RHM Pension Plan 35 and Plan 45 - RHM Pension Scheme - UK.com

A guide to
RHM Pension Plan 35 and Plan 45
for employees who joined the Company before 1st October 2001

This booklet is intended for any eligible employee joining
or thinking of joining The RHM Pension Scheme who
started employment with an RHM group company
BEFORE 1st OCTOBER 2001.
In certain areas, different terms apply to eligible
employees joining The RHM Pension Scheme who
started employment with an RHM group company
AFTER this date. A different Explanatory Guide is
available for these employees.

Summary of the Plans 4
How the Plans work 6
The State Pension Scheme 8
Joining the Plans 10
Contributions 12
Additional Voluntary
Contributions 14
Your pension 16
Tax-free cash sum 18
Early and late retirement 20
Retirement due to ill-health 22
Death in service 24
Contents
Introduction
3
26 Death after retirement
28 Pension increases
29 Leaving the company
32 Opting out of the Plans
33 Absence from work
34 Switching
36 Tax and legal matters
38 Legal safeguards
40 Useful addresses
41 Membership Application Form
43 Expression of Wish Form
1

2
Plan 35 and Plan 45 provide different levels of benefits within
a single scheme called The RHM Pension Scheme.
The RHM Pension Scheme
Plan 35 Plan 45
The two Plans are “final salary” arrangements and both offer the
same range of benefits for you and your family. However, Plan 45
provides larger benefits in return for which you pay more. The
benefits provided by both Plans include a defined level of pension
related to your earnings near to retirement, an ill-health pension
should you have to retire on health grounds, and benefits for your
dependants in the event of your death.
This booklet explains how the Plans work and describes the main
benefits provided for new members joining Plan 35 or Plan 45
who started employment with the RHM group of companies
before 1st October 2001.

Introduction
◆ Alternatives
Although it is not compulsory for
you to join one of the two Plans, the
law requires you to be in some form
of pension scheme. One alternative
is to be in the earnings-related part
of the State Pension Scheme –
currently called the State Earnings-
Related Pension Scheme (SERPS)
but to be replaced from April 2002
by the new State Second Pension.
The other option is to arrange your
own personal pension or stakeholder
pension.
If you do not join Plan 35 or
Plan 45 or arrange your own
personal or stakeholder pension, you
will be included automatically in the
earnings-related part of the State
Pension Scheme. However, this
option is not free, since being in it
means that you have to pay National
Insurance contributions at a higher
rate.
◆
◆
Contracted-out of
State Scheme
As a member of Plan 35 or Plan 45,
you will be contracted-out of the
earnings-related part of the State
Pension Scheme. This means that
you do not earn any SERPS benefit
or, from April 2002, a State Second
Pension while you are a member of
the Plan and, as a result, you pay
National Insurance contributions at a
lower rate. Contracting-out,
however, does not affect your State
Basic Pension entitlement.
Tax reliefs and
benefit limits
The RHM Pension Scheme is
approved under the terms of the
Income and Corporation Taxes Act
1988, which means that it enjoys
significant tax advantages. In
addition, both the Plan members and
the company receive immediate full
tax relief on their contributions to
the Scheme. In return for these
reliefs, the Inland Revenue imposes
certain limits on the benefits which
may be paid.
◆ AVCs
Members of both Plans are able to
pay Additional Voluntary
Contributions in order to earn extra
pension benefits.
◆
Summary of benefits
There is a summary of Plan 35 and
Plan 45 on the next two pages and
several examples throughout the
booklet which illustrate how the
Plans work.
3

Eligibility 10
◆
4
◆
◆
◆
Summary of the Plans
The RHM Pension Scheme, covering Plan 35 and Plan 45, is summarised below. If you would like more information
about a particular topic, please refer to the pages shown.
On completion of three months’ continuous service,
membership of the Plans is open to all permanent
employees aged between 16 and 65.
Contributions 12
You pay contributions at the following rates:
Plan 35: 3 1 /2% of Pensionable Earnings.
Plan 45: 5% of Pensionable Earnings.
You receive full tax relief automatically.
Your employing company pays the balance of the cost of
all the benefits provided by the Plans.
Pensionable Earnings 12
There are two alternative definitions of Pensionable
Earnings and you can choose which of these definitions
your contributions and benefits will be calculated on.
If you choose the “full earnings definition” of
Pensionable Earnings, you will pay higher contributions
than if you choose the “LEL definition” and, in return,
you will be building up a bigger pension. A number of
other benefits provided by the Plan will also be larger if
you choose the “full earnings definition”.
Additional Voluntary Contributions 14
You may pay Additional Voluntary Contributions in order
to increase your benefits at retirement. AVCs enjoy certain
tax advantages over other forms of voluntary saving.
◆
◆
◆
Pension 16
Normal Pension Age is 65.
You will earn pension at the following rates:
Plan 35: 1/80th of Final Pensionable Earnings for each
year of Pensionable Service in Plan 35.
Plan 45: 1/60th of Final Pensionable Earnings for each
year of Pensionable Service in Plan 45.
Tax-free cash sum 18
You may have the option to exchange part of your
pension at retirement for a tax-free cash sum.
Early retirement 20
With your employing company’s agreement, you may
retire from service at any time between the ages of 60
and 65 and receive an immediate pension based on your
completed Pensionable Service, with no reduction for
early payment.
OR
If you retire, with your employing company’s agreement,
at any time between the ages of 50 and 60, you will
receive an immediate pension based on your completed
Pensionable Service, but in this case your pension will be
reduced by 4% for each year before age 60.

Retirement due to ill-health 22
◆
◆
◆
If you have to retire early because of ill-health or
incapacity, you will receive an immediate pension. The
size of the pension will depend on whether you are
partially or totally incapacitated.
Death in service 24
If you die in service, a tax-free lump sum is payable to
your dependants as follows:
Plan 35: Twice your annual earnings.
Plan 45: Three times your annual earnings.
PLUS
A refund of your contributions is payable, also tax-free.
PLUS
A widow’s or widower’s pension is payable.
PLUS
Children’s allowances are payable.
Death after retirement 26
Payment of your pension is guaranteed for life. If you die
within five years of retiring, the unpaid balance of five
years’ pension payments is payable to your dependants as
a tax-free lump sum.
PLUS
A widow’s or widower’s pension is payable.
PLUS
Children’s allowances are payable.
◆
◆
◆
Pension increases 28
The Company and the Trustees increase pensions in
payment annually.
Leaving the company 29
If you leave the company, you have the following
options under both Plans:
EITHER
A deferred pension payable from Normal Pension Age.
OR
A transfer of the value of your deferred pension to
another employer’s pension scheme or to an individual
pension policy.
OR
An immediate pension if you are aged 50 or over when
you leave.
Switching 34
You may normally switch up from the “LEL definition”
of Pensionable Earnings to the “full earnings definition”
or from Plan 35 to Plan 45 at any time.
5

◆
6
How the Plans work
Security of separate
trust fund
The Plans are set up under trust law
and their finances are quite separate
from those of the Principal
Company (RHM Limited). All the
contributions from the members and
the company are paid into a trust
fund. The fund is kept quite separate
from the assets of the Principal
Company to provide security for the
benefits of members of the Plans and
their dependants.
Members’ contributions are
deducted from earnings by their Pay
Office and passed, together with the
company’s contributions, to the
Trustees. The total contributions are
used to buy a wide range of
investments which produce the
income and capital growth out of
which the benefits are paid. All the
benefits defined in the Rules of the
Plans are financed in this way.
◆
Trustees and
administration
RHM Pension Trust Limited is the
corporate trustee of The RHM
Pension Scheme and holds all the
investments of the Scheme on behalf
of the members. The directors of this
company act as Trustees of the
Scheme and they are responsible for
seeing that the interests of members
of Plan 35 and Plan 45 are protected.
There are nine Trustees, four of
whom are appointed by RHM
Limited and four of whom are
appointed from amongst the
membership of the Plans. The ninth
Trustee is the external independent
Chairman of the Trustee Board, who
is appointed by the Trustee Board.
Administration of Plan 35 and
Plan 45 is delegated by the Trustees
to RHM Pension Services Limited.
The Pensions Manager is recognised
by the pension authorities as the
Administrator of the two Plans.
◆
Trust Deed and Rules
The Trustees must administer the
Plans in accordance with a set of
legal documents called the Trust
Deed & Rules. These documents
must satisfy certain legislative
requirements and meet Inland
Revenue conditions. You may see a
copy of them by arrangement with
your Pensions Liaison Officer or
your local Personnel or Pay Office.
By mutual agreement, the
Trustees and the Principal Company
have the power to amend the Trust
Deed & Rules. However, no
amendment can be made which
would adversely affect the benefits
which members had earned up to
the date of the amendment.

