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Pensions

Group Personal Pension

Important note: You should always seek professional advice before taking out a pension plan or changing an existing pension arrangement.

The AXA Group Personal Pension is a collection of Personal Pension Plans arranged by an employer for their employees. It is designed on a group basis so that it is easier to administer. Each individual plan is designed to help an employee invest for their retirement.

Please also note that a stakeholder pension might meet an employee's needs as well as a personal pension.

A Group Personal Pension is set up by an employer, but the employee's plan belongs to the employee. This gives the employee control but also means the risks affect the employee directly. Amongst other things, their pension income will depend upon how much has been paid in, how the employee's investments perform and annuity rates at the time they take their benefits.

The money will be invested in funds that invest in different investments such as stock markets and property. The employee can
choose their own investment fund from a varied range.

Please remember that the value of investments can fall as well as rise and is not guaranteed. This means that an employee’s fund may be less than the amount invested.

  • Facts about the Group Personal Pension

Fact

Description

How much can an employee contribute?

An employee may contribute, and will normally receive tax relief on, an amount not exceeding 100% of their UK taxable earnings (or £3600 if their earnings are less than this). The minimum payment is £20 for both regular and one-off contributions.

What about employer contributions?

These are optional.

What are the benefits?

When an employee retires, the plan will provide them with a pension. They can choose, at retirement, whether to have a pension, or a tax free cash sum of up to 25% of their fund and a reduced pension (other options may be available. Their financial adviser can provide information). Different rules may apply to any benefits in respect of contracting out of state pension benefits.

When can an employee take out the plan?

The employee must be at least 18 years of age to take out the plan.

Pension age

Any age from 50 to 75. But the lower age is changing to 55 on 6 April 2010.

What are the tax benefits?

Tax relief on contributions up to the greater of 100% of the employee's relevant UK earnings which are chargeable to income tax and £3,600, less contributions paid into any other pension arrangement in that tax year. However the employee may become liable to a tax charge if contributions paid to all their pension arrangements are above the annual allowance (£245,000 for the tax year 2009/10).


When an employee takes benefits, up to 25% of their fund can usually be taken as a tax free cash sum. If the value of the benefits being taken is greater than the employee’s remaining lifetime allowance the excess may be subject to a tax charge. The standard lifetime allowance is £1,750,000 for the 2009/10 tax year increasing to £1,800,000 for the next 6 tax years.


Pensions are currently taxed through PAYE. Tax paid on the pension income will depend on the employee's income tax rate at the time the pension is paid.


These are the current rules but remember, all tax rules mentioned here could change in the future and their value depends on your individual circumstances. The tax information is based on our understanding of current tax legislation.

What are the charges?

The charges we make cover the cost of setting up the plan and any advice provided (unless the employer is paying a fee to their adviser). They also include the cost of administering the plan and professionally investing the money. We take a yearly management charge for the retirement fund and the standard amount is 1% of the value of the funds held with us. Some funds may incur additional costs and details of these may be found in the Pension Funds Guide.


Some funds may incur additional costs and these are reflected in the unit price. Please see the Pension Funds Guide for details of any additional charges.

Which funds can an employee invest in?

A wide range of funds managed by both AXA and other investment fund managers. The 'Where Do You Want To Be' booklet is designed to explain to retail customers how pension fund investments work. The list of funds AXA offers to Group Pension customers is shown in the 'Our Pension Funds' publication. This document also details any additional charges for (some) funds.