We are pleased to provide you with an update on the latest developments for the Fund.
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The UK Government announced several changes relating to the tax relief limits on pension savings and the lifetime allowance tax charge applied on death benefits as part of the Spring 2023 Budget.
The following changes were announced and took effect from 6 April 2023:
Partial Membership option
Colleagues who have been impacted by the Tapered Annual Allowance can opt to be Partial Members of the DC Section of the MMC UK Pension Fund (the Fund). Under the Partial Membership option, colleagues have been able pay employee contributions at a monthly rate between £1 and £3,333 (i.e. instead of the standard % monthly rates) to help manage the amount being paid into the Fund. Instead of an employer contribution being paid into the Fund, the Company pays the colleague a non-pensionable salary supplement of 10.5% of basic salary (capped at £250,000 p.a.).
With the increase to the annual allowance the monthly maximum contribution limit for the partial membership option has been increased from £3,333 to £5,000 to allow colleagues to contribute up to the increased annual allowance of £60,000 per year. This was made available from the April 2023 Prosper window. If you consequently wish to increase your pension contribution under Partial Membership, please log into Prosper via the ‘My Quick Links’ section in Colleague Connect.
Lifetime Allowance Opt Out option
The Lifetime Allowance opt out option has been available for colleagues with pension savings in excess of £858,480 (80% of the Lifetime Allowance that applied for tax year 2022/2023). Under this option, the colleague also receives a non-pensionable salary supplement, in lieu of the company pension contribution. No changes have been made to this option, it therefore remains in place for existing colleagues as well as new joiners to the Company.
Should colleagues currently in this option wish to commence contributions either via the standard membership with employee and employer pension contributions or the aforementioned partial membership please log into Prosper to via the ‘My Quick Links’ section in Colleague Connect make the change.
Life Assurance
For the purposes of HMRC’s Lifetime Allowance charge calculation on death, any lump sum life assurance benefit was included as well as any other lump sum benefits that would be payable from a Registered arrangement, such as the return of a DC account from the Fund, as well as any other DC accounts a colleague may have from previous employment.
The Company’s default approach to managing the death in service benefits has been to provide any lump sum life assurance benefit above £500,000 through a ‘non-registered or Excepted’ arrangement, benefits from which do not count towards the Lifetime Allowance.
As the tax charge applied on lump sum benefits received above the lifetime allowance remains higher than the potential for a tax charge on benefits provided through an excepted group scheme (i.e. broadly, marginal tax rate in comparison to 6%) no changes will be made to the current structure through which life assurance benefits are provided.
Should you currently contribute via partial membership and wish to increase your contributions or have opted out for lifetime allowance reasons and now wish to opt in, these changes can be made via the benefits platform Prosper the link to which can be found in the ‘My Quick Links’ section in Colleague Connect. Please note changes can only be made during the monthly window which runs from 1st to 20th each month, your selected change will then be effective from the following month’s pay.
If you wish to discuss the options available to you or how to select them in Prosper please contact the benefits team at UKIBenefits@mmc.com
If you require advice on if you should increase or start pension contributions, you should consult an independent financial advisor. Help choosing one can be found here. You can also contact the Mercer Private Wealth team here.
July 2023
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Throughout 2022, we have seen some significant volatility in investment markets, resulting in large movements in both equity and bond markets as well as other types of investments.
Please click here to see a range of frequently asked questions relating to the ongoing market volatility that we hope will be helpful to you.
November 2022
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The challenge for many is how do you know whether you are on track for the kind of lifestyle you would like when you come to retire and what can you do about it. In order to help with this the Pension and Lifetime Savings Association (the “PLSA”) has developed the Retirement Living Standards to explain what life in retirement looks like at three different levels and what a range of common goods and services would cost for each level. We have created this flyer to provide an introduction to the Retirement living Standards, to get you thinking about how much you will need in retirement and an explanation of the different sources of retirement income.