◆
The actuary and
other advisers
The Trustees have appointed an
actuary to check the level of funding
of the Plans at regular intervals and
to calculate the contributions which
the company should pay in order to
support the benefits to be provided.
The Trustees also use the
services of solicitors, bankers,
auditors, investment managers and
other advisers as appropriate.
◆
Internal disputes
procedure
The Trustees aim to deal with any
complaint from a member promptly
and fairly. Most disagreements are
settled quickly. Very occasionally,
however, this is not the case and in
this event any member who has a
grievance related to either of the
Plans should write to the Secretary
to the Trustees in the first instance
with full details of the complaint.
The Secretary will investigate the
complaint thoroughly and respond to
the member.
If it is not possible to resolve the
matter at this level, the member can
lodge a written appeal with the
Chairman of the Trustees. All
communication should be sent to
RHM Pension Services at the address
shown on page 40.
A copy of the internal disputes
procedure is available on request
from RHM Pension Services.
The member also has recourse to
an external disputes procedure which
is in the hands of the Office of the
Pensions Advisory Service (OPAS)
and the Pensions Ombudsman (see
page 40).
◆
External supervision
The Plans must comply with a
number of statutory requirements in
relation to matters like tax approval,
contracting-out, and disclosure of
information.
Supervision in these areas is
exercised by the Pension Schemes
Office of the Inland Revenue, the
Department for Work and Pensions
and the Occupational Pensions
Regulatory Authority (OPRA).
7

Two-part pension
◆
8
◆
◆
The State Pension Scheme
There are two parts to the State Pension Scheme:
◆ The State Basic Pension Scheme.
◆ The State Earnings-Related Pension Scheme (SERPS), which will be
replaced, from April 2002, by the State Second Pension.
State Pension Age
State pensions are payable from State Pension Age which is currently 65 for men
and 60 for women but which will be equalised at 65 for both. This change will
be phased in over a 10-year period from the year 2010 with the following effect:
All women born before
6th April 1950
Women born between
6th April 1950 and
5th April 1955
All women born after
5th April 1955
Example For a woman who was born on 5th July 1953, her birthday falls 3 years (36
months) and 2 full months after 5th April 1950, so she will start to receive her State
pension from 6th September 2016, i.e. at age 63 years and 2 months.
State Basic Pension
Will still get their State pension at age 60
Will receive their State pension between age
60 and 65. Add one month to age 60 for each
month or part-month that their date of birth
falls after 5th April 1950
Will get their State pension at age 65
The State Basic Pension is a flat-rate amount paid to everyone who has a full
National Insurance contribution record. If you do not have a complete record,
you may be entitled to a proportion of the full State Basic Pension.
◆
For 2001/2002, the full State Basic
Pension is:
£72.50 a week (£3,770 a year)
for a single person and
£115.90 a week (£6,026.80 a
year) for a married couple.
You can obtain a forecast of
how much pension you are likely to
receive from the State. This can be
done at any time by completing
Form BR19, available from your
local Benefits Agency office or
on-line at www.dss.gov.uk (click on
the “Pensions and retirement” section).
Women paying
reduced
NI contributions
If you are a married woman or
widow who, prior to April 1977,
elected to pay National Insurance
contributions at the special reduced
rate, you will not earn any State
Basic Pension in your own right
(although your husband may be
entitled to an additional State
pension for you). You will,
however, qualify for the full range of
benefits from The RHM Pension
Scheme, as described in this booklet.

◆
State Earnings-Related Pension and
State Second Pension
SERPS is an additional State pension based on earnings. From 6th April 2002,
SERPS is due to be replaced by the State Second Pension, which will provide
larger benefits than SERPS for lower paid people.
The RHM Pension Scheme is contracted-out of SERPS/the State Second
Pension. This means that you do not earn any SERPS benefit or State Second
Pension while you are a member of Plan 35 or Plan 45 and, as a result, you pay
a lower rate of National Insurance contributions.
From 6th April 2001, this rebate in your National Insurance contributions
amounts to 1.6% of your earnings between £87 and £575 a week if you are
weekly paid, or between £377 and £2,492 a month if you are monthly paid.
◆ Contracting-out
In order to be able to contract-out, The RHM Pension Scheme must meet
certain statutory requirements.
From 6th April 1997, The RHM Pension Scheme has been contracted-out
on what is called the “protected rights” basis. What this means is that, for
Pensionable Service after 6th April 1997, Plan 35 or Plan 45 will provide a
pension at retirement equal to:
◆ Either your entitlement under the Plan (calculated according to the formula
described in this booklet).
◆ Or, if it is higher, the pension which could be purchased at retirement with
the sum of money accumulated from the employer and employee National
Insurance rebates and any employee contributions to the Plan (in excess of
the National Insurance rebate) as required by the contracting-out
regulations.
A ‘notional’ rate of return will be used for this purpose which will be based
on the investment returns of the Scheme.
You will be advised, at retirement, if this basis applies to you and what effect,
if any, it may have on your benefits.
◆
State Basic Pension
not affected
Contracting-out does not affect your
entitlement to the State Basic
Pension.
9

◆ Eligibility
You may join Plan 35 or Plan 45,
regardless of the number of hours
you work, provided that you meet
the following conditions:
10
Joining the Plans
Plan 35 and Plan 45 provide different levels of benefits. Although Plan 35 costs less than Plan 45 and may,
therefore, appeal more to younger employees, you have a completely free choice as to which Plan to join.
◆ You are a permanent employee.
◆ You are aged between 16 and
65.
You will be eligible to join either
Plan on the 6th of the month
following completion of three
months’ continuous service.
◆ Membership
Application Form
If you want to join Plan 35 or
Plan 45, you should complete a
Membership Application Form,
which you will find at the back of
this booklet, and return it to your
Personnel or Pay Office.
◆ Membership
Certificate
Once your Membership Application
Form has been received by RHM
Pension Services, you will be sent a
Membership Certificate confirming
your membership of the relevant
Plan.
◆
If you do not join
If you decide not to join either
Plan 35 or Plan 45 when you first
become eligible to do so, you will
only be able to join later if your
employing company and the
Trustees agree. The Trustees may
then ask for evidence of your health
and may restrict certain benefits if
you are in poor health.

◆
Expression of Wish
Form
As a member of Plan 35 or Plan 45,
you are covered for a lump sum
death benefit (see page 24).
In order that this lump sum can
be paid free of tax, the Trustees have
discretion in deciding who should
receive it. However, they will be
guided by your wishes in this regard
and you should complete an
Expression of Wish Form, which
you will find at the back of this
booklet, to indicate who you would
like to receive this benefit.
If your personal circumstances
change - for instance, if you marry
or have a child - and you change
your mind as to who you would like
to receive this benefit, you should
complete a new Expression of Wish
Form.
If you do not join Plan 35 or
Plan 45, you will be covered for a
smaller lump sum death benefit (of
one year’s pay), so you too should
complete an Expression of Wish
Form.
◆ Transfers-in
With the Trustees’ agreement, both
Plans are able to accept the transfer
of benefits from any previous,
suitably approved, pension
arrangement of which you have been
a member.
Whether this transfer will be to
your advantage will depend on the
terms offered and you should obtain
all the relevant facts before making a
decision. If you are interested in a
transfer, you should complete a
Transfer-In Quotation Request
Form, giving as much detail as
possible about your previous pension
arrangement. You will then be
provided with details of the
additional benefits you would be
credited with in the Plan, in return
for the transfer payment.
11

