XPS Administration - IBM Pension Trust

When Circumstances Change

Updated on 23 April 2021

Keep us up to date as your circumstances change.

You should let us know if you experience a change in your personal circumstances. This will enable us to ensure that your wishes are respected, as well as your pension.

This website doesn’t provide information for you if you’re new to saving for retirement with IBM. New savers join the IBM UK Personal Pension Plan (‘IBM UK PPP’). You are a member of the IBM UK Personal Pension Plan (‘IBM UK PPP’) if:

  • You’ve just joined IBM
  • You’ve been ‘auto-enrolled’ because you aren’t already a member of one of our old pension plans

Visit the IBM UK PPP website

If you are a current IBM employee you can change your address on the IBM application ‘About You’.

If you have left IBM's employment you can easily keep us informed of any changes to your bank or home address by contacting Pension Services, or visit MyPension to complete online.

You should review who you have nominated to receive any lump sum payable when you die regularly, it is important that this information is kept up to date. You can make any necessary updates by completing a new Beneficiary Nomination form. You can update your beneficiaries via MyPension, or, alternatively, please contact Pension Services who will send one to you.

The IBM Trustee has the final decision on who receives a benefit, but will always be guided by your recorded Beneficiary Nomination(s).

After your family home, your pension can be your biggest financial asset, especially if you are nearing retirement. Your pension benefits are now taken into account in divorce settlements and it can be a complex area. We have outlined below the three main options the courts offer, but we recommend that you take professional advice.

The courts will ‘earmark’ all or part of your pension (income and any lump sum) to be paid to your ex-spouse. These payments will start at the same time as you receive your pension. Payments will stop being paid to your ex-spouse when you die or if they re-marry.

The value of your pension can be ‘offset’ against other assets. For example, you may decide to keep your pension benefits in return for giving your ex-spouse a bigger share of the family home. You can only use this option if there are sufficient assets to offset your pension benefits against.

Pension sharing
With pension sharing, the Cash Equivalent Transfer Value (CETV) of the member's pension rights is split between both parties. The courts will decide the split. You will receive a reduced pension and provide your ex-spouse with a sum of money which they can add to their existing pension or, if they don’t have one, they will have to set up a new pension arrangement.

Pension sharing applies to all of your pension benefits – those with IBM, as well as any other schemes you have – but excludes the Basic State Pension.

Please refer to our Divorce Factsheet for further information.

Depending on the pension plan you are in, there may be a pension payable to your children if you die.

If you can no longer work because of ill health, you may be able to retire before your minimum retirement age. The Company Doctor, taking account of your GP’s medical reports and with advice from consultants, will decide if ill-health early retirement is appropriate.

If you have to have time away from work, there may be an effect on your pension contributions, and in turn how your pension savings build up during your absence.

Type of leave of absence Will I continue to participate in Smart*Pensions? Note
Illness or injury Yes If your salary falls below the Company’s SPL*, you may have the option to continue, provided this does not cause your salary to fall below LEL** or to temporarily stop being a member.
Maternity or adoption leave Yes As above unless you selected the Pension Suspension Option^ in You*.
Paternity leave Yes N/A
Paid leave of absence Yes As above but the Company credits are based on your actual pensionable salary.
Unpaid leave of absence No Your credits and those on behalf of the Company will stop.
Full IBM assignment abroad Yes You will cease to participate in You* and you won’t be able to continue paying ASCs. You will still be able to pay AVCs.
Accompanying an IBM employee on an assignment abroad/ secondment from IBM No If you stop receiving a salary you will no longer participate in Smart* Pensions.

^Pension Suspension Option
If you elect to have this option, you are able to suspend your contributions to the M Plan for the duration of the You* scheme year and still remain a member. The funding can be either used to elect other benefits in You*or taken as a monthly cash alternative. This is only available to employees that elected Pension Suspension in the 2012/2013 You* enrolment period.

*SPL – Salary Protection Limit
If taking part in Smart* Pensions would cause your salary to fall before the Company’s SPL, you may have the option to temporarily stop participating in Smart* Pensions.

**LEL – Lower Earnings Level
The level of earnings above which National Insurance (NI) deductions are payable.

***Notional Pensionable Salary
Basic annual salary or reference salary if you are paid on commission, payable to you immediately before the start of any approved temporary absence.

If you are a member of the M Plan (not Enhanced M or Hybrid Deferred), you can ask the Trustee about transferring these benefits into your Retirement Account. Some transfer payments cannot be accepted in part or in total. Once you have at least three months’ Pensionable Service, you should complete a ‘Request to transfer-in’ form. Pension Services will then look at the details and let you know which elements, if any, can be accepted. If the transfer is made, your benefits will be invested in line with your existing investment instructions, unless you tell Pension Services otherwise.

Please contact Pension Services for more information.

Assuming you have at least two years’ qualifying service, your options are

  • Leave your pension with us until you retire
  • If you are at retirement age you can take your pension
  • Transfer your pension benefit to another registered pension provider

If you leave your pension with IBM, you won’t be able to make any further contributions but you will still be able to make changes to your investment choices, if applicable.

Depending on your pension plan, there are options available to you for late retirement. Please contact us for further details.