November 2022
The UK Government announced several changes relating to the tax relief limits on pension savings and the lifetime allowance tax charge applied on death benefits as part of the Spring 2023 Budget.
The following changes were announced and took effect from 6 April 2023:
Partial Membership option
Colleagues who have been impacted by the Tapered Annual Allowance can opt to be Partial Members of the DC Section of the MMC UK Pension Fund (the Fund). Under the Partial Membership option, colleagues have been able pay employee contributions at a monthly rate between £1 and £3,333 (i.e. instead of the standard % monthly rates) to help manage the amount being paid into the Fund. Instead of an employer contribution being paid into the Fund, the Company pays the colleague a non-pensionable salary supplement of 10.5% of basic salary (capped at £250,000 p.a.).
With the increase to the annual allowance the monthly maximum contribution limit for the partial membership option has been increased from £3,333 to £5,000 to allow colleagues to contribute up to the increased annual allowance of £60,000 per year. This was made available from the April 2023 Prosper window. If you consequently wish to increase your pension contribution under Partial Membership, please log into Prosper via the ‘My Quick Links’ section in Colleague Connect.
Lifetime Allowance Opt Out option
The Lifetime Allowance opt out option has been available for colleagues with pension savings in excess of £858,480 (80% of the Lifetime Allowance that applied for tax year 2022/2023). Under this option, the colleague also receives a non-pensionable salary supplement, in lieu of the company pension contribution. No changes have been made to this option, it therefore remains in place for existing colleagues as well as new joiners to the Company.
Should colleagues currently in this option wish to commence contributions either via the standard membership with employee and employer pension contributions or the aforementioned partial membership please log into Prosper via the ‘My Quick Links’ section in Colleague Connect to make the change.
Life Assurance
For the purposes of HMRC’s Lifetime Allowance charge calculation on death, any lump sum life assurance benefit was included as well as any other lump sum benefits that would be payable from a Registered arrangement, such as the return of a DC account from the Fund, as well as any other DC accounts a colleague may have from previous employment.
The Company’s default approach to managing the death in service benefits has been to provide any lump sum life assurance benefit above £500,000 through a ‘non-registered or Excepted’ arrangement, benefits from which do not count towards the Lifetime Allowance.
As the tax charge applied on lump sum benefits received above the lifetime allowance remains higher than the potential for a tax charge on benefits provided through an excepted group scheme (i.e. broadly, marginal tax rate in comparison to 6%) no changes will be made to the current structure through which life assurance benefits are provided.
Should you currently contribute via partial membership and wish to increase your contributions or have opted out for lifetime allowance reasons and now wish to opt in, these changes can be made via the benefits platform Prosper the link to which can be found in the ‘My Quick Links’ section in Colleague Connect. Please note changes can only be made during the monthly window which runs from 1st to 20th each month, your selected change will then be effective from the following month’s pay.
If you wish to discuss the options available to you or how to select them in Prosper please contact the benefits team at UKIBenefits@mmc.com
If you require advice on if you should increase or start pension contributions, you should consult an independent financial advisor. Help choosing one can be found here. You can also contact the Mercer Private Wealth team here.
July 2023
Throughout 2022, we have seen some significant volatility in investment markets, resulting in large movements in both equity and bond markets as well as other types of investments.
Please click here to see a range of frequently asked questions relating to the ongoing market volatility that we hope will be helpful to you.
November 2022
The challenge for many is how do you know whether you are on track for the kind of lifestyle you would like when you come to retire and what can you do about it. In order to help with this the Pension and Lifetime Savings Association (the “PLSA”) has developed the Retirement Living Standards to explain what life in retirement looks like at three different levels and what a range of common goods and services would cost for each level. We have created this flyer to provide an introduction to the Retirement living Standards, to get you thinking about how much you will need in retirement and an explanation of the different sources of retirement income.
