What's the difference between TelefonicaPensions.com and TelefonicaRewards.com?
Simple, Telefónica Pensions
contains all information about Telefónica Pensions, e.g. the latest news, contact information, benefits of being a member etc. Whereas, Telefónica Rewards allows active employees to make specific changes to your Pension, e.g. change your contributions, make an Additional Voluntary Contribution (AVC) etc. Unfortunately, we cannot have all information on one website because Telefónica Rewards is for active employees and requires login details.
I'm confused with all the references to different sections of the Plan, which section am I in and who administers my Telefónica pension?
We appreciate it can get a little confusing. There are two main sections associated with the Telefónica Plan, first, our current Defined Contribution (DC/ Money Purchase) section administered by Standard Life and second, our former Defined Benefit (DB/ ex-final salary) section of the Plan administered by LCP. For more details please click here.
How much is my pension worth?
To check the current value of your pension, click on your Pension Statement via Telefónica Rewards.
You will need to log in to view this information, but don’t worry if you’ve forgotten your password. All you have to do is click on ‘email my password’ and enter your Employee Number (EIN). We’ll send a password to your work email address.
What is auto-enrolment and does it apply to me?
Auto-enrolment is the process which automatically enrols employees into their employer's workplace pension scheme without any active involvement. This is a legal requirement. For more information click here.
What happened to the AVC payments I made when I was a final salary member?
If you paid AVCs into the Plan when you were in the final salary section (pre 28 February 2013) they are still held with Standard Life in a separate pot to your current Defined Contribution (DC) benefits. You can check the value of your AVC pot at any point via Telefónica Rewards. When you put your final salary benefits into payment you can take your AVCs as part of these benefits e.g. as part of your tax free cash lump sum.
When can I retire?
The minimum retirement age is currently 55. If you are an ex-final salary member, you have a protected minimum retirement age of 50. For more information on retirement ages and potentials restrictions on how you take your benefits please click here.
Am I saving enough?
This question is a bit harder to answer because it depends on the type of lifestyle you are looking for upon retirement. We would always suggest it's worth speaking with your financial advisor to make sure you're saving enough for your retirement. Everyone is different but a quoted rule of thumb is to aim for a retirement income that is around two-thirds of your final salary when you retire.
However, if you see retirement as an opportunity to do the things you’ve always wanted, it’s likely you will need more than this – particularly if you’re planning to travel regularly. Equally, if you see retirement as an opportunity to relax and unwind, you may well need less.
Can I save more in my pension?
Yes, you can put aside up to a maximum of 100% of your salary, as long as you can still meet your other financial commitments and your legislative requirements.
To find out more about the contribution structure and how to change your contributions, go to making contributions.
Can I change how my pension is invested?
Yes, you can. In addition to the default choice (which is currently 'Getting ready to purchase an annuity') there are two other lifestyle options and a Selfstyle option. It is worth researching all the choices before making any changes.
The Lifestyle options are designed for growth when you are many years from retirement, and stability when you are closer to taking your benefits.
The Selfstyle option enables you to create your own pension portfolio from the 9 funds that we offer. You can invest in some or all of these funds, but you must allocate all 100% of your pension savings between them.
What happens if I leave the Company?
For a start, we’ll miss you. In terms of your pension, your membership of the Plan will end when you leave the employment of the Company, effectively making you a deferred member of the Plan. What happens to your pension savings will depend on how long you have been with us.
There are only a few years until I retire. Is there anything I need to do?
If you’ve chosen the Selfstyle option, you might want to think about moving some or all of your money into lower-risk funds to protect the value of your pension savings. Other than that, we’ll write to you as soon as you need to do anything. This is only likely to happen 6 months before you intend to retire.
I’m retiring in a few months. What happens now?
You should have received a letter from the Plan Administrator that explains the decisions you need to make. There’s also more information in the Retirement section of our site.
From April 2015 you will have freedom to access your Retirement Account in a number of different ways. Please see the Retirement section for more information.
Click here for more information on the changes announced in the 2014 Budget.
How are my pension savings protected?
There are a number of measures in place that aim to keep your pension savings safe. The Trustee has reviewed the protection available across all the funds in the Plan and believes they all provide an appropriate level of security.
All funds are protected by the Financial Services Compensation Scheme (FSCS). For more information on the FSCS, please visit www.fscs.org.uk
What is included in the calculation for Pensionable Pay?
The definition depends on what section of the Plan you're in.
Sections 1 and 1B (Defined Contribution, DC only)
Plan Salary is defined as basic salary (adjusted to reflect any salary sacrifice arrangement and subject to the earnings cap of £160,800 for the 2018/19 tax year). Therefore overtime and other allowances would not fall within the definition.
If you do anti-social hours and receive a shift allowance this is pensionable, e.g. you work a 38 hour week and within this you do some night shifts. If you work a 38 hour week and within this week you do an additional 8 hours Sunday overtime then this shouldn’t be pensionable. Company Car is also not included in Pensionable Pay.
Section 1A (Defined Benefit, DB, ex-final salary member)
Since 1 March 2013, Plan Salary is defined as your basic salary including London weighting and any other emoluments as notified to you as a Section 1A Member by Telefónica as being pensionable including any emoluments specified as being pensionable as set out in the appropriate section of your employment contract. The Pension Supplement is specifically excluded (and the amount is adjusted to reflect any salary sacrifice arrangement and, for some members, is subject to the earnings cap of £160,800 for the 2018/19 tax year). This also mirrors the definition of Plan Salary in the old DB sections.
What does the 'earnings cap mean'?
The Earnings Cap limits the amount of 'pensionable earnings' on which pension contributions are paid and on which pension benefits are calculated. The earnings cap was removed by HMRC on 6 April 2006 but schemes such as the Telefónica UK Pension Plan were allowed to continue using the cap beyond this date. New joiners will, therefore, be automatically capped at the earnings cap limit for that particular tax year.
Taking a worked example, if your pensionable earnings were £170,000 the earnings cap means your actual pensionable earnings would be £160,800 (for the 2016/17 tax year). If you made a 3% employee pension contribution your annual employee pension contributions would therefore be £4,824 per annum (e.g. £160,800 x .03) as opposed to £5,100 (e.g. 170,000 x 0.3). Your employer contributions would also be based on the earnings cap of £160,800. The earnings cap may be particularly important when considering your annual tax allowance. Please click here for more information.
The earnings cap for the 2018/19 tax year is £160,800.
If you're in any doubt how much you're contributing to the Plan please check your latest payslip or visit the Standard Life website to view your latest Pension statement. To log in to the Standard Life portal you will need your Plan number. This can be found on any recent letters from Standard Life. Alternatively, you can contact Standard Life who can then send you this information.