Your contributions
◆
12
Contributions
As a member of Plan 35 or Plan 45,
you pay contributions at the
following rates:
PLAN 35: 3 1/2% of Pensionable
Earnings.
PLAN 45: 5% of Pensionable
Earnings.
Members of Plan 35 and Plan 45 are
offered a choice of definitions of
Pensionable Earnings for calculating
both their contributions and their
benefits.
Plan 35 Plan 45
Weekly earnings £400 £400
Less Lower Earnings Limit £ 72 £ 72
Equals Pensionable Earnings £328 £328
Contribution rate x 31 /2% x 5%
Therefore, you would pay £11.48 £16.40
◆
Pensionable Earnings
Pensionable Earnings are:
◆ Either: Your weekly or monthly earnings (excluding non-contractual bonuses,
temporary payments and allowances) above the Lower Earnings Limit.
This definition of Pensionable Earnings is called the “LEL definition”.
The Lower Earnings Limit is set by the Government in April each year and is
an amount approximately equal to the State Basic Pension. For 2001/2002 the
Lower Earnings Limit is £72 a week or £312 a month (£3,744 a year).
◆ Or: Your full weekly or monthly earnings (excluding non-contractual
bonuses, temporary payments and allowances).
This definition of Pensionable Earnings is called the “full earnings definition”.
If you choose the “full earnings definition” of Pensionable Earnings, you will
pay higher contributions than if you choose the “LEL definition” and, in return,
you will be building up a bigger pension. A number of other benefits provided by
the Plan will also be larger if you choose the “full earnings definition”.
Example Let us assume that you are earning £400 a week (equivalent to £20,800 a year). The contributions you pay will depend on
which Plan you are in and which definition of Pensionable Earnings you choose.
◆ LEL definition
For 2001/2002, the weekly LEL deduction is £72 a
week, so your Pensionable Earnings and weekly
contributions would be:
◆ Full earnings definition
On this definition, your Pensionable Earnings would
be the same as your weekly earnings and so your
weekly contributions would be:
Plan 35 Plan 45
Weekly earnings £400 £400
Contribution rate x 31 /2% x 5%
Therefore, you would pay £14 £20

Tax relief
◆
◆
Full tax relief is allowed on your contributions (at your highest rate of tax) at the
time they are paid since they are deducted from your pay before tax is
calculated.
Lower National Insurance contributions
Don’t forget that your National Insurance contributions will be lower as a result
of being contracted-out of the earnings-related part of the State Pension
Scheme.
Example Based on the same earnings figure as in the previous example but after allowing
for the income tax you save on your contributions (assuming that you pay tax at the
standard rate of 22%) and also for the saving in National Insurance contributions, the net
weekly cost to you on the two alternative definitions of Pensionable Earnings would be:
◆ LEL definition
Plan 35 Plan 45
Plan contribution £ 11.48 £ 16.40
Less Tax relief (at 22%) £ 2.52 £ 3.61
Less NI saving (£313* x 1.6%) £ 5.01 £ 5.01
Net weekly cost £ 3.95 £ 7.78
◆ Full earnings definition
Plan 35 Plan 45
Plan contribution £ 14.00 £ 20.00
Less Tax relief (at 22%) £ 3.08 £ 4.40
Less NI saving (£313* x 1.6%) £ 5.01 £ 5.01
Net weekly cost £ 5.91 £10.59
* £400 less £87 (the lower earnings threshold for the purposes of calculating the
NI rebate).
◆
◆
Additional Voluntary
Contributions
You may, if you wish, pay
Additional Voluntary Contributions
(AVCs) in order to increase your
benefits at retirement. For further
details, see the next page.
The company’s
contributions
While you pay a fixed rate of
contributions to the Plan, your
company pays the balance of the
cost of providing all the benefits
defined in the Rules.
It is the job of the independent
actuary appointed by the Trustees to
check the level of funding of the
Plans and to advise on the
contributions your company should
pay to support the benefits. These
contributions may go up or down
from time to time depending on the
Plans’ financial position but, in the
long term, they are likely to be more
than all the members’ contributions
put together.
13

Tax advantages
◆
14
Additional Voluntary Contributions
You may, if you wish, pay Additional Voluntary Contributions (AVCs) in order to increase your pension benefits up
to the maximum levels allowed by the Inland Revenue.
Any member of Plan 35 or Plan 45 may pay AVCs, whatever your age. However, they are especially attractive for
members who want to save more for their retirement and who joined the company later in their working life or
are considering retiring early.
AVCs provide a tax-efficient way of
saving in order to supplement your
pension benefits because they enjoy
the following tax advantages:
◆ The money you contribute is
deducted from your pay and
automatically qualifies for
income tax relief at your highest
rate of tax in the same way as
your normal pension
contributions.
◆ Your AVCs are invested free of
capital gains tax and income tax.
These concessions are available only
through approved pension schemes.
However, you should be aware that
AVC benefits cannot normally be
paid until you retire.
◆
◆
How much can I
contribute?
Under Inland Revenue rules, your
maximum total pension
contributions (i.e. your normal Plan
contributions plus your AVCs) must
not exceed 15% of your annual pay.
Your total contributions must also
not exceed a maximum figure set by
the Inland Revenue. For 2001/2002,
this limit is £14,310.
On retirement, your benefits are
also subject to certain Inland
Revenue limits and these may
restrict the amount you can pay in
AVCs to an amount less than the
maximum indicated here.
Choice of investment
options
There is a choice of options for
investing your AVCs. These
investment options offer different
levels of risk and opportunities for
reward.
◆
Choice of benefits
Your AVCs will build up in your
own separate account which will be
available at retirement to provide
one or more of the following
benefits, within Inland Revenue
limits:
◆ An additional pension for
yourself.
◆ An additional pension for
yourself plus an additional
pension for your wife or
husband payable in the event of
your death.
◆ Increases to these AVC pensions
each year during payment.

Free-standing AVCs
◆
As an alternative to paying AVCs
through the Company’s own AVC
Scheme, you can make your AVC
savings through what is called a
“free-standing” arrangement with a
bank, building society or insurance
company. However, with “freestanding”
AVCs, administration
charges are normally much higher
and you may also have to pay
commission.
◆
Personal pensions and
stakeholder pensions
From 6th April 2001, the
Government introduced new rules
which mean that you may be able to
contribute to a personal pension or
stakeholder pension at the same time
as being a member of The RHM
Pension Scheme. To be eligible to
do so, you must not have earned
more than £30,000 in any one of
the previous five tax years (tax years
before 2000/2001 do not count for
this purpose). If you are eligible, you
can contribute to a personal or
stakeholder pension (up to £3,600 a
year, including tax relief), either as
an alternative to paying AVCs or as
well as paying AVCs.
◆
AVC Option Form
If you would like an AVC Option
Form or wish to find out more about
AVCs, there is a separate leaflet
available from your Personnel or Pay
Office.
15

◆
◆
16
Your pension
Normal Pension Age
Normal Pension Age is 65.
On retirement at this age, you will
become entitled to receive your Plan
pension which will be paid monthly
in advance on the first day of each
month for the rest of your life.
However, a system of flexible
retirement ages operates which
allows you to retire early, with your
employing company’s consent (see
page 20).
Pension formula
You will earn a pension in Plan 35
or Plan 45 at the following rates:
PLAN 35
1/80th of Final Pensionable
Earnings for each year of
Pensionable Service in Plan 35.
PLAN 45
1/60th of Final Pensionable
Earnings for each year of
Pensionable Service in Plan 45.
Your Final Pensionable Earnings,
will be based on whichever
definition of Pensionable Earnings
you choose, i.e. either the “LEL
definition” or the “full earnings
definition” (see page 12).
Final Pensionable Earnings will be the highest figure from these four alternatives:
1. Your Pensionable Earnings (see page 12) in the tax year ending 5th April before
you retire. These earnings will be increased by 1 /4% for each complete month
between the end of the tax year and the date you retire.
OR
2. Your highest Pensionable Earnings in any one of the last 5 tax years before you
retire.
OR
3. If you are a salaried employee, your annual rate of basic salary as at the 5th April
before you retire. If you have chosen the “LEL definition” of Pensionable
Earnings, this figure will be reduced by the annual Lower Earnings Limit (see
page 12) in force at that 5th April.
OR
4. The annual average of your Pensionable Earnings in the best 3 consecutive tax
years out of the last 13 tax years ending 5th April before you retire. If this
definition applies to you, your Pensionable Earnings in those 3 years will be
increased in line with the Retail Prices Index (subject to a maximum of 5% a
year) up to the 5th April before you retire.
Pensionable Service is the number of years and months of continuous service you
complete as a member of the relevant Plan. It may also include any service
credited to you as a result of the transfer to Plan 35 or Plan 45 of benefits
previously secured with another pension arrangement.

