What are my benefits in the OMPS Section?

The OMPS Section is a Defined Contribution Section of the Plan which you made contributions to. During your membership you accrued Guaranteed Minimum Pension (GMP) and/a Reference Scheme Test (RST) pension which is known as your safeguarded underpin.

These savings are invested with Aviva and have to provide your safeguarded underpin as a minimum at retirement.

What is a safeguarded underpin?

In simple terms, when a member takes retirement, or transfers, their money purchase pension fund, the value of the benefits payable from the safeguarded element(s) is compared to their fund value. The higher amount is paid.

Why does my money purchase fund have a safeguarded underpin?

A GMP is a minimum pension that a workplace pension scheme provides to people who were contracted out of the Additional State Pension from 6 April 1978 to 5 April 1997. The GMP you get from a workplace pension scheme is usually the same, or more than, the Additional State Pension you would have got if you had not been contracted out www.gov.uk/contracted-out. Similarly, pension benefits accrued after 6 April 1997 under a scheme contracted out under the ‘Reference Scheme Test’ (also known as section 9(2B) rights) must guarantee a minimum level of annual income, calculated by reference to salary. Such benefits are therefore safeguarded www.unbiased.co.uk/life/pensions-retirement/guaranteed-minimum-pension-GMP

Please contact Gallagher if you require further information regarding your safeguarded underpin.

When can I retire?

You may be able to take your benefits from the Plan when you reach age 55 (this will increase to 57 in 2028) subject to meeting statutory minimums. It is common to not be able to take this type of benefit until you reach your Normal Retirement Age.

What are my options at retirement?

At retirement you must use your OMPS savings to purchase an Annuity that covers any safeguarded underpin you have. Gallagher’s At-Retirement Service will help you to purchase an Annuity for the safeguarded underpin. If there are surplus funds after purchasing the Annuity, you can use this to take tax-free cash (to a maximum of 25% of your fund) or purchase additional Annuity on the open market. If there is a shortfall in funds required to purchase an Annuity for your safeguarded underpin, you will be unable to take early retirement from the Plan. When you reach your Normal Retirement Age, if there is still a shortfall in funds, the Trustees will top up your fund to allow the Annuity to be purchased or for the Plan to self-fund your safeguarded minimum pension. If you have additional funds after an Annuity is purchased - you can use these in exactly the same way as any DC fund - i.e. Drawdown or Annuity. You can find out more about these options here.

Alternatively, you can transfer your benefits out of the Plan to access additional flexibility.

Receive an Annuity

An Annuity for your safeguarded underpin is a regular income for life (a pension in other words) from a provider on the open market, that increases in value each year, paid on a regular basis, a bit like a salary.

The Pensions Regulator believes, for most members, it’s likely in their best financial interests to not transfer out of the Plan. However, it acknowledges, that the flexible options accessed by transferring out may better suit the financial interests of some members given their particular circumstances.

Transfer your pension away from the Plan

You can give up your pension in exchange for a pot of cash (called a transfer value). You’d need to use this to secure a retirement income, tailored to your needs, outside of the Plan.

Your transfer being treated as Defined Contribution or Defined Benefit will depend on the value of your OMPS fund and the Cash Equivalent Transfer Value (CETV) of your safeguarded underpin. If the CETV of your safeguarded underpin is higher than your OMPS fund, your transfer will be treated as Defined Benefit and, if the value is over £30,000, you cannot transfer out of the Plan without speaking to an Independent Financial Adviser (IFA).

You may be able to transfer some, or all, of your benefits out of the Plan to another pension arrangement and access the flexibilities available including Income Drawdown.

If you currently have funds in the Aviva DC section of the Dun & Bradstreet Plan or Additional Voluntary Contributions (AVCs) then transferring to this policy may be an option to give you the flexibility of options available under the DC section.

As we already have a structure in place with Aviva, there may be advantages in this option for you over a transfer to another provider. We suggest you discuss this with an authorised IFA.

You can find more information in the DC Section on the website.

You may think you won’t fall victim for a scam, but fraudsters have become increasingly sophisticated in their approaches, by producing professional looking brochures and websites promoting attractive but hoax offers.

In some cases, these fraudsters will target pension members offering the chance to convert pensions savings to an immediate cash sum before the minimum pension age (currently age 55 but rising to 57 from 6 April 2028). Using a transfer of your benefits to try and take them below age normal minimum pension age is usually against the law so that sort of an offer should ring alarm bells with you.

Please read the following information carefully to ensure you don’t let a scammer steal your pension.

Some of the key facts that apply to all of our pension savings include:

• The minimum age you can access your pension savings is currently age 55 (this will be 57 from 6 April 2028);
• All legitimate UK pension schemes must be registered with HMRC and there are checks in place for overseas pension schemes; and
• It is the law to seek financial advice if your transfer value is £30,000 or over.