The People's Pension - How the Scheme Works
How the scheme works - three simple steps
1. Contribute to your Retirement Savings
You contribute to your retirement savings each payday and in most cases so does Amey. Your contributions are normally deducted from your payslip using salary sacrifice, also known as salary exchange or SMART Pensions, which is a cost-effective way of making pension contributions. Those contributions normally attract Income Tax relief, but National Insurance would normally apply. Under SMART Pensions, instead of deducting a member pension contribution from your pay after National Insurance has been applied, you agree to a reduction in your gross pay with a corresponding increase in the pension contribution from Amey. The equivalent value of your member contribution plus Amey’s usual company contribution is paid into your retirement savings account as a single sum of money each pay period. By contributing in this way you don’t pay National Insurance on what would have been your pension contribution.
Note that we will not use SMART pensions if this means your pay falling below the National Living Wage or National Minimum Wage.
2. Invest your Retirement Savings
The People’s Pension will pay your savings into an individual member account for you. The money will be automatically invested in their default investment fund selection. You may select an alternative investment choice by logging into your People’s Pension account or contacting People’s Pension. You should regularly review your investment choice to make sure it is right for you.
3. Draw your Retirement Savings
By default, People’s Pension sets your normal retirement age under the Scheme as equal to your State Pension Age. If you intend retiring earlier or later, you should inform People’s Pension as soon as you can. You may withdraw some or all of your savings at any time from age 55 onwards, even if you continue to work for Amey or any other employer. The minimum pension age is due to rise to 57 from April 2028. Under current legislation you can take part or all of your savings as a cash sum with up to 25% tax free and the remainder taxable at your marginal rate. Alternatively, you may use your savings to provide a regular income or purchase a guaranteed lifetime income from an insurance company (this is called an annuity). People's Pension will explain all your retirement benefit options and help you to make the right choice for you.
Opting Out
If you are automatically enrolled, but you do not want to save towards your retirement, you can choose to stop your contributions.
Opt out within one month of enrolment: if you have been automatically enrolled but do not wish to be in the scheme then provided you give an opt out instruction to People’s Pension within one month of the date on your welcome letter from them, People’s Pension will instruct People Services to refund any contributions deducted from your pay (you should note that Amey is not permitted to accept your direct instruction and so you must opt out by following the instructions contained in that welcome letter and/or using The People’s Pension website or telephone service).
Cease contributions after more than one month of pension scheme membership: You can stop saving towards your pension at any time by contacting People Services. Amey will also stop paying any corresponding Company contribution. The money already paid into your pension account will continue to be invested, as HM Revenue & Customs rules do not normally allow a refund of your contributions under such circumstances.
Pension Transfer
You can arrange to transfer your existing pension plans from previous employers to your People’s Pension retirement savings account by contacting The People’s Pension Scheme after you have received your member booklet, or via your People’s Pension online account. If you are in any doubt about whether transferring is right for you, you may wish to speak to a financial adviser first. If you don’t have a financial adviser, you can find one at www.unbiased.co.uk.