XPS Administration - IBM Pension Trust

Your IBM Retirement Options

Updated on 24 June 2021

We’re here to help – from telling you your current fund value to explaining your options at retirement in more detail.

You have built up your savings over many years and now it’s time to choose how to enjoy your benefits. Please note, if you opted to join the Standard Life PPP rather than the M Plan, you will need to contact Standard Life direct regarding this part of your benefit.

Your choices:

  • Take a full pension
  • Take a reduced pension plus tax-free cash
  • Transfer your pension benefits to another provider for more choices

Please note that the value of the benefit paid from your M Plan Retirement Account will depend on several factors including the amount of contributions you've paid, any cost of exercising any right to transfer the benefits, any charges payable, the age at which you access your benefit,the performance of investments and any cost of converting your benefit into an annuity.

 

Take a full pension

You can take the whole of your DB plan as a pension and convert any M Plan fund into an annuity, which will give you a guaranteed pension for life.

Take a reduced pension plus tax-free cash

You can take tax-free cash of up to 25% of the capital value of your IBM pension benefits. If you were a member of:

  • C, N or DSL plans – You can take the whole of your tax-free cash entitlement from your M Plan Retirement Account.

  • I Plan – The I Plan and M Plan benefits are treated separately. Your surplus M Plan fund after taking any cash will be used to purchase an annuity.

Transfer your pension benefits to another provider

When you transfer to another provider, you have more choice as to what you can do with your pension benefits. The choice includes taking flexible income (also known as ‘flexi-access drawdown’). With this option, you leave your pension benefits invested and take cash sums out whenever you wish. 25% of each sum is usually tax free and the rest is taxable.

The basis of the CETV calculation is reviewed and agreed by the Trustee in line with actuarial guidance and legislation. A copy of the method and assumption used in calculating CETVs for the Main Plan can be found here and the method and assumption used in calculating CETVs for the I Plan can be found here.

If you were a member of:

  • C, N or DSL plans - You can either transfer out all of your pension benefits together, or transfer out your defined benefit and money purchase funds separately.

    Any ASC/AVC fund you have can be transferred out independently but please note if you wish to do this both your DB (C,N,DSL) Plan and M Plan ASC/AVC fund must be transferred at the same time.
  • I Plan - The I Plan and M Plan benefits are treated separately so can be transferred independently of each other.

    Any ASC/AVC fund you have can also be transferred out independently.

The Trustee has a duty to ensure that transfers are made in accordance with the relevant legislation and regulatory requirements.  For the purpose of meeting this duty the Trustee has implemented a due diligence process which is designed to verify whether the necessary requirements have been met for the receiving scheme to be a valid destination for the Cash Equivalent Transfer Value (CETV).  

You need to be wary of transferring to schemes offering you loans, cash incentives or access to your funds before age 55 (except in cases of ill-heath).  These may constitute unauthorised payments and give rise to significant tax charges as a result. You can learn more about pension scams and liberation at this page. 

You can read more about the new flexibility under 'Pension freedoms'

For free and impartial advice, visit the Money Advice website.

 

We're here to help,
contact us when…

  • You have agreed your retirement with your line manager
  • You are considering accessing your retirement options
CONTACT US

Updated on 26 May 2021