected Person” under the Electricity and Energy Acts and under which type of early retirement you may access your pension.

The below table summarised the Magnox Group’s current NMPA and PPA, how it will change from 6 April 2028 and whether any PPAs apply:

Early retirement

You can start receiving your deferred benefits before your NPA. The earliest age will depend on how you left the Scheme as shown in the above table. If you decide to start receiving your pension before your NPA, it will be reduced for early payment unless you left under redundancy with a right to an unreduced pension. See the current early reduction factors for more information.

There are 2 types of early retirement. In both cases you may be able to take your deferred benefits before Normal Pension Age (NPA). These are:

• Compulsory early retirement
• Voluntary or flexible early retirement

If you joined the industry on or after 1 April 1988, your Normal Pension Age (NPA) is 63. You can take your pension any time from age 60. If you voluntarily decide to claim it earlier than your NPA, it will be reduced to reflect this.

For male members who joined the Scheme before 1 April 1988 and left service on or after 17 May 1990, your Normal Pension Age is 60. Any benefits you earned before 17 May 1990 will be reduced to take into account the fact that they were originally payable from age 63 and are therefore being paid three years early. If you defer taking your benefits until the age of 63, an enhancement will be applied to benefits earned after 17 May 1990 to reflect late payment.

If you have protected status and left the Scheme due to redundancy or reorganisation, you will be able to take your deferred benefits at age 50 unless you waive this right when you leave.

If you don’t have protected status and left the Scheme due to redundancy or reorganisation, you will be able to take your deferred benefits at age 55 unless you waive this right when you left but discounting will be applied for early payment.

You can find more information in your member booklet or by contacting the Scheme Administrator, Railpen.