Date: 10 June 2010
Here are some of the most popular questions that Usdaw members at Boots and Alliance Healthcare have been asking us
Should I join the new Boots pension?
Usdaw recommends to our members that they do
join the new Boots pension.
If you don’t join then you don’t qualify for
the contribution that Boots make towards your pension
savings. This is the same as turning down extra pay albeit
extra pay put to one side for when you retire.
Also, if you don’t join then your dependants
(spouse, partner, children) won’t be eligible to receive the 4
times salary lump sum payable if you die whilst employed by
How much should I contribute to the new Boots
Ultimately it is for you to decide how much to
contribute depending on how much you can afford. Obviously,
the more you contribute the larger your pension and lump sum will
be when you retire. There are certain factors you should be
aware of depending which pension scheme you were in before.
Former members of the Boots Pension
Scheme (the final salary scheme) should be aware that on
switching to the new pension you will no longer be contracted out
of the Additional State Pension scheme. This means you will
be paying an extra 1.6% National Insurance. If you carry on
contributing at the rate of 8% to the new pension scheme you might
end up with less net pay (after deductions) than usual.
The same also applies to anybody who was
contributing to the UniChem Benefit Plan and to
those people who were contributing to the UniChem
Contribution Plan who voluntarily opted to contract out of
the Additional State Pension.
If you are unsure how much to contribute, we
suggest you choose what you think you might be able to afford
between 3% and 6% and see what the effect is on your first few pay
checks after the switch to the new plan. Remember that you
can increase or decrease how much you contribute at a later
Anybody who was contributing to either of the
Boots Stakeholder plans or who were contributing
to the UniChem Contribution Plan and didn’t
voluntarily opt to contract out of the Additional State Pension
will see no change in the amount of NI they pay and can carry on
contributing at the same rate as before.
How should I choose to invest my contributions to the
new Boots pension?
Again, it is up to you to decide.
Are you confident enough to be able to select
which funds from the available list you want to invest your money
in? Will you be able to keep a close eye on how those
investments perform so that if any of them don’t perform as well as
they should be doing, you can act by switching the money
If the answer is yes then you should read the
information you’ve been provided about all the various funds
available, make your choice and select which one(s) you want.
If you’re not confident enough to do the above
and would rather leave it to the experts to invest your money for
you then you might consider opting for what is called the Default
Lifestyle fund. In this fund your money is initially invested
mostly in stocks and shares in the UK and overseas then, as you get
closer to retirement age, is automatically switched into less
volatile investments instead (such as cash deposits and government
bonds). You won’t have to do anything. It’s fair to say
that in most pension schemes like this the majority of people opt
for the Default Lifestyle approach.
What should be my target retirement age?
This is the date you intend to retire or start
receiving your retirement benefits. You should be realistic
about what age you choose. For a start it’s not possible to
receive your retirement benefits earlier than 55. Whatever
age you put down isn’t binding on you – you won’t be dismissed at
that age for selecting it on your form. It’s only to give the
pension provider an indication of when you want to start receiving
your benefits so they can contact you nearer that time. You
can always change your target retirement age at a later date.
If you select the Default Lifestyle fund described in (3) above
then you should definitely make sure you keep your target
retirement age updated if you change your plans especially if you
decide you want to receive your benefits earlier than first
Who should I nominate to be my beneficiary if I die
whilst working for Boots?
This can be anybody you like depending on your
circumstances. It doesn’t all have to be left to one
person. The money can be split between numerous people as
long as all the different shares add up to 100%.
If your circumstances change you can fill in a
new nomination form which overrules the one you’ve already filled
in. Make sure you update your nomination form if your
What is SMART Pensions and should I be doing
Click here to access or guide to SMART Pensions
including details of who should and should not participate in
Should I transfer my old Boots pension into the new
If you were contributing to either the
Boots Pension Scheme (the final salary scheme) or
the UniChem Benefit Plan, we would caution you
against transferring the pension benefits you have built up into
the new plan (or indeed to any other pension). You have a
guaranteed amount of pension built up in these schemes but when you
transfer you lose all guarantees of how much you will receive when
There is less risk involved for members of the
Boots Stakeholder plans or UniChem
Contribution Plan but we would still advise you to take
independent, professional financial advice before you start
transferring money between pension schemes.
You can find financial advisers in your local
area at http://www.unbiased.co.uk/.
Can I carry on paying Additional Voluntary
AVCs should automatically stop being deducted
from your pay at the same time as the Boots Pension
Scheme and UniChem Benefit Plan both
close. In the new plan there is no need to pay AVCs since you
have the option of increasing (or decreasing) how much you want to
contribute towards your pension.
Any other questions?
Usdaw members can contact the Union’s pensions
team on 0161 249 2440 or email firstname.lastname@example.org.