◆ Example
Let us assume that your Final Pensionable Earnings are broadly equivalent to 52 times
your Pensionable Earnings as shown on page 12. Therefore, your Final Pensionable
Earnings will be 52 x £328 = £17,056 on the “LEL definition” and 52 x £400 =
£20,800 on the “full earnings definition”. If you retire at age 65, having completed 30
years’ Pensionable Service in the same Plan, your pension would be:
◆
◆ LEL definition
PLAN 35
1/80 x £17,056 x 30 years
= £6,396 a year (£123 a week)
◆ Full earnings definition
PLAN 35
1/80 x £20,800 x 30 years
= £7,800 a year (£150 a week)
As your earnings increase, so will your pension.
Pension increases
PLAN 45
1/60 x £17,056 x 30 years
= £8,528 a year (£164 a week)
PLAN 45
1/60 x £20,800 x 30 years
= £10,400 a year (£200 a week)
Your pension will be increased each year after retirement (see page 28).
◆
Additional sources of
retirement income
In addition to your Plan pension and
your State Basic Pension
entitlement, you may have other
retirement income from some of the
following sources:
1. Any benefits secured by Additional
Voluntary Contributions or from a
personal or stakeholder pension.
2. An entitlement to a State Earnings-
Related Pension or State Second
Pension (see page 9) for any period
since April 1978 when you were
not contracted-out.
3. Any pension entitlement from
previous pension arrangements
which you have not transferred into
The RHM Pension Scheme.
4. A small entitlement under the State
Graduated Pension Scheme which
ceased in 1975.
17

Tax-free cash sum
Cash sum
◆
18
At retirement, you will normally be able to exchange part of your pension for a cash sum which, under current
legislation, is tax-free. Your pension will be reduced accordingly.
Surrendering part of your pension for cash in this way will not reduce the size of your dependant’s pension, which
will be calculated on the amount of your full pension as though you had not chosen to exchange part of it for
cash.
As an indication of how the cash
sum option works, many members
will be able to take cash based on the
following formula:
3/80ths of your Final
Pensionable Earnings
for each year of continuous service
with an RHM company
Note: For the purposes of calculating the
tax-free cash sum under this formula,
your Final Pensionable Earnings will
not be reduced for the Lower Earnings
Limit, even if you have chosen the “LEL
definition” of Pensionable Earnings.
The amount of cash you can take
may also be limited by Inland
Revenue rules. You will be advised
at the time of your retirement
whether the amount of cash you can
receive is restricted by the rules.
◆
Reduced pension
The annual pension you give up in
return for cash depends on your age
at retirement. The rates which apply
to both men and women are
illustrated below:
Age at
retirement
Cash sum obtained
for each £1 of
pension given up
65 £9.00
64 £9.40
63 £9.80
62 £10.20
61 £10.60
60 £11.00
Below 60 £11.00 plus
24 pence for
each year below 60
The Trustees reserve the right to
amend these rates from time to time
based on the advice of the actuary.

◆ Example
Let us assume that your Final
Pensionable Earnings are £20,800 and
that your service with the company is 33
years. If we also assume that you retire at
age 65, having completed 30 years’
Pensionable Service in the same Pension
Plan, then your full pension would be:
PLAN 35 PENSION
1/80 x £20,800
x 30 years’ completed Pensionable
Service
= £7,800 a year
(£150 a week)
PLAN 45 PENSION
1/60 x £20,800
x 30 years’ completed Pensionable
Service
= £10,400 a year
(£200 a week)
Your maximum tax-free cash sum would
be the same for both Plans, namely:
3/80 x £20,800 x 33 years’
service with the company
= £25,740 tax-free
The pension you give up in return for the
cash sum varies with your age at
retirement. As you will see from the table
opposite, if you retire at age 65, your
pension will be reduced by £1 for each
£9 of cash taken. Your pension would,
therefore, be reduced by:
£25,740 ÷ 9 = £2,860 a year
(£55 a week)
The effect of taking the cash sum would,
therefore, be to leave a reduced pension of:
PLAN 35 PENSION
£7,800 a year – £2,860
= £4,940 a year
(£95 a week)
PLAN 45 PENSION
£10,400 a year – £2,860
= £7,540 a year
(£145 a week)
19

◆
20
Early and late retirement
Early retirement
With your employing company’s
agreement, you may retire from
service at any time from age 50 and
start to receive an immediate
pension. The way in which your
pension is calculated will depend on
your age at retirement.
Retirement between the ages of
60 and 65
If you retire between the ages of 60
and 65, your pension will be based
on your Final Pensionable Earnings
and your completed Pensionable
Service (see page 16) at the time you
retire. You will receive this pension
immediately with no reduction for
early payment.
Retirement between the ages of
50 and 60
If you retire between the ages of 50
and 60, your pension will be
calculated in the way described
above except that it will be reduced
by 4% a year for each year before
age 60. For example, if you retire at
age 58, your pension will be
reduced by 8% to take account of
early payment.
◆ Example
Let us assume that your Final Pensionable Earnings are £20,800 and that you retire at
age 60, having completed 25 years’ Pensionable Service in the same Pension Plan. Your
early retirement pension would be:
PLAN 35 PENSION
1/80 x £20,800 x 25 years = £6,500 a year (£125 a week)
PLAN 45 PENSION
1/60 x £20,800 x 25 years = £8,666.67 a year (£166.67 a week)
If instead you retire at age 58, having completed 23 years’ Pensionable Service, then your
pension would be:
PLAN 35 PENSION
1/80 x £20,800 x 23 years £ 5,980.00
Less Reduction of 8% £ 478.40
(2 years at 4% a year)
Equals Pension £5,501.60 a year (£105.80 a week)
PLAN 45 PENSION
1/60 x £20,800 x 23 years £ 7,973.33
Less Reduction of 8% £ 637.87
(2 years at 4% a year)
Equals Pension £7,335.46 a year (£141.07 a week)

Tax-free cash sum
◆
You will still have the option at early
retirement of giving up part of your
pension for a tax-free cash sum (see
page 18).
◆
Pension increases
Your early retirement pension will
be increased each year in the same
way as other pensions in payment
(see page 28).
◆ AVCs
If you plan to retire early, you may
wish to pay Additional Voluntary
Contributions in order to increase
your income in retirement.
◆
Late retirement
In exceptional circumstances, your
employing company may ask you to
continue working beyond Normal
Pension Age.
In this situation you can, if you
wish, draw your pension at age 65
or, if you prefer, you can defer
drawing it until you actually retire
when it will be increased to take
account of each month of service
you have completed after that age.
You will be told the amount of your
increased pension when you actually
retire.
If you have not drawn your
pension and you die while still
working for your employing
company after age 65, your benefits,
increased as described above, will be
worked out as if you had retired on
the day before you died (see “Death
after retirement” on page 26).
◆
State pensions
If you are considering retiring early,
you should be aware that State
pensions cannot be paid before State
Pension Age.
If you continue working beyond
State Pension Age, you can choose
whether to draw the State Pension at
that age or to defer drawing it and
accept an increased pension later on.
21

◆
22
Retirement due to ill-health
If you have to retire because you have become so ill or incapacitated that you are unable to continue working for
your employing company, as a member of either Plan 35 or Plan 45 you will receive an immediate pension,
provided that you have completed at least one year’s Pensionable Service. The pension, which is payable regardless
of age, is awarded at the discretion of the Trustees, who will require medical evidence regarding your incapacity.
In calculating the size of the pension, a distinction is made between partial and total incapacity.
Partial incapacity
If you are permanently unable to do
your present job and you are not
offered suitable alternative
employment within the company
but you are capable of other work
outside the company, your
retirement will be considered to be
on the grounds of “partial incapacity”.
Your pension will be based on your
Final Pensionable Earnings and your
completed Pensionable Service at
the time you retire. There will be
no reduction even though the
pension is being paid early.
Total incapacity
◆
If you are permanently unable to do any kind of suitable work, your retirement
will be considered to be on the grounds of “total incapacity”. Your pension will
be based on your Final Pensionable Earnings at the time you retire and on your
full Pensionable Service as though you had worked until age 65. Once again,
there will be no reduction for early payment.
◆ Example
Let us assume that your Final Pensionable Earnings are £20,800 and that you retire on
grounds of partial incapacity at age 55 after having completed 20 years’ Pensionable
Service in the same Pension Plan. Your ill-health pension would be:
PLAN 35 PENSION
1/80 x £20,800 x 20 years’
completed Pensionable Service
= £5,200 a year
(£100 a week)
PLAN 35 PENSION
1/80 x £20,800 x 30 years
(20 years’ completed Pensionable
Service + 10 years’ service to age 65)
= £7,800 a year (£150 a week)
PLAN 45 PENSION
1/60 x £20,800 x 20 years’
completed Pensionable Service
= £6,933.33 a year
(£133.33 a week)
If instead you retire on the grounds of total incapacity at age 55 after having completed
20 years in the Plan, you would be credited with a further 10 years’ service as though
you had been able to continue working from age 55 through to age 65. So your pension
would be:
PLAN 45 PENSION
1/60 x £20,800 x 30 years
(20 years’ completed Pensionable
Service + 10 years’ service to age 65)
= £10,400 a year (£200 a week)

