LEAVING EMPLOYMENT
For MNRPF
Members who were contributing up to closure
This section contains detailed information.
If you prefer to read it on paper, please click
here.
Background Information
Basic Options
Changing Employers
Unemployment
Death Benefits
What Action Should You Take?
1. Background Information
The
Merchant Navy Ratings Pension Fund ("MNRPF") closed on 31 May
2001. After that date, you paid no further contributions and no further
service counted towards your MNRPF pension.
You were sent a statement showing your MNRPF pension as at 31 May 2001.
That pension will be increased ("re-valued") over the period
up to retirement. The rate of increase depends on the revaluation option
chosen which is also shown on your statement.
Two rates of re-valuation were possible:
Section 148: Pension will increase in line with the National Average Earnings
Index
LPI7: Pension will increase in line with the Retail Prices Index, but
with an upper limit of 7% pa.
If you cease to be eligible for either of the above revaluation rates
(as explained in sections 3 and 4 below) then the rate to apply would
be:
LPI5: Pensions will increase in line with the Retail Prices Index, but
with an upper limit of 5% pa.
Please note that all these rates cease to apply once you retire. Pensions
earned after 5 April 1997 must by law increase on an LPI5 basis once they
have come into payment (subject to an exception for pensioners aged less
than 55 who retired in good health). The law also provides for increases
on GMPs when they have come into payment. Otherwise, pension increases
in retirement are declared at the discretion of the MNRPF Trustees and
depend on there being surplus assets. As the MNRPF is in deficit, there
are no surplus assets and no increases in retirement will be possible
(except for the increases on certain benefits which are required by law)
whilst it remains in deficit.
2. Basic Options
On leaving employment you can:
- leave your pension in the MNRPF
- If you are 58 or over, take an early retirement pension
- If you were a contributing member for under 2 years, you may be able to have a refund of contributions.
(a) Leaving your pension in the MNRPF
Your pension will increase up to retirement by the revaluation rate that applies to you. Your pension will normally be payable at age 62. The Trustees can allow a pension to be taken before age 62 (currently, this is allowed from age 58) but there would be a reduction because the pension would be paid for longer.
You can transfer the value of your pension to another pension arrangement (if, for example, you join a new employer's pension scheme) but you should bear in mind that such transfer values are currently reduced because of the funding shortfall in the MNRPF (i.e. you would not have the full value of your benefits).
(b) Early Retirement
If you have already reached age 58 you can have your pension immediately. If you want to know how much the pension will be, you should write to MNPA asking for figures and saying when you want to retire.
An early retirement pension is calculated by taking the pension you would normally receive from age 62 and spreading it over the longer period from the early retirement age. An early retirement pension therefore has the same financial value as a normal pension from age 62 but it is lower because it is paid for longer.
(c) Refund of Contributions
This only applies if you joined the MNRPF on or after 1 June 1999, so that you contributed for less than 2 years up to the date of closure on 31 May 2001. It also only applies if you cease to be eligible for Section 148 or LPI7 revaluation (see sections 3 and 4).
If it does apply, you can if you wish have your own contributions refunded, less certain deductions relating to State pensions and tax. If you do have a refund, you are no longer entitled to your pension in (a) or (b) above. Note that you do not have to have a refund; the options under (a) and (b) above are still open to you.
Your MNRPF benefits can be affected in different ways according to which new employer you join. Your new employer could be a company that:
A. Belonged to the MNRPF and
(i) contributed up to the date of closure
(ii) stopped contributing before the date of closure
OR
B. Did not belong to the MNRPF
(iii) is in shipping
(iv) is not in shipping
A. Companies that belonged to the MNRPF
If you continue in seagoing employment with a new employer that has belonged to the MNRPF, then your pension will continue to be increased by either Section 148 or LPI7 revaluation. If not, then these rates of revaluation will cease and, from that time, LPI5 will apply instead.
