What is waiver of contribution and can I have it on my pension plan?

If you became seriously ill or disabled and couldn’t work for a prolonged period, you may not be able to keep contributing to your pension plan. Your retirement fund would suffer as a result. Our waiver of contribution cover offers the solution to this.

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What is waiver of contribution?

If, in the future, you couldn’t work for more than six months because of a serious illness or accident, waiver cover would continue to pay the contributions into your pension plan (certain conditions apply).

You can apply for waiver cover up to age 58.

If I couldn’t work because of ill-health, how long will contributions continue to be paid?

Contributions to your pension plan would be paid during ill-health until you reach the pension date for your pension plan or age 60, if earlier, or until you recover or take benefit from your pension plan.
For full details of terms and conditions applying to waiver of contribution cover, please see the ‘Welcome to your pension’ booklet.

What happens if I return to work in a different occupation on less pay?

If you’re able to return to work to carry out a different job and you’re paid less than 75% of your previous salary, we’ll continue to pay contributions for as long as you’re physically unable to carry out the type of work you did before your waiver of contribution claim.

This example shows how this works:

Employee A is earning £25,000 a year, and is unable to work because of a back problem. After receiving waiver benefit for some time, the employee is still unable to carry out their original occupation, so they take a new job. Their new earnings are £12,000 a year.

As the employee’s earnings are less than 75% of their pre-disability earnings, we’ll continue to pay their claim for as long as they remain physically unable to carry out the type of work in their original job.

We review claimants regularly to make sure they’re still unable to carry out the type of work they were doing before the waiver claim.

Will the contributions paid under my claim increase in line with inflation?

Yes, they’ll increase in line with average weekly earnings if contributions to your pension plan increased automatically before your waiver claim (either because contributions are calculated as a percentage of earnings or increase by a percentage increase each year).

How much does waiver of contribution cost?

The normal cost is 2.5% of your pension contribution. Although, the cost of this benefit varies depending on your occupation, health and whether you pursue hazardous activities, but isn’t affected by your age or gender.

Is waiver of contribution available on my pension?

Waiver of contribution is available on our Group Personal Pension and Group Stakeholders pension plans.

If you’re an existing customer of any other product, please see your policy conditions to see is waiver is available to you.

Waiver is not available on our platform products.

How do I apply for waiver of contribution?

You can either apply for waiver cover (or your employer can do this on your behalf) or, if you already have a pension plan, by contacting us in writing or by phone. We’ll then send you a form to apply. You can apply to cover regular contributions, single contributions or both.

If you’d like more information about waiver of contribution cover, please speak to a financial adviser.