Your DB and DC benefits | Credit Suisse Group (UK) Pension Fund

About your hybrid benefits

If you joined the Fund before 1 January 2000 you may have DB and DC benefits, known as "hybrid" benefits.

Your DB benefits

Your defined benefit or DB pension is worked out based on your years of pensionable service before 1 April 2004 (working, contributing to the Fund and building up benefits) and your salary when you left Credit Suisse. Your DB pension may increase each year until you retire or transfer your benefits out of the Fund. Different parts of your pension may increase in different ways, depending on when you earned the pension.

If you left Credit Suisse after 1 April 2004, your pension will be based on your salary when you left Credit Suisse. This will have an “underpin” – broadly speaking, a minimum level – to ensure you are no worse off than if you had left Credit Suisse on 1 April 2004.

About your DC benefits

Your defined contribution or DC benefits build up based on contributions (from you and Credit Suisse) and investment returns.

You choose investments from a range made available by the trustees, including a “default” option that you automatically go into if you don’t make another choice. You will find details of the investment options available in the investment choices guide, available to download from the Library.

If you stop contributing to your DC benefits (generally because you leave Credit Suisse and go to work elsewhere) their value continues to change in line with the performance of your chosen investments. (The value of your benefits may increase or decrease, depending on investment performance, and is not guaranteed. You could get back less than the amount you paid in.)

You can change your investment choices at any time on the Fidelity PlanViewer website. Visit the Do it online page.

Options when you retire from the Fund

A pension

Take all your DB benefits as a pension. It may increase each year in line with the Fund rules.

You can use some or all of your DC benefits to provide more pension by buying an annuity (a policy that pays an income for the rest of your life) from an insurance company. You would have access to a wide choice of providers and a range of different kinds of pension.

Tax-free cash

You can choose to use your DC benefits for tax-free cash before exchanging any of your DB pension for cash.

Normal retirement

Your Normal Retirement Age will be either 60 or 65, depending on what section of the Fund you were a member of before 1 April 2004.

Early and late retirement

You can usually start taking all your benefits before your Normal Retirement Age as long as you have reached your minimum retirement age (55 for most people).

Your DB pension is likely to be reduced, as it could potentially be paid for a longer time.
Alternatively, you may be able to take your benefits later than your Normal Retirement Age. Your DB pension is likely to be increased, as it could potentially be paid for a shorter time.

How to retire

If you are still working for Credit Suisse, you may need to leave Credit Suisse’s employment before you can draw your benefits. You will need to take this into account in the timing of your retirement.

Take a look at the steps involved.

Step 1 – Five years before . . .

Five years before your Normal Retirement Age, Fidelity will write to you at the address they have on their records and ask you to confirm that your contact details are correct. Once you have done this, Fidelity will send you a retirement illustration showing an estimate of your starting pension and how this changes if you take tax-free cash.

Step 2 – One year to go . . .

One year before your Normal Retirement Age – or earlier, if you ask to take early retirement – Fidelity will write to you again, asking you to confirm that your contact details are correct. Once you have done this they will send you a retirement illustration showing an estimate of your starting pension and how this changes if you take tax-free cash. They will also send you the forms you need to make your retirement choices, and give you access to the retirement modeller that will be available to help you consider the options available to you.

You will need to decide how to take your benefits - for example, whether you want to take any tax-free cash. The Trustees recommend you take financial advice when considering the options available to you.

Step 3 – Once you've made your mind up . . .

Once you have made your decisions, fill in the forms provided and return them to Fidelity at least two months before your planned retirement date.

Your DB pension will be paid monthly in advance from your retirement date.
Your DC benefits will be disinvested and, depending on the options you have chosen, used to pay your tax-free cash and/or used to buy extra pension in line with your instructions.

Tax charges

Any lifetime allowance tax charges due will usually be taken off before your benefits are paid. Visit Pensions and tax for more information about the lifetime allowance.

Transferring out

Before you retire, you may be able to take your savings out of the Fund completely and put them into another pension arrangement.

Transferring out could give you access to more flexible retirement options that are not available from the Fund. Go to Retirement options outside the Fund for more information. Go to Do it online for details of the online modellers available to help you explore your options.

Transferring options . . .

You have the following options.

Transfer out your DC benefits only, leaving your DB benefits in the Fund.
Transfer out your DB benefits only, leaving your DC benefits in the Fund.
Or, transfer out your DB and DC benefits.

Also consider . . .

You will also need to take the following things into consideration.

If your DB transfer value is £30,000 or more, you are legally required to take and pay for financial advice from an adviser qualified as a “pension specialist”. Visit Getting financial advice for details of organisations that can help you with finding financial advice.
Transferring out will change your DB benefits to DC (a pot of money you use to provide benefits, rather than a defined amount of yearly pension).
The value of DB benefits and DC benefits is worked out in different ways for tax purposes. This means that transferring out your DB benefits could affect how much of your lifetime allowance you use – see Pensions and tax for more information about the lifetime allowance.
Transferring out removes your right to any further benefits from the Fund for you and your dependants. You should discuss this with any dependants you have before you transfer out.
If your minimum early retirement age in the Fund is 50 or you are have a protected (enhanced) level of tax-free cash, you will lose these protections if you transfer out.
You will need to check the receiving pension arrangement can accept the transfer.
Beware of pension scams – see Pension scams for more information.
You may be able to transfer your Fund DC benefits to the Credit Suisse Master Trust if you already have benefits in it. This option is not available if you don’t have existing benefits in the Master Trust.

Let's look at an example

Check out the story below.

Let's look at Anna's story . . .

Anna has DB and DC benefits in the Fund, including DC Plus benefits .

If she takes her DB pension at Normal Retirement Age, she could receive a pension of £20,000 a year. In addition to this she has built up £50,000 of DC benefits.

She has a combined DB and DC tax-free cash amount of £150,000. This is more than a quarter of the value of her benefits because she joined the Fund before the tax rules changed in 2006 and, as a result, has a protected level of tax-free cash in the Fund.

She could take her DC benefits (£50,000) as tax-free cash as well as exchanging some of her DB pension to provide up to £100,000 more tax-free cash, giving her £150,000 of tax-free cash in total.

As a hybrid member she could transfer her DB benefits only, her DC benefits only, or all her benefits, out of the Fund to another pension arrangement to access the flexible retirement options available outside the Fund.

Options outside the Fund

Anna has the following options.

Transfer out all her benefits at once, which would give her a transfer value of £480,000. After transferring out, she could immediately take a quarter of the amount she has transferred (£120,000) as tax-free cash. She could use the rest to buy a pension straight away, or leave it invested (with the option of using it for drawdown or buying a pension at a later date). Any benefits or payments she receives in future will depend on the amount of money available in her pension pot to provide them.
Transfer out her DB benefits only, leaving her DC benefits in the Fund.
Transfer out her DC benefits only, leaving her DB pension in the Fund.

However: if Anna transfers out she will lose her protected level of tax-free cash on the benefits she transfers. So if she transfers all her benefits out (option 1) she would only be able to take up to a quarter of this amount (£120,000) as tax-free cash.

Options 1 and 2 would require her to take independent financial advice, because the transfer value of her DB benefits is more than £30,000.