Who is this information relevant to?

The information on this webpage is only relevant for employees who are members of the Seventh-day Adventist Retirement Plan (the Plan). These employees’ benefits in the Plan retain a link to their current salary following previous changes to the Plan carried out in 2013.

Impacted employees will have been sent a letter dated 17 January 2025 containing more information about the proposals.

The latest Q&A document can be found HERE.

What changes are being proposed?

The Trustees of the Seventh-day Adventist Retirement Plan (the Plan) and the British Union Conference of Seventh-day Adventists (the BUC or we) have been working together to consider whether to secure all benefits in the Plan with an insurance company (also known as a ‘buy-in’). This would give your benefits greater long-term protection and security.

As an initial step (and before buy-in can occur) the BUC is proposing to amend your Plan benefits so they are no longer linked to your salary from 30 June 2025. This includes any suspended obligations you have built up from service in the ‘Old Scheme’.

This is dependent on the outcome of a statutory 60-day consultation employee consultation process (the Consultation Process).

Why is the BUC making this proposal?

Following proposals by the BUC Executive Committee, on the back of consultations between all the participating employers, the Trustees and the BUC have, since 2013 taken significant steps to improve the Plan’s funding level and ensure there is sufficient money in the Plan to meet the costs of your future benefits. These include closing the Plan to new members and future accrual from 2013, as well as the employers paying significant contributions into the Plan in the past.

Taken together these actions have significantly improved the Plan’s financial position, with the BUC and the Trustees working closely together. The BUC has now requested the Trustees take the next, and potentially final, step on this journey which would be to transact with an insurer, known as a buy-in, to further de-risk the Plan and provide security for your benefits for the future.

Initial investigations into this next step has confirmed the current link between your Plan pension and your salary is not a benefit that can be insured. Having carefully reviewed all the options available to address this issue, and taken professional advice, the BUC has concluded the best way to proceed for the benefit of all stakeholders of the Plan is to get employed members’ agreement to break the link to salary.

How will the proposal affect me?

The proposal is for your employer to seek your individual consent to amend your pension in the Plan as follows:

1. To become a standard deferred member of the Plan on and from 30 June 2025. The main impact of this would be to remove the link to your current salary from 30 June 2025, meaning your pension would no longer reflect any changes in salary after this date. It would instead benefit from inflationary increases from 30 June 2025 as required under the Plan’s Rules (subject to a cap).

   You’d continue to be entitled to receive your pension calculated when the Plan closed to future benefit accrual in 2013 increased in line with inflation (subject to a cap under the Rules) if that is higher. 

2. In recognition of the potential for your pension to be lower at retirement, in return for consenting to the change above you’d receive an additional employer contribution of 2.5% of salary into the existing Defined Contribution (DC) pension arrangement for a period of three years from 1 July 2025.

   As a reminder, the current level of employer contributions you receive into the DC Scheme with Legal & General is 15%. Under the proposal this will increase to 17.5% for a period of three years from 1 July 2025.

   If you were to stop being employed by us, through retirement or otherwise, these contributions, along with all others, would stop.

3. Some members have also built up a pension promise in the ‘Old Scheme’ in relation to service before 6 April 1998, which is generally referred to as your ‘suspended obligations’. Currently, these benefits are brought into the Plan when you retire so your Plan pension and suspended obligations in the Old Scheme are paid to you together from the Plan. These suspended obligations are linked to your salary and the proposal is that these would also cease to be linked to your current salary from 30 June 2025. This would mean the pension due from your suspended obligations would no longer reflect any changes in salary after this date. It would instead benefit from inflationary increases from 30 June 2025 (subject to a cap).

   You’d also continue to be entitled to receive your pension derived from the suspended obligations (calculated when the Plan closed to future benefit accrual in 2013) increased in line with inflation (subject to a cap under the Rules) if that was higher.

To help you understand how the proposal could affect you, you’ve been provided with a personalised illustration in the letter your employer sent to you dated 17 January 2025.

What isn’t changing as part of the proposal?

