Building pension

The YCBPS is a defined benefit scheme, which means you build up pension benefits every year you’re a member of the Scheme.

The way your pension builds up can be split into three main parts:

Part 1
Pension built up to 31 March 2006 – final salary.

For service up to 31 March 2006 your pension is calculated as 1/60^th of your final pensionable salary times your pensionable service to that date.

Part 2
Pension built up from 1 April 2006 to 31 March 2012 – career average revalued earnings (CARE).

For each year of service between 1 April 2006 and 31 March 2012 your pensionable service will earn a ‘block’ of pension of 1/60^th of your pensionable salary for that year. The pension block built up each year is then revalued annually for each year of active membership in line with RPI.

Part 3
Pension built up from 1 April 2012 onwards – CARE.

The block of pension you earn for each year of service from 1 April 2012 will depend on your current chosen contribution rate, which governs the amount of contributions deducted each month from your salary and paid into the scheme.

For each year of service from 2012 your pensionable service will earn a block of pension of either 1/60^th or 1/80^th of your pensionable salary depending on your chosen contribution rate.

If you pay contributions at the higher rate of 24%, you’ll continue to build up your benefits at 1/60^th rate. If you elected to make contributions at the reduced rate of 15%, you’ll be building up benefits at a reduced rate of 1/80^th. Each block will be increased to retirement in line with Consumer Price Index (CPI) inflation each year but capped at 5% per annum and added together to give your total pension for this period of service.

As long as you have at least two years’ qualifying service you’re entitled to a preserved pension, which would be payable in full from age 65. If you choose to take your pension between 60 and 65 there’ll be no reduction applied for early payment for any pension built up to 31 March 2006 but the Bank’s current policy is that a reduction is applied for pension built up from 1 April 2006 to reflect early payment before age 65.

Your preserved pension will increase between the date of leaving and the date of retirement; under current legislation the increase rate is approximately equal to CPI up to a maximum of 2.5% per annum for most members.

Your pension will be calculated in the same way as active members but using service to your date of leaving only.