Your easyJet retirement savings scheme
Let’s take a look at your new workplace retirement savings scheme.
ARC is the name of the retirement savings product you’ll have with Aegon. It gives you access to a pension plan so that you can save for your retirement and then take an income when you retire.
Your pension plan will be a Self-Invested Personal Pension (SIPP), which in simple terms is a standard personal pension with flexibility and choice with the investments you can choose.
ARC brings many benefits including the ability to invest in a wide range of investments and gives access to other savings and investment products, including an Individual Savings Account (ISA). ARC’s range of products gives you options in the way you can choose to save and to make the most of your money.
You can find out more about ARC (PDF)(Opens new window)(Opens new window) in the Key Features Document.
When you first join the scheme the contributions that you and easyJet pay into your retirement savings each month will depend on your employment contract.
However it’s up to you if you want to pay in more. You should think about the level of income you’d like in your retirement and whether the default contribution amount is likely to get you there (see the next section 'Can I change the amount I pay into my pension plan' for more information).
There are risks associated with investing, meaning you could get back less than originally invested due to investment performance. The value of your investment can fall as well as rise and isn’t guaranteed.
The amount of money you’ll have to retire on will, among other things, depend on the contributions you make into your pension scheme. It’s important to pay contributions into your pension scheme at a rate that will allow it to provide the income you want when you retire - and many people do underestimate this!
You can use the ‘score’ and ‘goals’ tools on Reitready to check whether you’re likely to be on target with the contributions you’re paying.
Your Retiready Score
Your Retiready Score is a number out of 100 that tells you how on track you are to getting the retirement you want. Getting your score is easy – all you need to do is type in some details of your current retirement plans – like how much you have in savings and any contributions you or your employer make. Then tell us what income you’d like in retirement and Retiready will give you your score.
It only takes a few minutes and no matter what your score is, Retiready has the tools you need to help you understand what to do to make it better.Get your Retiready Score
Remember that this is just an estimate of your retirement benefits and will, of course, depend on a number of other things including: where you invest; what other savings you already have; how you're taxed; when you choose to retire. And remember that it’s important to contribute an amount that you feel you can comfortably afford.
Making contributions through salary sacrifice (also known as salary exchange)(Expand content) (Minimise content)
When you first join the scheme your contributions will automatically be paid into the Scheme through ‘salary sacrifice’. Salary sacrifice is where you as an employee give up, in advance, a certain amount of salary in return for an extra pension contribution of the same amount from easyJet.
Don’t worry! Despite the term ‘sacrifice’, it doesn’t mean that you’re getting less money – in fact, it will normally mean your take-home pay goes up slightly. This is because you only pay National Insurance on the salary you actually receive – not the amount you’ve given up. It’s also Government approved and lots of UK pension schemes work in the same way.
As your salary is reduced you avoid paying tax and NI on the amount sacrificed. Basic rate tax payers will effectively benefit from basic rate tax relief and the NI saving, and if you pay tax at the higher or additional rate and take part in salary sacrifice, you’ll automatically receive tax-relief at your highest marginal rate rather than having to reclaim it from HM Revenue & Customs.
Find out more about salary sacrifice on our website. This is based on our understanding of current taxation law and HM Revenue & Customs practice, which may change.
However, salary sacrifice isn’t suitable for everyone. You should think about other things linked to your level of salary such as the amount of mortgage you can borrow or any other benefits, such as statutory maternity, paternity, sick pay, Working Tax Credit/Child Tax Credit or basic state pension. If you want more information on the suitability of salary sacrifice, you should get professional financial advice.
Salary sacrifice is part of your Terms and Conditions of Employment and, unless you choose to opt-out, you agree to give up this amount of salary until further notice, as long as easyJet agrees to pay the same amount on your behalf as an extra contribution to the Scheme. Your ‘reference salary’ (ie the salary before your sacrifice for pension contributions) will still be linked to your other easyJet benefits.
