15/08/2011
The NDA as sponsoring employer have requested a merger of the GPS and CNPP in order to achieve cost saving benefits in the administration of the schemes, whilst maintaining the status quo for the GPS members' benefits and protections. The purpose of this communication is to explain to the GPS scheme membership the role and position of the Trustee of the GPS regarding the NDA proposal
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Notes for Shiftworkers
As a member of the GPS Group Pension Scheme your pension will be based on your best year of pensionable pay during your last three years before retirement. You pay contributions on your pensionable pay throughout your service.
Your shift pay is also pensionable but because there is no guarantee that you will still be on shifts during your last three years before retirement, it is not pensionable in the same way as your basic pay. Your shift pay is pensioned under a money purchase scheme linked to the GPS Group Pension Scheme and known as the Group Shift Pay Pension Plan.
How it works
The plan is administered by the Prudential, with the provision of financial advice provided by approved local Financial Advisers.
While an employee is on shifts, both the employee and the employer pay contributions on pensionable shift pay, into the plan. If an employee comes off shifts, contributions may continue for as long as there is any pensionable shift pay. Once all pensionable shift pay ceases, so do all contributions.
However, even when contributions have ceased, the fund still attracts investment returns and bonuses and therefore guarantees a return for the contributions at retirement.
All money paid into the plan is invested and builds up into an individual fund for each shiftworker. At retirement, if Inland Revenue limits permit, some of the fund may be taken as tax-free cash with the remainder being used to buy a pension (annuity).
Contributions
Employees and their employer normally pay into the Group Shift Plan at the same rate as into the GPS Group Pension Scheme. For employees the normal contribution rate is 5%.
However, all employees may choose to pay a higher percentage of their pensionable shift pay into the Shift Plan upto a maximum amount of 100% as long as the contributions remain within revenue limits. The rate chosen remains in force throughout the financial year, but can be changed once a year in January/February, with the change taking effect in April.
© GPS Pension Scheme 2009.