November 2022
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From 6 April 2028, the government is changing the minimum age from which you can take retirements benefits from age 55 to age 57.
Although this change is not for nearly 6 years, you should take this opportunity to review your retirement plans, to ensure that you are aware of any impact on them.
You can find more information about this change on the gov.uk website here.
April 2022
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There are many tax advantages of contributing to the Fund, including tax relief on contributions and investments. Further details can be found here.
Some of our members may be affected by the HMRC limits in place on tax relief. There are limits on tax relief for contributions made in the tax year and contributions made throughout your lifetime.
We have produced a document which will help you understand if you are affected and what options MMC has to help you manage your tax position.
July 2023
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If you are under age 55, you cannot draw pension benefits from the Fund (unless you are in serious ill health). If you are 55 or over, it may be possible to release funds from your pension and this makes you a more attractive target for scammers. Here are some common warning signs to watch out for:
You can also view a video on YouTube (skip the Ads) giving you further useful information about pensions scams, as well as this handy leaflet summarising how pension scams work, how to avoid them, and what to do if you suspect a scam.
For more information on how to avoid scams and useful resources, you can also visit www.fca.org.uk/scamsmart.
October 2021
From 6 April 2028, the government is changing the minimum age from which you can take retirements benefits from age 55 to age 57.
Although this change is not for nearly 6 years, you should take this opportunity to review your retirement plans, to ensure that you are aware of any impact on them.
You can find more information about this change on the gov.uk website here.
April 2022
There are many tax advantages of contributing to the Fund, including tax relief on contributions and investments. Further details can be found here.
Some of our members may be affected by the HMRC limits in place on tax relief. There are limits on tax relief for contributions made in the tax year and contributions made throughout your lifetime.
We have also produced a document which will help you understand if you are affected and what options MMC has to help you manage your tax position.
July 2023
If you are under age 55, you cannot draw pension benefits from the Fund (unless you are in serious ill health). If you are 55 or over, it may be possible to release funds from your pension and this makes you a more attractive target for scammers. Here are some common warning signs to watch out for:
You can also view a video on YouTube (skip the Ads) giving you further useful information about pensions scams, as well as this handy leaflet summarising how pension scams work, how to avoid them, and what to do if you suspect a scam.
For more information on how to avoid scams and useful resources, you can also visit www.fca.org.uk/scamsmart.
October 2021
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The Trustee is committed to focusing on sustainability in the management and monitoring of your savings.
The Fund’s default strategy has also set a target of net-zero absolute carbon emissions by 2050. The interim plan to achieve this target aligns with targeting a 1.5°C limit on global temperature increases and the Paris Agreement’s ambitions.
For more details on the Trustee’s beliefs and policies regarding sustainability, please read:
October 2023
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The Trustee has introduced the Pension Decision Service (PDS) from Mercer to support members of the Fund in making informed choices in the lead up to their retirement.
When members are provided with a retirement quotation from the Fund setting out their options, they will now also be sent details of the PDS. This is a free service for members.
PDS provides members with a dedicated Retirement Relationship Manager to help with any questions they may have when planning their retirement. A call with a Retirement Relationship Manager is designed to:
More information on PDS can be found here, and you can also view an introductory video overview of the PDS here.
October 2021
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For active members of the Fund life assurance, which forms part of your overall Marsh McLennan benefits package, provides additional financial security for your family and other dependants should you pass away whilst employed by the Company. The lifetime allowance could affect your death in service benefits. The Lifetime Allowance is a limit set by HM Revenue & Customs (HMRC) on the amount of benefit that can be paid through a Registered arrangement without triggering a tax charge. The Lifetime Allowance is currently set at £1,073,100 and benefit above this would be taxed at the beneficiary’s marginal rate.
For more detail on how you may be impacted by this please find further resources below:
The Lifetime Allowance is a limit set by HM Revenue & Customs (HMRC) on the amount of benefit that can be paid through a Registered arrangement without triggering a tax charge. The Lifetime Allowance is currently set at £1,073,100 and benefit above this would be taxed at the beneficiary’s marginal rate.