You can choose to opt out of salary sacrifice and still make pension contributions from your monthly salary, and receive basic rate tax relief automatically. If you choose to opt-out of salary sacrifice you won’t benefit from the additional National Insurance saving contribution from easyJet, and if you pay tax at the higher or additional rate you'll need to reclaim the extra tax relief above basic rate from HM Revenue & Customs.
If you want to opt out, contact easyJetbenefits4me.email@example.com and they can give you the opt-out form to complete. You can do this at any time.
Since salary sacrifice is a contractual agreement, opting out will mean a change to your current employment contract to reflect that you're no longer giving up salary for pension.
The money you pay into your pension is invested, and it’s the performance of this investment that is one of the factors that determines how much money you’ll have to take an income from.
It’s up to you how you invest your pension contributions. When you first join the scheme your regular contributions will be automatically invested in the scheme’s default fund (unless you joined the scheme in October 2017 as part of moving from the old Aegon scheme - the communications we sent you as part of this move will tell you the investment fund you were invested in). You can leave them invested here or if you prefer, you can choose to invest elsewhere.
Your scheme's default fund
easyJet have worked with the scheme adviser, Aon Consulting Ltd, and have chosen the Aegon Growth Tracker (Flexible Target)(Opens new window) as the default fund for your scheme.
Choosing another investment fund
If you’d prefer to invest your contributions in something different you can change your investment choice (known as ‘switching’) online once your plan has been set-up.
You can invest in a wide range of funds(Opens new window) – find out what your choices are.
You should think carefully about where you invest, as there are risks you need to consider. The value of an investment can fall as well as rise and isn’t guaranteed. You may get back less than the amount originally invested. If you’d like some help with your investment choices you should speak to a financial adviser.
There are three main charges that might be taken from your plan:
- Service charge – the administration charge we take to cover the cost of setting up and administering your plan. We’ve agreed a yearly service charge of 0.19%. There is a charges cap should your pension pot grow to £250,000 or more. Meaning your yearly service charge reduces, in percentage terms, as the value of your assets in your ARC account increases*. Find out more about how your overall service charge will reduce once your fund value reaches £250,000.
- Investment charges – these charges are applied by the investment managers and are detailed on the investment list and on fund factsheets. The Aegon Growth Tracker (Flexible Target) fund, which is your scheme's default fund, has an investment charge of 0.05% per annum.
- Personal adviser charges – if you have your own financial adviser, these are the charges you’ll have agreed with them for any advice they've given you.
You can read more about charges and how they’re applied on our website. Charges may change in the future.
* We’ll include the value of any other eligible Aegon pension products you have. For example, if you have an existing Aegon personal pension valued at £200,000, as well as £50,000 of assets held on ARC, they’d calculate the level of your annual charge based on a total fund value of £250,000.
Paying your charges
0.25% of each contribution will be invested in a cash account called the ‘cash facility’. We’ll hold some of your contribution as cash to pay service charges, and make any other payments. Holding a small amount in cash means we don't usually have to sell units in your chosen investment funds every time a payment is due. Investment charges are taken directly from the investments you hold, and not from a cash facility.
If you’re not already a member of the scheme and are new to easyJet, you’ll be automatically enrolled into the Scheme in your third pay period as detailed in your contract. You can ‘opt in’ to the Scheme before this date by contacting firstname.lastname@example.org
What is meant by enrolling automatically?
To encourage more workers to save for their future, the government has introduced rules. Employers now have to:
- automatically enrol all eligible workers into a pension scheme, and
- make relevant contributions into their pension plan where applicable.
Therefore by law easyJet must place most of their employees into a qualifying workplace pension scheme (a workplace pension scheme that meets legal standards set by the Government) and make a minimum level of contribution. This is known as ‘automatic enrolment’. You can find out more about auto enrolment(Opens new window) on The Pensions Regulator website.