Employees benefit from a death in service lump sum group life assurance policy. This will continue to be provided to you and won’t be affected by the proposals.

Benefits under the DC Scheme won’t change, however as mentioned above if the proposal goes ahead, you’ll receive an additional employer contribution of 2.5% of salary, paid monthly, for a period of three years from 1 July 2025.

What’s happening next?

What do I need to do?

You’ll have 60 days from the 20 January 2025 to consider our proposal. If you’re happy with the proposed changes, you don’t need to do anything at this stage. If you’ve got any questions or comments about the proposed changes to the Plan, please contact secretariat@adventist.uk

I didn’t receive a consultation letter and personalised illustration – how do I get one?

You would only have received the letter if you are an employee affected by the changes. If you believe you are affected and did not receive a letter please contact secretariat@adventist.uk who will arrange to have another copy sent to you.

 What else do I need to know about the proposal?

Please refer to the Q&A Page (Click to view) for all the latest questions and answers. Below we have set out questions and answers about how the proposals would directly affect your benefits in the Plan.

Will I still keep my DB benefits in the Plan?

Yes, if the proposal goes ahead you will still keep the benefits you’ve built up in the DB Plan and you’ll be entitled to receive a pension income on your retirement. However, you will lose the link to your salary as explained in the question ‘Why is the BUC making this proposal?’

In return for agreeing to this you’ll receive an additional 2.5% of salary into the DC Scheme for three years.

There’ll also be some areas where your DB benefits from the Plan will be enhanced in certain circumstances – see:

• What happens if I had a right to an unreduced pension from age 62 after 35 years of service?;

• What if I retire in ill-health?; and

• If the proposal goes ahead, will I still have a cash sum death in service benefit?

Is there a difference between the salary definition used for the Plan and those used to calculate contributions payable into the DC Scheme?

Yes, there are different salary definitions and the salary figure used to calculate your DB pension in the Plan is not the same salary figure used to calculate your DC contributions.

In the Plan, your benefits at the earlier of retirement, leaving employment, death or when you opt out of being an employed deferred member are defined by reference to your final pensionable salary. Your final pensionable salary is your pensionable salary multiplied by your average personal salary factor at that time. Pensionable salary is defined as 90% of the pensionable proportion of the Church’s salary package.

Under the proposals, your pension in the Plan will be calculated based on your pensionable salary and average personal salary factor as at 30 June 2025. If you have Old Scheme benefits (also called “suspended obligations”), these are calculated by reference to your pensionable salary only and do not allow for your average personal salary factor.

In the DC Scheme, your contributions are based on your full salary package and so, for all employees, the salary used to calculate your DC Scheme contributions is higher than the salary used to calculate your Plan benefits.

Will my pension benefits in the Plan still increase before I retire?

If the proposal goes ahead, from 30 June 2025 your pension benefits will revalue with inflation in line with the Plan Rules (subject to a cap) up to your Normal Retirement Date (NRD), which is your 65th birthday,.

Does the proposal affect when I can retire?

No. You can retire on or before your 65th birthday or you can delay taking your benefits after your 65th birthday up to age 75, and you will also have the option to exchange part of your pension for a cash sum where permitted under the Plan’s Rules (payable tax free under current tax laws).

If you decide to retire before or after age 65, your pension will be either reduced to reflect early payment or increased for late payment. Under the proposals if you defer taking your pension until after age 65 you will be able to choose when to start taking it up to age 75 regardless of whether you are still in employment with your employer or not.

You can request a retirement quote from Barnett Waddingham, the Plan administrators. You can contact them using the details below:

Email: Adventist@Barnett-Waddingham.co.uk

Telephone: 0333 11 11 222

What happens if I had a right to an unreduced pension from age 62 after 35 years of service?

Some employees are eligible (with the consent of the Executive Committee of the BUC) to take their retirement benefits unreduced from an earlier date than normally allowed. This applies if they reach 35 years of service in the Plan before their 65th birthday.