For the purposes of the Lifetime Allowance charge calculation, on death your lump sum life assurance benefit would be included as well as any other lump sum benefits that would be payable from a Registered arrangement, such as the return of your Defined Contribution (DC) account from the MMC UK Pension Fund, as well as any other DC accounts you may have such as from any previous employment.
MMC’s default approach to managing the death in service benefits is to provide any lump sum life assurance benefit above £500,000 through a ‘non-registered or Excepted’ arrangement, benefits from which do not count towards the Lifetime Allowance. Two examples of how the Lifetime Allowance would apply based on MMC’s default approach are as follows:
MMC Life Assurance benefit, as selected in Prosper: | MMC Pension Fund DC account: | DC account from previous employment: | Total benefit payable in the event of death: |
£1,080,000 (18 x salary) | + £120,000 | + £50,000 | = £1,250,000 |
Total benefit for Lifetime Allowance purposes: | £670,000* | ||
Benefit exposed to Lifetime Allowance charge: | £nil |
MMC Life Assurance benefit, as selected in Prosper: | MMC Pension Fund DC account: | DC account from previous employment: | Total benefit payable in the event of death: |
£2,880,000 (16 x salary) | + £500,000 | + £150,000 | = £3,530,000 |
Total benefit for Lifetime Allowance purposes: | £1,150,000* | ||
Benefit exposed to Lifetime Allowance charge: | £76,900 |
If you have been granted any form of HMRC protection from the Lifetime Allowance, such as Fixed Protection, and have already informed the MMC Benefits Team then no action is required. All lump sum life assurance benefits are automatically insured via MMC’s Excepted/non-registered arrangement if you have opted out of the MMC UK Pension Fund for pension savings tax reasons and currently receive a Non Pensionable salary Supplement (NPSS).
If you have not previously informed MMC that you have HMRC protection then you should do so immediately as inclusion in the MMC UK Pension Fund gives rise to the potential for protection from the Lifetime Allowance to be lost. Please send a copy of your HMRC protection certificate to UKIBenefits@mmc.com.
For any further questions, please click here to access FAQs or contact UKIBenefits@mmc.com.
July 2023
If you have been granted any form of HMRC protection from the Lifetime Allowance, such as Fixed Protection, and have already informed the MMC Benefits Team then no action is required. All lump sum life assurance benefits are automatically insured via MMC’s Excepted/non-registered arrangement if you have opted out of the MMC UK Pension Fund for pension savings tax reasons and currently receive a Non Pensionable salary Supplement (NPSS).
If you have not previously informed MMC that you have HMRC protection then you should do so immediately as inclusion in the MMC UK Pension Fund gives rise to the potential for protection from the Lifetime Allowance to be lost. Please send a copy of your HMRC protection certificate to contact.mercer.com.
For any further questions, please click here to access FAQs or contact contact.mercer.com.
July 2023
The Trustee is committed to focusing on sustainability in the management and monitoring of your savings.
The Fund’s default strategy has also set a target of net-zero absolute carbon emissions by 2050. The interim plan to achieve this target aligns with targeting a 1.5°C limit on global temperature increases and the Paris Agreement’s ambitions.
For more details on the Trustee’s beliefs and policies regarding sustainability, please read:
October 2023
The Trustee has introduced the Pension Decision Service (PDS) from Mercer to support members of the Fund in making informed choices in the lead up to their retirement.
When members are provided with a retirement quotation from the Fund setting out their options, they will now also be sent details of the PDS. This is a free service for members.
PDS provides members with a dedicated Retirement Relationship Manager to help with any questions they may have when planning their retirement. A call with a Retirement Relationship Manager is designed to:
More information on PDS can be found here, and you can also view an introductory video overview of the PDS here.