If you don’t want to be a member of the Scheme, you can ‘opt out’ – that is, cancel your policy. If you do this within one month of us sending you the scheme details, you and easyJet stop contributing to the Scheme and you’ll receive a refund of any contributions paid from your salary to the Scheme in the next available payroll run.
If you opt out you’ll lose easyJet’s contributions and won’t be building up Scheme benefits for your retirement.
If you opt out or stop contributions to the scheme – but stay with the same employer – current rules state that your employer must automatically enrol you again, usually every three years (as long as you still meet any joining conditions). easyJet will tell you if this happens. You’ll be able to opt out again if you still don’t want to be a member of the scheme.
Can I transfer and consolidate benefits from other existing retirement savings?(Expand content) (Minimise content)
If you have other savings elsewhere, perhaps in a pension scheme from a previous employer, or your own personal pension or ISA, you may be able to transfer these onto ARC. The obvious benefit of bringing all your retirement pots together is that you’ll be able to manage them all in one place.
If you’re thinking about transferring benefits, you should consider what you may be giving up under your existing arrangement, for example, you may have certain guarantees. There’s lots to consider and transferring may not be suitable for everyone so you should speak to a financial adviser.
Visit our combining your pensions web page for more information.
If you die before taking your benefits the fund you’ve built up to the date of your death would be payable to your beneficiaries as a cash lump sum and is usually tax-free.
It’s important you fill in an Expression of wish form (PDF)(Opens new window) to tell us who you’d like us to pay any lump sum death benefit to (known as nominating a beneficiary).
Equally, if your personal situation changes, for example, you marry, divorce or become a parent, you may want to update your form. Once completed, please send the form directly to Aegon at Platform Client Services, Aegon, Edinburgh Park, Edinburgh EH12 9SE.
You’ll be able to log in to your Retiready account and easily see the value of your savings at a glance.
Retiready lets you view and manage your workplace retirement savings from an easy to use online account. Similar to online banking you’ll be able to see an overview of recent transactions and any investment growth, on your mobile, tablet or laptop, when it suits you. It gives you a complete picture of your retirement savings in a way that's visual and easy to understand.
It provides education and personalised coaching to help you become more knowledgeable about saving for retirement, so that you can make informed choices and take greater control of your financial future.
Retiready gives you access to a range of digital tools. You can start by using ‘score’ – which helps you understand how ready for retirement you are by giving you a ‘score’, based on answering a few simple questions. Then you can use the other tools to set yourself goals and track your progress towards being ready for retirement.
We’ll also send you a yearly statement.
Retiready is the main system you’ll use, however you may need to log in to ARC (a separate transactional tool) to do certain transactions, such as changing investment or paying a single contribution.
You can find out more about what you can do on Retiready and what you do on ARC in this useful guide - Managing your retirement savings has never been easier(Opens new window).
It’s your plan — you own it and it’s in your name for you to keep, even if you leave the company. You can:
- continue to contribute to the plan;
- stop paying contributions and leave your benefits where they are. Stopping contributions to your plan could affect the final amount of your savings, or
- take it with you to any scheme offered by a new employer at no additional cost — but you should get financial advice at the time and consider what benefits your new employer offers.
If you leave it with Aegon you’ll continue to receive the same service charge and you’ll be able to continue to use Retiready to monitor your Score and use Coach to help keep you on track.
easyJet has set the ‘default’ target retirement age as 65.
However, you can choose to take an income from your retirement savings any time from age 55, which is currently the minimum age you can receive your benefits (although you can take them earlier if you’re in ill health).
The minimum age is increasing to 57 from 2028 and will go up after that in line with your State Pension age(Opens new window)(Opens new window).
If you were part of the old scheme prior to 1 October 2017 and you’d already changed it from the scheme’s default age it will be carried over to your new plan.
You can find more information(Opens new window) on our website.
You may wish to speak to a financial advisor to discuss this further. The Money Advice Service can provide help in how to choose an IFA(Opens new window) if you don’t already have one.