About the Fund

How does the Fund work?

The Fund is what is usually referred to as a Defined Benefit (DB) pension scheme. You may also hear it being referred to as a final salary pension scheme.

With a DB scheme like the Fund, the amount you are paid in retirement is based on the amount of time you've been an active member of the Fund, your Final Pensionable Salary and the build-up rate (which is shown in the notes page of your pension statement). The benefits you receive at retirement are not based on how much you put into an individual account or how investments perform (like a Defined Contribution or money purchase pension scheme).

Abbott pays however much is calculated to be required for there to be enough money available to pay members' benefits. The Trustee of the Fund is responsible for the investment of the Fund.

A DB pension is a valuable benefit as it provides you with a secure income for life when you retire.

You can find out more about how DB pension schemes work from MoneyHelper. For more specific information about the Fund, you can visit our documents page. On this page you can read our members' guide and members' guide supplements.

If you make AVCs, these work a little differently. Your contributions go into an individual account, are invested and their final value when you take them depends on how much you pay into your AVC account and how your investments perform. You can find out more about how AVCs work in the AVCs section.

Do you have pension savings in another scheme?

You may have pension savings in another scheme (with a past employer, for example). If you do, it's important to remember that other pension schemes may work differently to the Fund.

If you've lost track of an old pension, you can finding it using the Government's pension tracing tool or by using the Pension Tracing Service. Don't forget to take into account any other retirement savings you have – including the State Pension – when planning for your retirement.

What are my retirement options?

As the Fund is a DB scheme, the benefits you've built up in it will provide you with a pension (an income for life) when you retire. You have a number of options open to you when it comes to what kind of pension you'd like to take and you can also choose to take up to 25% of your benefits as a lump sum (this is tax-free under current legislation).

You can find more information about the different types of pension you can take on page 10 of our Pension Retirement Guide.

How does taking a cash sum affect my pension?

If you've made AVCs into the Fund, you can normally use these to provide any cash sum you want to take. If you have any AVCs left over after taking cash, they will be used to buy additional pension from an insurance company (this is called an annuity). If you don't want to use your remaining AVCs to purchase an annuity, you can take your AVCs in other ways by exercising 'freedom and choice'.

If you haven't made AVCs, or if your AVCs aren't enough to provide the entire cash sum you want, your yearly income from the Fund will be reduced to provide the amount of cash sum required. This will also happen if you don't want to use your AVCs for cash. The scale of the reduction will depend on how much cash you want and the factors used to exchange pension for a cash sum at retirement.

When do I have to decide if I want a cash sum?

It's up to you whether you want to take a cash sum and how much. You don't have to make that decision until just before you take your benefits from the Fund.

We suggest you give us ten weeks' notice of your intended retirement date so there's plenty of time for the scheme administrator to prepare and send you quotations of your options and for you to consider them.

Taking your AVCs at retirement

As your AVC account works a little differently to your main Fund with Abbott, you can use them in different ways at retirement.

Find out more about the different ways you can use your Fund AVCs on page 11 of our Pension Retirement Guide.

How you use your AVCs will depend on your retirement plans and the amount of retirement savings you have elsewhere. Depending on how you'd like to use your AVCs, you may have to transfer your benefits out of the Fund at retirement and into another arrangement which will allow you to use them more flexibly.

You can find out more about the different ways you could use your AVCs on the MoneyHelper website or by reading our More about: Freedom and Choice with your AVC fund Information guide.

The benefits you have in the Fund are valuable and we would always recommend that you get financial advice before making any decisions that might affect them - especially if you're considering transferring them out of the Fund. For advice on transferring out, you can find an Independent Financial Adviser (IFA) on the MoneyHelper website.

My pension statement

Once a year, we'll send you a pension statement from the Fund. This will usually arrive between August and September.

What's in my pension statement?

The main purpose of your pension statement is to let you know what benefits you’re on track to receive from the Fund when you retire.

In your statement you'll find:

• An estimate of how much pension you could receive from the Fund based on your Final Pensionable Earnings and length of service.
• Details of any death benefits you're entitled to.
• A Statutory Money Purchase Illustration (SMPI) if you have an AVC account.

Your pension statement will only take into account your current period of service. Any benefits from previous periods of service will be paid in addition to those shown in your statement.

Does my statement take my shift pay into account?

If you're a shift worker, your Final Pensionable Earnings exclude your shift premium, and the pension benefits you build up from shift pay are assessed separately. The pension estimates shown in your statement are adjusted to take into account the shift pattern worked (for post-1 March 1997 service), where applicable, and assume you will work the same shift pattern until you retire.

Contact us if you'd like a copy of the notes that accompany your latest pension statement.

You can find more detailed guides on how your benefits build up, the tax allowances applied in your statement, your SMPI (if you have an AVCs account) and more in our documents section.