The basics

How does the DB Section work?

If you joined the Plan before 1999, you’re probably a member of the defined benefit (DB) Section (also known as the final salary section).

The DB Section is now closed to new entrants.

In the DB Section, we calculate your pension at retirement based on:

Contributions 

Your contribution rate will depend on the terms that were in place when you joined the Plan.

The amount the company pays depends on the DB section rules and is set every three years by the Plan actuary.

Employee contributions are fixed, but the company can vary its contributions to make sure there’s enough money to pay the benefits members are building up.

Employer contributions into a DB scheme do not benefit members individually and have no impact on personal pension calculations at retirement. Your DB Section pension is calculated in accordance with the Plan rules, and factors in your pensionable service and pensionable salary, not employee and employer contributions.

Employer contributions are paid into the Plan on behalf of the whole membership to ensure the Plan remains appropriately funded for all DB Section members, but they do not form part of your individual benefit entitlement.

Boost your pension

To know whether you’re saving enough for retirement, it’s worth thinking about how much you’ll need to live on when you stop working.

• Some costs might fall (e.g. mortgage, commuting).
• Some costs might rise (e.g. holidays, hobbies).

You could decide to set a target that is a percentage of your current salary, such as 70%. For example, if you earn £40,000 a year, a good retirement income target might be around £28,000 a year.

You can also get an idea of how much you’d need for a minimum, moderate or comfortable lifestyle in retirement by going to retirementlivingstandards.org.uk.

Will it be enough?

Once you have an idea of how much you’ll need, add together:

Your pension from the Plan

+

Your State Pension

+

Any other pensions, income or savings you will have

Compare this to how much you think you’ll need, and work out whether you’re going to have enough.

If not, you might want to think about saving more by paying Additional Voluntary Contributions (AVCs).

Additional Voluntary Contributions

1. Save: Additional Voluntary Contributions (AVCs) are paid alongside your Defined Benefit (DB) pension and held in a separate account in your name. They are invested to help them grow over time. You can set up a regular AVC as a percentage or monetary amount, and you can request a monetary one off AVC at any time.
2. Invest: AVC contributions are automatically invested in the Lifestyle Fund, which is designed to manage investment risk by gradually adjusting your investments as you get closer to retirement. However, you also have the option to take a more active approach by selecting your own funds from the self-select range. See Investments to learn more.
3. Retire: When you retire, you can choose how to use your AVC fund in the way that suits you. See retirement options to find out more.

The value of your investments can go up and down and you may get back less than you put in. Remember, though, that pension savings are a long-term investment and short-term ups and downs are normal.

Paying AVCs costs less than you might think

For most members, the cost of paying AVCs is less than the amount you save because you don’t pay tax on your contributions and if you make contributions by SMART – the salary sacrifice arrangement – you make National Insurance savings too. See Tax for more information.

To start paying AVCs or make a one-off AVC payment, log in to or register for My Pension Tracker.