October 2021
For active members of the Fund life assurance, which forms part of your overall Marsh McLennan benefits package, provides additional financial security for your family and other dependants should you pass away whilst employed by the Company. The lifetime allowance could affect your death in service benefits. The Lifetime Allowance is a limit set by HM Revenue & Customs (HMRC) on the amount of benefit that can be paid through a Registered arrangement without triggering a tax charge. The Lifetime Allowance is currently set at £1,073,100 and benefit above this would be taxed at the beneficiary’s marginal rate.
For more detail on how you may be impacted by this please find further resources below:
The Lifetime Allowance is a limit set by HM Revenue & Customs (HMRC) on the amount of benefit that can be paid through a Registered arrangement without triggering a tax charge. The Lifetime Allowance is currently set at £1,073,100 and benefit above this would be taxed at the beneficiary’s marginal rate.
For the purposes of the Lifetime Allowance charge calculation, on death your lump sum life assurance benefit would be included as well as any other lump sum benefits that would be payable from a Registered arrangement, such as the return of your Defined Contribution (DC) account from the MMC UK Pension Fund, as well as any other DC accounts you may have such as from any previous employment.
MMC’s default approach to managing the death in service benefits is to provide any lump sum life assurance benefit above £500,000 through a ‘non-registered or Excepted’ arrangement, benefits from which do not count towards the Lifetime Allowance. Two examples of how the Lifetime Allowance would apply based on MMC’s default approach are as follows:
MMC Life Assurance benefit, as selected in Prosper: | MMC Pension Fund DC account: | DC account from previous employment: | Total benefit payable in the event of death: |
£1,080,000 (18 x salary) | + £120,000 | + £50,000 | = £1,250,000 |
Total benefit for Lifetime Allowance purposes: | £670,000* | ||
Benefit exposed to Lifetime Allowance charge: | £nil |
MMC Life Assurance benefit, as selected in Prosper: | MMC Pension Fund DC account: | DC account from previous employment: | Total benefit payable in the event of death: |
£2,880,000 (16 x salary) | + £500,000 | + £150,000 | = £3,530,000 |
Total benefit for Lifetime Allowance purposes: | £1,150,000* | ||
Benefit exposed to Lifetime Allowance charge: | £76,900 |
For the avoidance of doubt, in the event of death, benefits through membership of MMC’s Defined Benefit (DB) arrangements are paid as pension income to beneficiaries rather than lump sums and do not count towards the Lifetime Allowance calculation.
If the default approach does not work for you then you can request to have all of your lump sum life assurance benefit provided via the Excepted/non-registered arrangement. Completion of a form is required to make the request; this can be found on our Forms page. If you are unsure of the approach you should take, you should take advice from an independent financial advisor. You can also contact the Mercer Private Wealth team here.
There are some circumstances where UK inheritance tax could be payable on benefits provided via a non-registered arrangement. Based on inheritance tax rates, law and HMRC confirmations applicable to deaths occurring prior to 1 April 2022 this tax charge would not be more than 6% of the lump sum death benefit paid. If any such UK inheritance tax were payable, it would be deducted from the lump sum benefit at or before the time of payment.
If you have been granted any form of HMRC protection from the Lifetime Allowance, such as Fixed Protection, and have already informed the MMC Benefits Team then no action is required. All lump sum life assurance benefits are automatically insured via MMC’s Excepted/non-registered arrangement if you have opted out of the MMC UK Pension Fund for pension savings tax reasons and currently receive a Non Pensionable salary Supplement (NPSS).
If you have not previously informed MMC that you have HMRC protection then you should do so immediately as inclusion in the MMC UK Pension Fund gives rise to the potential for protection from the Lifetime Allowance to be lost. Please send a copy of your HMRC protection certificate to UKIBenefits@mmc.com.
For any further questions, please click here to access FAQs or contact UKIBenefits@mmc.com.
July 2023