Trustees’ discretion
◆
◆
The granting of an ill-health pension
is entirely at the discretion of the
Trustees, based on medical evidence,
and their decision is final.
The Trustees also have discretion
to reduce, or stop payment of, an
ill-health pension if you recover or
find other paid employment.
Pension increases
Your ill-health pension will be
increased in the same way as other
pensions in payment (see page 28).
◆
Death benefits
If you die while receiving an
ill-health pension, your widow or
widower and any dependent
children will receive benefits
calculated in the same way as
described in the section on “Death
after retirement” (see page 26).
23

24
Death in service
Plan 35 and Plan 45 provide security for your dependants if you should die during the time you are employed by
the company.
The following benefits are
payable:
◆ A lump sum.
◆ A return of your
contributions.
◆ A widow’s or widower’s
pension payable for life.
◆ Children’s allowances.
◆
Lump sum
Your dependants or estate will
receive a lump sum based on your
Final Pensionable Earnings (see page
16) at the date of your death.
For the purposes of calculating
the death-in-service lump sum, your
Final Pensionable Earnings will not
be reduced for the Lower Earnings
Limit, even if you have chosen the
“LEL definition” of Pensionable
Earnings.
If you are a member of Plan 35,
the lump sum will be twice your
Final Pensionable Earnings. If you
are a member of Plan 45, it will be
three times your Final Pensionable
Earnings.
Example If we assume that your Final
Pensionable Earnings are £20,800, the
lump sum would be:
PLAN 35
2 x £20,800
= £41,600 tax-free
PLAN 45
3 x £20,800
= £62,400 tax-free
◆
◆
Return of
contributions
A lump sum equal to your total
contributions (including any AVCs)
will also be paid to your dependants
or estate.
Making your wishes
known
Both the lump sum and the return of
your contributions will normally be
tax-free. The Trustees will use their
discretion in deciding who should
receive this benefit after taking
account of your wishes. The lump
sum is paid in this way to avoid
Inheritance Tax.
You are advised to complete an
Expression of Wish Form, which
you will find at the back of this
booklet, telling the Trustees who
you would like to receive this
benefit. Furthermore, if your
personal circumstances change, you
should complete a new Form
immediately.

◆
Widow’s or widower’s
pension
If you are married, your widow or
widower will receive an immediate
pension for life. The amount of this
pension will normally be one-half of
the pension you would have
received at age 65 based on your
Final Pensionable Earnings at the
date of death and on your full
Pensionable Service as though you
had worked until age 65.
Example Let us assume that your Final
Pensionable Earnings are £20,800 and
that your full Pensionable Service if you
had been able to continue working until
age 65 is 30 years. Your widow’s or
widower’s pension would be:
PLAN 35 PENSION
1 /2 x 1/80 x £20,800 x 30 years
= £3,900 a year
(£75 a week)
PLAN 45 PENSION
1 /2 x 1/60 x £20,800 x 30 years
= £5,200 a year
(£100 a week)
◆ Condition
If you are legally separated from your
wife or husband at the time of your
death or if you are living apart, part
or all of the widow’s or widower’s
pension may be withheld at the
Trustees’ discretion.
◆
◆
Dependant’s pension
If no widow’s or widower’s pension
is payable and you leave an adult
person who was financially
dependent on you - for example, a
common law husband or wife or
dependent parents - the Trustees
have discretion to pay a pension,
normally of the same amount as the
widow’s or widower’s pension, to
the dependant concerned.
Children’s allowances
If you die leaving children, an
allowance of 12 1 /2% of your full
pension (as described under
“Widow’s or widower’s pension” in the
previous column) is payable for up to
four of your children until the age of
18 (or 21 if still in full-time
education). At the discretion of the
Trustees, the allowance can start, or
continue to be paid, beyond 18 if the
child is unable to work because of a
physical or mental handicap. The
Trustees also have discretion to pay
the allowances to step-children and
foster children.
The children’s allowances will be
doubled if there is no widow’s,
widower’s or dependant’s pension
payable.
Example Let us assume that your Final
Pensionable Earnings are £20,800 and
that your full Pensionable Service if you
had been able to continue working until
age 65 is 30 years. Each eligible child
would receive:
PLAN 35 PENSION
12 1 /2% x 1/80 x £20,800
x 30 years
= £975 a year (£18.75 a week)
PLAN 45 PENSION
12 1 /2% x 1/60 x £20,800
x 30 years
= £1,300 a year (£25 a week)
◆ Pension increases
All widows’ and widowers’ pensions,
dependants’ pensions and children’s
allowances are increased each year in
the same way as other pensions in
payment (see page 28).
25

26
Death after retirement
Once payment of your pension starts, you receive it for the rest of your life.
On your death, the Plan
provides the following benefits:
◆ A widow’s or widower’s
pension payable for life.
◆ Children’s allowances.
◆ A lump sum if you die within
five years of retiring.
◆
Widow’s or widower’s
pension
If you are married, your widow or
widower will receive an immediate
pension for life. This pension will
normally be one-half of your full
pension at the date of death. Any
reduction which was made to your
pension either because you took a
cash lump sum when you retired (see
page 18) or because you gave up part
of your pension to provide an
additional pension for a dependant
(see next page) will be added back.
Example Let us assume that a member
dies after retiring with a pension of
£5,000 a year, having given up
£1,000 a year of pension in order to
provide a tax-free cash sum. For the
purposes of calculating the widow’s or
widower’s pension, the £1,000 of
pension given up would be added back.
So the widow’s or widower’s pension
would be:
1 /2 x £6,000
= £3,000 a year
(£57.69 a week)
◆ Condition
If you are legally separated from your
wife or husband at the time of your
death or if you are living apart, part
or all of the widow’s or widower’s
pension may be withheld at the
Trustees’ discretion.
◆
Dependant’s pension
If no widow’s or widower’s pension
is payable and you leave an adult
person who was financially
dependent on you - for example, a
common law husband or wife or
dependent parents - the Trustees
have discretion to pay a pension,
normally of the same amount as the
widow’s or widower’s pension, to
the dependant concerned.

Children’s allowances
◆
If you die leaving children, an
allowance of 12 1 /2% of your full
pension is payable for up to four of
your children until the age of 18 (or
21 if still in full-time education). At
the discretion of the Trustees, the
allowance can start, or continue to
be paid, beyond 18 if the child is
unable to work because of a physical
or mental handicap. The Trustees
also have discretion to pay the
allowances to step-children and
foster children.
The children’s allowances will be
doubled if there is no widow’s,
widower’s or dependant’s pension
payable.
◆ Additional
dependant’s pension
◆
You may, before you retire, choose
to give up part of your pension to
provide an additional dependant’s
pension payable on your death after
retirement. “Dependant” here means
wife, husband, child or any person
who is financially dependent on you.
Your own pension will be
reduced as a result but the pension
you retain for yourself must always
be at least as much as the total of any
widow’s or widower’s or dependant’s
pension.
However, make sure you seek
information from RHM Pension
Services before you set aside a part of
your pension in this way, since there
are certain issues to be considered.
Pension increases
All widows’ and widowers’ pensions,
dependants’ pensions and children’s
allowances are increased each year in
the same way as other pensions in
payment (see page 28).
◆
Lump sum
If you die within five years of
retiring, your dependants will receive
a tax-free lump sum equal to the
unpaid balance of five years’ pension
payments at the rate prevailing at the
date of your death. The Trustees
have discretion as to who should
receive this lump sum but will take
account of any wishes you have
expressed in your Expression of
Wish Form (see page 11).
Example Let us assume that a member
dies after retiring with a full pension of
£6,000 and that none of this pension
was given up in exchange for a tax-free
cash sum. The lump sum payable if the
member were then to die exactly one year
after retirement would be:
4 x £6,000
= £24,000 a year tax-free
27

