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 were an active member of the Fund, your Final Pensionable Salary and the build-up rate. 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 contributes however much is calculated to be required for the Fund to have enough money 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 definite level of 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 member guide and member guide supplements.

If you made AVCs while you were an active member of the Fund, these work a little differently. Your contributions went into an individual account where they remain invested. Their final value when you take them depends on how much you paid into your AVC account and how your investments perform until you access your AVCs. You can find out more about how AVCs work in the AVCs section.

Have you lost track of pension savings in another scheme?

If you've lost track of an old pension, you can find it using the Government's free Pension Tracing Service. Don't forget to take into account the State Pension when planning for your retirement.

Find out how much State Pension you could get

What are my retirement options?

As the Fund is a DB scheme, the benefits you 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 made Additional Voluntary Contributions (AVCs), while you were an active member of the Fund, we will normally use these to provide any cash sum you want to take. If you have any AVCs left over after taking cash, they can be used to buy additional pension from an insurance company (this is called an annuity). If you don't want to purchase an annuity, you can take your AVCs in other ways by exercising freedom and choice.

If you didn't make 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 the date you intend to start accessing your Fund benefits 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 when you decide to access your Fund benefits 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 MoneyHelper 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 Money Helper.