It's important to understand your pension is a long-term investment so its value can go down as well as up and you could get back less than was paid in.
Laws and tax rules may change in the future. Your own circumstances and where you live in the UK have an impact on tax treatment.
Plan details
Your employer is offering you the opportunity to join the IBM UK PPP - a Group Flexible Retirement Plan provided by Standard Life Assurance Limited.
It's important you make an informed decision so you should read the key documents at the bottom of this page.
And you can find answers to common questions in our FAQs
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How joining this plan will work
Auto-enrolment
You'll normally join automatically if:
- Your age is between 22 and the State Pension Age
- You earn more than £10,000 a year before tax with IBM
Your employer will let you know if you will be automatically enrolled - but there may be a waiting period from when you start working before you're enrolled.
What you need to do
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Make sure it's right for you
Paying into a company pension can be a great way to save for the future - especially since your employer pays in too. But you may decide it's not right for you. Once you've joined, you'll have a month to opt out. And you can stop or change your contributions in the future if you need to through Lifelens .
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Decide how much to pay in
It's up to you how much you pay in as long as you meet the minimum amount set by your employer.
Joining manually
You may still be able to join this plan, even if you aren’t auto-enrolled. The options depend on your age and how much you earn. You may be enrolled automatically if your circumstances change.
If you’re aged between 16 and 74:
If you earn £6,240 a year or more with your employer you can join this plan manually and benefit from payments made by your employer. Just tell them you want to join.
If you earn less than £6,240 a year you might still be able to join this plan. Your employer needs to give you access to a pension scheme but it could be different from this one and they might not pay in. Speak to your employer if you’d like to join.
What you get if you join
You’ll be set up with a company pension. You’ll get tax benefits on any contributions you make, but your employer might not pay in if you earn less than £6,240 a year.
What you need to do
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Make sure it's right for you
Paying into a company pension can be a great way to save for the future - especially since your employer may pay in too. And you can stop or change your contributions in the future if you need to. If you decide you want to join, select the pension benefit on your online benefits portal.
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Decide how much to pay in
It's up to you how much you pay in as long as you meet the minimum amount set by your employer.
Contribution options for this plan
You'll be able to change your contributions once you've joined this plan.
IBM will contribute up to 10% of your pensionable salary. This could depend on how much you pay in - see the table below.
| Your contribution | Employer's contribution | Total contribution |
|---|---|---|
| 3% (minimum) | 8% | 11% |
| 4% | 9% | 13% |
| 5% | 10% (maximum) | 15% |
| 6% or more | 10% (maximum) | 16% or more |
When you're first enrolled in this plan you'll pay in 3% of your salary. You can change this amount after you join through Lifelens .
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How contributions are made
There are two ways that you can make contributions into your pension plan. Both give you tax benefits but work in different ways. Please speak to IBM to find out how your contributions will be taken.
- SMART Pensions
This means contributions will be taken from your salary before tax and National Insurance (NI) are calculated. You and IBM will pay less NI and you won't need to reclaim any tax relief from the government manually. It's important to remember that SMART Pensions isn't right for everyone. It's a change to your terms of employment and could affect your entitlement to state benefits or your ability to borrow. - Payment from after-tax earnings
This means IBM will deduct your contributions from your after-tax earnings and pay them to Standard Life on your behalf. The government then adds tax relief on top of your contributions - boosting the amount that gets paid into your pension plan. Tax relief will be applied at the basic rate of income tax so if you normally pay more tax, you'll need to reclaim this from the government manually.
You might be able to change the way you make contributions into your pension plan - please speak to IBM to find out what your options are.
Increasing your contributions
You can increase your contributions beyond 5% but IBM will contribute a maximum of 10%. However, increasing your contributions could still make a big difference to your lifestyle in retirement.
Pension allowances
There's a limit to the amount that can be paid into your pension plans each tax year without paying a tax charge - for most people this is normally 100% of your earnings, capped at £60,000. But in some circumstances it could be lower.
There's also a lifetime allowance on the total value of your UK pensions. It's not a limit though - you can save more if you want to. It is just that any excess over your lifetime allowance will be taxed as earned income under PAYE rules when it comes into payment. At the moment, the lifetime allowance is £1,073,100.
These allowances aren't an issue for most people, but it's a good idea to check. For more information download our Guide to tax relief, limits and your pension (PDF 359KB).
Opting out
A company pension is one of the most rewarding ways to save for the future. But it's your choice and you can opt out if you want to.
You can't opt out until you join
You can only opt out once you've been enrolled into this plan by your employer. This is a government rule to encourage people to save into their pension plan. You'll be notified once you've been enrolled and will receive details about how to opt out at that point.
If you opt out you can still join later
Government rules may mean that you get auto-enrolled back into your company pension plan in the future. This normally happens every three years, but you can ask your employer if you'd like to join sooner. Though you may have to wait up to 12 months before you can join again.
The downsides of opting out
If you opt out, you won't receive any contributions from your employer. You may also lose some of the tax benefits if you put your money somewhere else.
Investment choices and charges
Important documents
These documents will help you understand how this plan works, so you can decide if it's right for you. It's a good idea to keep or save a copy of each one.
A guide to your pension
A 'Welcome' guide to the IBM UK PPP and the available investment options.
Product information
Read these documents to understand the features of your employer’s pension plan in detail.