◆
28
Pension increases
Before retirement
As your pension from Plan 35 or
Plan 45 is based on your Final
Pensionable Earnings at retirement,
it should reflect changes in the cost
of living up to that time, as earnings
generally keep pace with the cost of
living.
If you leave your employing
company and opt for a deferred
pension from the Plan, your pension
entitlement at the date of leaving
will be increased each year up to
your date of retirement (see page 29).
◆
After retirement
After retirement (or earlier death),
pensions in payment will be
increased each year to help offset
increases in the cost of living.
Your pension will be increased
each year by Plan 35 or Plan 45 in
line with the Retail Prices Index up
to a maximum of 5% a year and
subject to a minimum of 3% a year.
Extra discretionary increases can be
awarded by the Principal Company
and the Trustees, to help offset the
effects of inflation.
These increases apply not only
to pensions which start to be paid at
Normal Pension Age, but also to
early retirement pensions and all
widows’, widowers’ and other
dependants’ pensions from Plans 35
and 45.
During the year in which your
pension starts to be paid, you will
receive a proportion of the full
annual increase.
◆
State pensions
The State Basic Pension and the
State Earnings-Related Pension are
currently increased in April each
year in line with the Retail Prices
Index.

Leaving the company
If you leave the company, there
are three main options under
Plan 35 and Plan 45 which may
be available depending on your
circumstances:
1. A deferred pension.
2. A transfer of the value of
your pension to your new
employer’s scheme or to
your own pension policy.
3. An immediate pension, if
you are aged 50 or over
when you leave the Plan.
◆
1 DEFERRED PENSION
The primary option, which is always
available to you, is known as a
deferred pension because payment
will be deferred until retirement.
Normal Pension Age is 65 but you
may be able to draw your deferred
pension early, as explained under
“Retirement options” on the next
page.
Your deferred pension will be
your full pension earned up to the
date you leave, calculated on the
basis of your Final Pensionable
Earnings and completed Pensionable
Service at the time you leave.
Example Let us assume that your Final
Pensionable Earnings are £20,800 and
that you leave your employing company
after 10 years’ Pensionable Service. Your
deferred pension would be:
PLAN 35
1/80 x £20,800 x 10 years
= £2,600 a year
(£50 a week)
PLAN 45
1/60 x £20,800 x 10 years
= £3,466.67 a year
(£66.67 a week)
◆
Pension increases
Before your pension starts to be
paid
Your deferred pension will be
increased each year up to the time it
starts to be paid. Increases will be in
line with the Retail Prices Index, up
to a maximum of 5% a year and
subject to a minimum of 3% a year.
After your pension starts to be
paid
Once your deferred pension starts to
be paid, it will be increased in the
same way as other pensions in
payment (see page 28).
29

◆
30
Leaving the company
Death before
retirement
If you should die before your
deferred pension starts to be paid,
your widow or widower will receive
a pension, which will normally be
one-half of your deferred pension
including any increases granted up to
the date of your death.
If no widow’s or widower’s
pension is payable, the Trustees have
discretion to pay a dependant’s
pension as described on page 25.
Children’s allowances are also
payable as described on that page. All
these pensions will be increased in
the same way as other pensions in
payment (see page 28).
In addition, your dependants will
receive a refund of all of the
contributions you have paid to the
Plan, with interest added. The
Trustees have discretion as to who
should receive this sum and they will
take account of your wishes as stated
in your Expression of Wish Form
(see page 11).
◆
◆
Death after
retirement
If you die after your deferred
pension starts to be paid, your
widow or widower or other
dependants will receive benefits on a
similar basis to that described in the
section on “Death after retirement” on
page 26.
These benefits will include the
lump sum benefit if you die within
five years of the pension starting to
be paid. You should, therefore, keep
your Expression of Wish Form
up-to-date if you take a deferred
pension on leaving.
Retirement options
At retirement, the following options
apply to a deferred pension:
◆ The option to exchange part of
your deferred pension for a
tax-free cash sum at retirement
(see page 18).
◆
◆
◆ The option, once you have left
your employing company, to
apply to the Trustees to take
payment of your deferred
pension early, at any time from
age 50. Your pension will be at a
reduced rate to take account of
early payment, with the size of
the reduction based on advice
from the Plan’s actuary.
Continuing option
If you choose the deferred pension
option on leaving, you retain the
option to transfer the value of your
deferred pension to a new
employer’s scheme or to your own
pension policy at any time before
payment starts.
Change of address
Please keep the Trustees informed of
any change of address so that they
can notify you of the amount of
your pension when it is due to start.

2 TRANSFER
◆
As an alternative to a deferred
pension, you may choose to transfer
the cash value of your deferred
pension benefits to a new employer’s
scheme or to an approved financial
institution to buy an individual
pension policy in your own name.
The transfer value is an estimate
by the Plan’s actuary of how much
would need to be invested now to
produce a sum of money sufficient
to provide the benefits payable to
you by the Plan at Normal Pension
Age. Changes in investment market
conditions will, therefore, cause
transfer value quotations to fluctuate
from time to time.
Transfer values from the Plan
comply with statutory minimum
requirements and include an
allowance for discretionary pension
increases (see page 28) and, if you are
age 50 or over when you leave, for
the early retirement terms (see page
20). Any transfer quotation provided
to you will normally remain valid for
three months from the date of
quotation.
◆
Once your transfer value has
been worked out, your new
employer’s scheme or your chosen
financial institution, as appropriate,
will be able to tell you what benefits
this can secure for you in your new
pension arrangement.
It is often quite difficult to
decide between a deferred pension
and a transfer. The important thing is
to collect all the facts and figures
before deciding. The transfer cannot
take place without your consent, so
the final decision rests with you.
3 IMMEDIATE PENSION
If you are aged 50 or over when you
leave, you may, with your
employing company’s agreement,
take an early retirement pension
based on your Final Pensionable
Earnings and completed Pensionable
Service at the date you leave. Your
pension will normally be reduced to
take account of the longer period
over which it is likely to be paid (see
page 20).
◆
Transfer to another
RHM company
If you are transferred to the
employment of another company
within RHM and remain a member
of Plan 35 or Plan 45, your
Pensionable Service will continue
uninterrupted. You will have the
leaving service options described in
this section only if you subsequently
leave RHM altogether.
31

Your options
◆
◆
◆
32
Opting out of the Plans
If you remain with your employing
company but opt out of Plan 35 or
Plan 45 because you want to make
your own pension arrangements,
your options will be the same as if
you had left the company (see page
29) except that early payment of
your deferred pension will be
possible only after you have left the
company.
Giving up benefits
If you opt out of the Plan, you will
lose virtually all of the benefits
described in this booklet. As a result,
you should make sure that you have
adequate cover elsewhere for the
benefits you are giving up.
Opting out
If you wish to opt out of Plan 35 or
Plan 45, you must give one month’s
notice in writing of your intention
to do so by completing the
appropriate form available from your
Personnel or Pay Office. Your
withdrawal will take effect on the
6th of the month following the end
of the notice period.
◆
Points to remember
Before you decide to opt out, you
should be aware of the following
points:
◆ First, in view of the amount the
company pays towards your
pension from the Plan, it is very
unlikely that a personal or
stakeholder pension will provide
better benefits than those under
the Plan – unless you are
prepared to pay substantially
more towards the cost of them.
◆ Second, you will be given only
one opportunity to re-join an
RHM Plan.
◆ Third, the Trustees reserve the
right to ask for evidence of good
health before allowing you to
re-join.
◆ Fourth, the lump sum payable on
death in service (see page 24) will
reduce to one year’s pay.