For eligible employees, who have 35 years of service, this right to take an unreduced pension applies from their 62nd birthday or 35-year service anniversary if later. The proposed changes mean those employees would end service in the Plan on 30 June 2025, which may be before their 35-year service anniversary.

As a result of this, it’s proposed those employees that would have achieved 35 years or more of service before age 65 and been eligible to take an unreduced pension after age 62 but before age 65 will retain the right to take their benefits unreduced from the same date regardless of whether they remain in employment with their employer or not.

By removing the need for those employees eligible for this to actually remain in continuous employment for 35 years, this represents an enhancement to those employees’ current benefits in this area.

What will happen to my ‘suspended obligations’ in the Old Scheme?

Some employees will have built up a pension promise in the ‘Old Scheme’, which are generally referred to as ‘suspended obligations’. Currently, these benefits are brought into the Plan when you retire so your Plan pension and suspended obligations in the Old Scheme are paid to you together from the Plan.

These suspended obligations are also linked to your salary. The proposal is to remove the salary link on these suspended obligations in the Old Scheme in the same way as your Plan pension.

What if I retire in ill-health?

As an employed deferred member, you are currently eligible (with the consent of the Executive Committee of the BUC) to receive an unreduced pension if you were to retire in ill-health (as defined in the Plan’s Rules). At the moment, once members have left service, they are no longer treated as being eligible for an unreduced ill-health pension and so your pension would be reduced to reflect your age if you took ill-health retirement before reaching age 65.

However, the BUC is proposing you’d continue to be treated as being eligible for an unreduced ill-health retirement pension if you were to retire on ill-health grounds after 30 June 2025, regardless of whether you remained in employment with your employer or not.

By removing the need for employees to remain in employment in order to receive an unreduced ill-health pension, this represents an enhancement to those employees’ current benefits in this area.

Will my spouse’s pension be affected by these changes?

Yes. Currently if you die before you retire, a pension would be payable to a spouse or eligible dependant (as set out in the Plan’s Rules). This pension would be a proportion of your pension based on your final pensionable salary at date of death or your 2013 pension with inflationary increases if higher.

The proposal means this death before retirement spouse’s pension will be a proportion of your pension based on (i) your final pensionable salary at 30 June 2025 plus inflationary increases as set out in the Rules (subject to a cap) between 30 June 2025 and your date of death or (ii) your 2013 pension with inflationary increases if higher.

We’d encourage you to discuss the proposed changes with your spouse or other financial dependants so you’re all aware of the potential changes.

As part of this, it’s important you make sure your Expression of Wish form is up to date. To update your form email Adventist@Barnett-Waddingham.co.uk

If the proposal goes ahead, will I still have a cash sum death in service benefit?

Whether or not the proposal goes ahead, you’ll continue to benefit from a death in service life assurance policy benefit which is funded by your employer.

However, if you were to die after your 65th birthday but before starting to receive your Plan pension, currently any lump sum due from the Plan would be reduced by the amount of any death in service lump sum received from the policy above.

The proposal is the reduction would no longer apply. In the event you died after your 65th birthday but before starting to receive your pension you would receive the full lump sum from the Plan plus any additional death in service lump sum paid out by the policy above.

This is an enhancement to your current benefits.

Can I transfer my retirement benefits to another Plan?

Yes. In general, individuals who haven’t started to take retirement benefits from the Plan have a right to transfer a cash equivalent amount of their benefits to an alternative pension arrangement (which meets certain legal requirements). Before making any decision, you should speak to a regulated financial adviser. 

If the value of your benefits in the Plan are more than £30,000 you must by law receive regulated financial advice before you are able to take a cash equivalent transfer value in relation to your Plan benefits.

It’s recommended you consider taking regulated financial advice if you need further information relating to your particular circumstances.  See ‘Where can I get financial advice?’ in the section below. 

What will happen to any Additional Voluntary Contributions (AVCs) in the Plan?

Your AVCs will be preserved and managed by the Plan Trustees as they are now, until you choose to retire.

 Proposed changes to the pension arrangements for employed deferred members of the Seventh-day Adventist Retirement Plan (the Plan)