The following benefits may be payable:

  • Group Life Assurance – The core level is two times your Pre You* salary (restricted to the M and I Plan Cap). If you have chosen a further two times as part of your annual You*, this higher amount will be payable.
  • Additional Lump Sum -  A cash lump sum equal to your ASC/AVC fund will also be payable, where applicable.
  • Spouse/Civil partner’s pension – Your spouse/civil partner maybe eligible to receive a pension. This is calculated as a percentage of pensionable salary for all complete years and months of your pensionable service and prospective service to your normal retirement age.
  • Dependant(s) pension – If there is no spouse’s pension to be paid, the Trustee may, at its discretion, pay a pension equal to the spouse’s pension to any of your dependant(s).
  • Child’s pension – Your children may also be eligible for a pension. The child’s pension is one third of the amount of the spouse’s and can be paid to a maximum of three of your children. If there is no pension payable to a spouse or dependant, any children’s pensions will be doubled.

You should keep your nominations up to date via MyPension to ensure your wishes are known to the Trustees.

Internal Procedure
If you feel there is a problem or misunderstanding with any aspect of your pension, the Trustee has set up an Internal Dispute Resolution (IDR) procedure for you to follow. This ensures high standards of practice from the Trust and peace of mind for members. You can follow this process if you are a current member, already retired or a dependant of someone who was in the Plan. If you are within six months of being in one of these groups, you can still follow the process.

The internal procedure runs in three phases.  In the Preliminary Stage, you should discuss your problem with IBM Pension Services.  However, if your problem concerns Company policy, you are advised to contact Human Resources.

If, after discussion with Pension Services or HR, you are still dissatisfied, you should complete a Stage 1 Dispute Form (available from Pension Services) - this formally recognises your dispute to the Pensions Trust Manager.  You (and/or your representative) will receive a letter from the Pensions Trust Manager detailing his decision about your dispute within two calendar months of receiving your letter and references to any legislation or Plan rule that has been relied upon will be included.  The letter will also provide you with details of your rights under Stage 2.

If for any reason your problem can't be decided within two months, the Pensions trust Manager will write to you (and/or any representative) explaining the reason(s) for the delay and include a date when you can expect a decision.

If you are dissatisfied with the Pensions Trust Manager's decision, or the Trustee's action following it, you may write to the Trustee within six months of receiving the decision to ask for it to be reconsidered.

You should complete the Stage 2 Dispute Form (available from Pension Services) and forward it to the Trustee via Pension Services at the address at the end of the form.

Within two calendar months of receiving your letter, the Trustee will write to you (and/or any representative) advising you of its decision.  The Trustee will also advise to what extent their decision confirms, or replaces, the decision of the Pensions Trust Manager.  The Trustee's decision will also include references to any legislation or Plan rule that has been relied upon, as well as providing you with details of your rights to resort to external resolution.

If for any reason the Trustee can't reach a conclusion within two months, the Trustee will write to you (and/or any representative) explaining the reason(s) for the delay and include a date when you can expect a decision.

External Procedure

 The Pensions Ombudsman (PO) can investigate and decide complaints or disputes about the way any pension plan, including the IBM pension plans, is run.  Complainants can approach the PO for dispute resolution regardless of whether the internal dispute resolution procedures have already been followed.

The Pensions Ombudsman
10 South Colonnade
Canary Wharf E14 4PU
Telephone: 0800 917 4487

You can transfer your benefits overseas providing the receiving scheme is a Qualifying Recognised Overseas Pension Scheme (QROPS). This means the scheme must meet certain conditions and be approved by UK HMRC

Transfers to a QROPS may be subject to an overseas tax charge of 25% of the transfer value.

The transfer will be tax-free if one of the following applies:

  • You are resident in the country where the QROPS receiving the transfer is based.
  • You are resident in a country in the European Economic Area (EEA) and the QROPS you are transferring to is based in another EEA country.
  • The QROPS you are transferring to is an occupational pension scheme and you are an employee of a sponsoring employer under the scheme.
  • The QROPS you are transferring to is an overseas public service scheme and you are employed by an employer that participates in that scheme.
  • The QROPS you are transferring to is a pension scheme of an international organisation and you are employed by that international organisation.

Resident means resident for tax purposes. If you are resident in more than one country in the tax-year it will need to be established which country should be used.

At the time of payment, the QROPS will need to be on the UK HMRC ROPS notification list: www.gov.uk/government/publications/list-of-qualifying-recognised-overseas-pension-schemes-qrops

All EU countries are included in the EEA (including Malta, Gibraltar, and the Channel Islands) plus Norway, Liechtenstein and Iceland (Switzerland is not in the EEA).

 If none of the above apply, then tax at 25% will be charged.

If your benefits are in excess of the Lifetime Allowance (LTA) (£1 million unless you have a higher ‘protected’ amount) 25% tax will be deducted on the excess over the LTA. The balance will then be subject to a further 25% overseas tax charge tax (where applicable).

CAF Give As You Earn is the easy way to support the causes you care about.

You can donate to a specific charity of your choice, or, if you like the idea of giving regularly through your pay but don't have a particular cause that you support, choose a CAF Charity Account and save your donations until the time is right.

Click here for more information.

If you need advice when something changes, you should seek independent financial advice. Find out more about choosing a financial adviser on the Money Advice Service website (now part of The Money and Pension Service).

Updated on 23 April 2021