◆
Absence from work
Temporary absence
Most absences from work are for a
relatively short period and your
membership of Plan 35 or Plan 45
would normally be unaffected. If,
however, you are away for a longer
period but continue to be employed
by the company, then you will be
advised what effect, if any, your
absence will have on your
membership of the Plan.
You will continue to pay
contributions to the Plan on any
Pensionable Earnings you receive
during your period of absence.
Unless you are away from work
because of sickness, the period of
absence will only count as
Pensionable Service if contributions
are paid.
The lump sum payable on death
in service (see page 24) will continue
to apply while you remain employed
by the company.
◆
Maternity leave
If you leave the company to have a
baby and reserve the right to return
to work, you will remain entitled to
receive all the benefits from the Plan
and will continue to pay
contributions on any Pensionable
Earnings you receive during your
maternity leave.
If you return to work within the
statutory time limits, you will be
treated as having continuous
Pensionable Service for the period of
your leave.
If you do not return to work,
your leaving service benefits will be
calculated on the basis of your
completed Pensionable Service up to
the end of your statutory maternity
leave period or up to the time you
advised the company that you would
not be returning to work, whichever
is earlier.
33

Switching
If you join Plan 35 in the first instance, you will be encouraged to switch to Plan 45 no later than age 45 in order to
build up a bigger pension. You can, however, switch to Plan 45 at any time you choose.
You also have the option of switching at any time from the “LEL definition” to the “full earnings definition” of
Pensionable Earnings within your current Pension Plan in order to increase your pension benefits.
◆ Contributions
If you switch from Plan 35 to Plan
45, your contributions will increase
from 3 1 /2% to 5% of your
Pensionable Earnings.
◆
34
Switching from Plan 35 to Plan 45
Pension formula
If you switch from Plan 35 to Plan
45, you will earn a pension of
1/80th of your Final Pensionable
Earnings for each year of completed
Pensionable Service in Plan 35 and a
pension of 1/60th of your Final
Pensionable Earnings for each year
of completed Pensionable Service in
Plan 45.
Example Let us assume that your Final
Pensionable Earnings are £20,800 and
that you retire at age 65, having
completed 15 years’ Pensionable Service
in Plan 35 and then a further 15 years
in Plan 45. Your pension would be:
PLAN 35 PENSION
1/80 x £20,800 x 15 years
= £3,900 a year (£75 a week)
plus
PLAN 45 PENSION
1/60 x £20,800 x 15 years
= £5,200 a year (£100 a week)
equals
TOTAL RHM PENSION
£3,900 + £5,200
= £9,100 a year (£175 a week)
◆ Switching
You may switch from Plan 35 to
Plan 45 on the 6th of any month. To
do so, you must complete the
appropriate form available from your
Personnel or Pay Office. Once you
have switched to Plan 45, you will
not be allowed to switch back to
Plan 35 except in the case of severe
financial hardship.

◆
Switching from the LEL definition to the full earnings definition of
Pensionable Earnings
Choice of definitions
of Pensionable Earnings
As explained on page 12, members of
Plan 35 and Plan 45 are offered a
choice of definitions of Pensionable
Earnings for calculating both their
contributions and their benefits.
Pensionable Earnings are:
◆ Either: Your weekly or monthly
earnings (excluding noncontractual
bonuses, temporary
payments and allowances) above
the Lower Earnings Limit.
This definition of Pensionable
Earnings is called the “LEL
definition”.
The Lower Earnings Limit is set by
the Government in April each year
and is an amount approximately
equal to the State Basic Pension.
For 2001/2002 the Lower Earnings
Limit is £72 a week or £312 a
month (£3,744 a year).
◆ Or: Your full weekly or monthly
earnings (excluding noncontractual
bonuses, temporary
payments and allowances).
This definition of Pensionable
Earnings is called the “full earnings
◆
Pension formula
If you switch from the “LEL definition” to the “full earnings definition” of
Pensionable Earnings, the calculation of your pension will take account of the
period of Pensionable Service during which you were contributing to your
Pension Plan on the “LEL basis” and the period you were contributing on the
“full earnings basis”.
Example Let us assume that your Final
Pensionable Earnings are broadly equivalent to
52 times your Pensionable Earnings as shown
on page 12. Therefore, your Final Pensionable
Earnings will be 52 x £328 = £17,056 on
the “LEL definition” and 52 x £400 =
£20,800 on the “full earnings definition”.
Let us also assume that you are a member of
Plan 45 throughout your employment with
RHM and that you retire at age 65, having
completed 15 years’ Pensionable Service on the
“LEL basis” and 15 years on the “full
earnings basis”. Your pension would be:
◆ Switching
You can switch from the “LEL definition” to the “full earnings definition” of
Pensionable Earnings within your Pension Plan on the 6th of any month. To do
so, you must complete the appropriate form available from your Personnel or
Pay Office. Once you have switched to the “full earnings definition”, you will
not be allowed to switch back to the “LEL definition” except in the case of
severe financial hardship.
◆
More information
PENSION EARNED WHILE
CONTRIBUTING ON LEL BASIS
1/60 x £17,056 x 15 years
= £4,264 a year (£82 a week)
plus
PENSION EARNED WHILE
CONTRIBUTING ON FULL
EARNINGS BASIS
1/60 x £20,800 x 15 years
= £5,200 a year (£100 a week)
equals
TOTAL PENSION FROM PLAN 45
£4,264 + £5,200
= £9,464 a year (£182 a week)
There is a separate leaflet available from your Personnel or Pay Office which
35
tells you more about how you can earn extra pension by switching.
definition”.

◆ Tax
36
Tax and legal matters
All pension payments (including the
State Basic Pension) are treated as
earned income, just like your pay, and
are subject to tax through the PAYE
system in the same way. Once you
become a pensioner, you will receive
a pension pay-slip with your first
payment and subsequently whenever
your net monthly pension changes by
more than £1 a month. This will
show your net pension payment and
any tax deducted from your total
income.
◆
Inland Revenue
The RHM Pension Scheme,
covering Plan 35 and Plan 45, has
been approved by the Inland
Revenue under the terms of the
Income and Corporation Taxes Act
1988. As a result, the company and
the members receive full tax relief
on their contributions to the
Scheme. Also, the income and
capital gains of the Scheme are
exempt from most UK taxes.
In return for these reliefs, the
Inland Revenue imposes certain
limits on members’ contributions
and on the benefits which may be
paid. The Trustees have agreed to
comply with these limits as part of
the conditions for tax approval of the
Scheme. You will be notified if your
benefits are affected by these limits.
There is an upper limit on the
total earnings which can count for
pension purposes. For 2001/2002,
this limit is £95,400.
◆
Amendment or
discontinuance
Although the intention is to
continue Plan 35 and Plan 45
indefinitely, future conditions cannot
be foreseen. The Trust Deed,
therefore, provides that the Principal
Company (RHM Limited) has the
power to discontinue the Plans or
amend them at any time in the
future. You will be advised of any
significant changes to the Plans. No
amendment or discontinuance will
adversely affect the benefits already
earned.
In the unlikely event of The
RHM Pension Scheme being
discontinued, the Trustees would
have to use the assets of the Scheme
to provide benefits for the members
and their dependants as laid down in
the Trust Deed & Rules. If the assets
of the Scheme were insufficient to
pay all the benefits, each employer in
the Scheme would be obliged to
make good the shortfall insofar as
legislation requires.

◆
◆
Benefits not assignable
Because of the tax reliefs given by the
Inland Revenue, you may not use
your benefits as security for a loan or
dispose of them in any other way.
Money owed to the
company
Your benefits from The RHM
Pension Scheme may be reduced on
account of any debts owed to the
company arising out of criminal,
fraudulent or negligent acts.
◆ Divorce
When settling divorce cases, courts
must take pension rights and benefits
into account. They may order part
of your benefits to be paid to your
ex-spouse.
◆
Booklet not a legal
document
Whilst every effort has been made to
ensure that this booklet is accurate, it
cannot include every detail. The
Trust Deed & Rules are the final
authority in the event of any
discrepancy between the two.
The contents of this booklet may be
subject to future revision if the Plans
are amended, for instance to comply
with future tax or legislative
requirements.
37

◆
38
Legal safeguards
Your right to information
The Trustees have a legal obligation to provide certain information about The
RHM Pension Scheme to members, other beneficiaries and the recognised trade
unions of members. A summary of how this information can be obtained is
provided in the following table:
TRUST DEED
& RULES
PLAN
DETAILS
BENEFITS
STATEMENTS
TRUSTEES’
ANNUAL
REPORT
VALUATION
REPORT
These are available for inspection or purchase by arrangement with
your local Pensions Liaison Officer or your Personnel or Pay Office.
An Explanatory Booklet is given to all members on joining the
Scheme. It is also available on request to other interested parties.
In addition, the annual Trustees’ Report & Accounts provides other
relevant details.
These are issued automatically when a benefit falls due.
Also Benefits Statements are issued each year to members.
Estimates of members’ benefits from the Scheme, including transfer
value quotations, can be obtained from RHM Pension Services.
A simplified version is issued each year to members and other
beneficiaries. A full Report & Accounts is available on request from
RHM Pension Services.
Extracts of the Actuarial Valuation Report are included as part of the
Trustees’ Report. A full Report is available for inspection.
◆
Financial Services
Act 1986
The Financial Services Act 1986
requires independent pension
providers to give you “best advice”
when talking to you about personal
pensions or free-standing AVCs.
You should remind salespeople of
this obligation (particularly if you
made the initial enquiry). You
should also ensure that any
salesperson takes the benefits you
could get from The RHM Pension
Scheme into account in assessing
your personal position.
Since your employing company
is not authorised as a financial
adviser under the Act, it is prevented
from providing specific financial
advice. It will, however, make
available whatever information it can
to help you reach your own pension
decisions.