You must tell MNPA who your new employer is so that we can revalue your pension at the correct rate.
You may have been contributing to the Merchant Navy Ratings Pension Plan ("MNRPP" - the new scheme set up when MNRPF closed) with your previous employer. Alternatively you may have been contributing to an equivalent scheme set up by your employer (Note 1). If your new employer belongs to MNRPP (or has an equivalent scheme), then you can continue or start contributing to it. However, you must tell your new employer that you are a member of MNRPF and show the employer a copy of your benefit statement. The statement shows what revaluation method applies to you (Section 148 or LPI7). Your new employer should take the following action:
Section 148: The new employer pays 2% of your pensionable pay (less the National Insurance Lower Earnings Limit) to the MNRPF. If the new employer belongs to MNRPP or has an equivalent scheme the contribution to the MNRPP or equivalent scheme will be reduced by 2%.
LPI7: The new employer must belong to the MNRPP or have an equivalent scheme under this option. No contributions are due to MNRPF and the full contribution is paid to MNRPP (or equivalent scheme).
If your statement says LPI7 but your new employer does not belong to MNRPP (or equivalent scheme) then your revaluation rate has to change to Section 148. You must tell MNPA about changes in employment so we can follow them through with the employer if necessary to ensure any contributions required from the employer are paid and that we correctly record your revaluation rate.
NOTE 1: Equivalent schemes are run by: Stena Line Ltd / Stena Line Pte / Invicta Marine Ltd / P & O Cruises (Bermuda) Ltd. Members who were not contributing to MNRPP or the equivalent schemes of the above employers may have been contributing to another scheme set up by their employer. In this case you will be classified as Section 148.
B Companies that have not belonged to the MNRPF
If you join a new employer that has never belonged to the MNRPF, then your special rate of revaluation will no longer apply. Instead your pension will be revalued at the LPI5 rate mentioned above.
This applies if you leave the sea to work on shore and also even if your new employer is in shipping and you continue to work as a seafarer.
If, at some later date you move employments again to another employer who does belong to the MNRPF, your special revaluation rate would not resume - you would stay on the LPI5 rate.
4. Unemployment
After leaving your employment, you may have a period when you are unemployed before you join a new employer. If so, provided the period is less than 12 months, the information under Section 3: Changing Employers, applies just the same.
Once the 12 months is exceeded, the special revaluation rate ceases and reverts to the LPI5 rate. If you obtain seagoing employment with an MNRPF employer subsequently, you would stay on the LPI5 rate.
Please ensure you tell MNPA if you are unemployed for more than 12 months.
Just to remind you that the lump sum death benefit of 2 times salary that the MNRPF provided when you were contributing stopped at 31 May 2001. If you joined the MNRPP (or equivalent scheme), then a similar benefit should be provided (but check with the MNRPP or other scheme). However, if you have now left the MNRPP (or equivalent scheme) you will no longer be covered.
If you are concerned about lump sum death benefit cover, you may wish to contact the Personal Financial Planning Service at MNPA who will see what your circumstances are and whether they can assist.
6. What Action Should You Take?
On leaving your employer, you should proceed as follows:
- If you are 58 or over and want to retire, go to the Administration section and contact MNPA.
- If you join a new employer within 12 months
- Check if your new employer is on the list in the Appendix
- Ask your new employer if they belong to the MNRPP or run an equivalent scheme
- Show your benefit statement to your new employer so they know if you are "Section 148" or "LPI7"
- Return
the Employment Change Form to MNPA with details of your employment change
-If you are unemployed for 12 months, tell MNPA on the Enquiry Form
-If you joined MNRPF after 1 June 1999, you may be able to have a refund of part of your contributions. To find out, contact MNPA on the Enquiry Form
-If you are concerned about not having any death benefit cover, contact the Personal Financial Planning department at MNPA. Their telephone number is 01372 200300 or email is pfp@mnpa.co.uk