◆
Data Protection Act 1998
Information about present and former Scheme members is held by RHM
Pension Services on behalf of the Trustees for the purpose of administering the
Scheme. The Trustees comply with the requirements of the Data Protection
Act, which allows you to check that personal details held are correct.
The personal data held will be used by the Trustees, the Administrator and
the Pensions Manager for the purposes of the Scheme and the company (e.g. for
performing valuations and assessing costs and for the purposes of Scheme benefit
administration and calculation). The data may be disclosed where necessary (e.g.
to the actuary or professional advisers) for these purposes or as otherwise
authorised under the Act.
Sensitive personal information, such as medical reports and Expression of
Wish Forms, will remain confidential and will be disclosed only when the
Trustees consider it appropriate to do so.
If you join The RHM Pension Scheme, the Trustees will require your
explicit consent to the processing of personal data and sensitive personal data as
set out in this section.
39

◆
◆
40
Useful addresses
The RHM Pension Scheme
If you have any questions about
The RHM Pension Scheme, please
contact either your local Pensions
Liaison Officer or RHM Pension
Services Limited at the following
address:
96 George Street
Croydon
Surrey
CR9 1TB.
Telephone: 020 8686 5699.
www.rhmpensions.co.uk
Occupational Pensions
Regulatory Authority (OPRA)
OPRA’s role is to protect members’
interests if Trustees, employers or
advisers do not meet their legal
obligations under the Pensions Act
1995. Its address is:
Invicta House
Trafalgar Place, Brighton
East Sussex
BN1 4DW.
Telephone: 01273 627600.
◆
◆
The Office of the Pensions
Advisory Service (OPAS)
OPAS is an independent voluntary
organisation with local pensions
advisers which is available to help
pension scheme members and
beneficiaries with any pension query
they may have or difficulty they have
failed to resolve with the Trustees or
Scheme Administrator. OPAS can be
contacted at:
11 Belgrave Road
London
SW1V 1RB.
Telephone: 020 7233 8080.
The Pensions Ombudsman
The Pensions Ombudsman may
investigate and determine any
complaint or dispute of fact or law in
relation to the Scheme. He can be
contacted at the same address as
OPAS but on a different telephone
number: 020 7834 9144.
◆
◆
The Pension Schemes
Registry
The RHM Pension Scheme is
registered with The Pension
Schemes Registry. The Registry is
able to help members trace pension
benefits which they may have from
previous employers and can be
contacted at:
PO Box 1NN
Newcastle-upon-Tyne
NE99 1NN.
Telephone: 0191-225 631600.
Benefits Agency
You can find out how much pension
you are likely to receive from the
State by contacting the Pensions
Section of your local Benefits
Agency, which you will find listed in
your local telephone directory. They
will send you form BR19 which you
should complete and return to:
Benefits Agency, RPFA Unit,
Pensions & Overseas Benefits
Directorate,
Newcastle-upon-Tyne
NE98 1BA.
You can also complete form BR19
on-line at www.dss.gov.uk (click on
the “Pensions and retirement” section)

◆
Membership Application Form
THE RHM PENSION SCHEME
SECTION 1 To be completed by the employee
I, (full name in BLOCK CAPITALS please)
have been given a copy of The RHM Pension Plan 35 and Plan 45 Explanatory Booklet and am aware of the options
available to me. I elect to join the Plan ticked below (tick ONE box only):
RHM PLAN 35 RHM PLAN 45 I do not wish to be a member of either of the RHM Plans
I elect to join the Plan on the following basis and authorise the appropriate contributions to be deducted from my pay
(tick ONE box only):
Full earnings definition of Pensionable Earnings, i.e. with no reduction for the Lower Earnings Limit.
LEL definition of Pensionable Earnings, i.e. with reduction for the Lower Earnings Limit.
I also consent to the processing of personal data and sensitive personal data as set out in the section headed “Data
Protection Act 1998” on page 39 of the Explanatory Booklet.
Please also complete the following information
◆ Have you previously been a member of an RHM pension arrangement?
YES/NO*
◆ Do you have other benefits under any previous pension scheme or pension policy? YES/NO* * delete as applicable
If “YES”, and you wish to consider transferring these benefits into the RHM Plan, please complete the “Transfer-in
Quotation Request” in the separate leaflet available locally.
Between the date you complete this Form and the date you are eligible to join the Plan, you will be covered
for the death benefits applicable to the Plan of your choice.
EMPLOYEE’S
SIGNATURE
DATE
Please pass this form to your local Personnel or Pay Office for Section 2 overleaf to be completed.
You should also:
ER REF
◆ attach a copy of your birth certificate and, if you are a married woman or widow, a
copy of your marriage certificate.
◆ complete and return the Expression of Wish Form on page 43 of the Explanatory Booklet.
pre 10.2001
FOR RHM PENSION
SERVICES’ USE
EE REF
41

◆
42
SECTION 2 To be completed by the employer (IN BLOCK CAPITALS)
EMPLOYEE’S SURNAME INITIAL(S) MR/MRS/MISS MAIDEN NAME (married woman or widow only)
FORENAMES
Reduced Rate N.I.
(women members only)
YES/NO
EMPLOYER LOCATION
EMPLOYER’S SIGNATURE DATE
Copy of marriage certificate attached
(married woman or widow only)
Copy of birth certificate attached
YES/NO
YES/NO
NATIONAL INSURANCE NO. DATE OF BIRTH DATE OF ENTRY TO SERVICE
Note 1: Ignore any period of temporary employment before
becoming a permanent employee.
DATE OF ENTRY TO PLAN
DAY MONTH YEAR DAY MONTH YEAR
0 6
DAY MONTH YEAR
Note 2: Date of entry to the Plan will normally be the 6th of the month immediately following the completion of three months’
continuous service.
Certification by the Employer – please tick box(es) to confirm the following statements:
Salaried staff employee
YES/NO
I certify that the employee is eligible for membership of the Plan selected
For employees who are not joining the Plan at their first opportunity (see Note 2 above):
I certify that the employee is not currently absent from work on medical grounds
I certify that, to the best of my knowledge, the employee is not currently suffering from
any illness or medical condition which is likely to lead in the foreseeable future to a
claim for either ill-health retirement benefits or death-in-service benefits from the Plan
If any of the boxes are unticked, please forward details.
NOTE TO EMPLOYER: This Form should now be passed to the employee’s Pay Office for their information and signature below.
PAY OFFICE PAY OFFICE SIGNATURE DATE
NOTE TO PAY OFFICE: After the contents have been noted by the Pay Office, this Form should be sent to RHM Pension
Services, 96 George Street, Croydon, CR9 1TB at the time the employee enters the Plan. (Please do not wait until you have
completed the next Monthly Contributions Statement before forwarding the Form.) If the employee dies during the
three months’ qualifying period, the Form should be forwarded at the time of death.

◆
Expression of Wish Form
Why complete one?
Valuable benefits are payable by the Pension Plans in the
unfortunate event of your death in service with the company.
When paying these benefits, the Trustees will be guided by
your wishes, but first they must know what those wishes are!
You do this by completing an Expression of Wish Form.
If you have never completed a Form or if you last
completed one more than three years ago, fill in the sections
of the Form below and overleaf, detach it and send it to your
Personnel or Pay Office. If you prefer, you may send it in a
sealed envelope direct to RHM Pension Services in Croydon,
where all Forms are kept confidentially.
You should also complete a fresh Form whenever your
circumstances change.
Please complete this Form IN BLOCK CAPITALS
EXPRESSION OF WISH FORM To: The Trustees of The RHM Pension Scheme
In the event of my death, I wish you to exercise your discretion under the Rules of the Scheme and apply the proceeds
of any lump sum benefits under the Scheme for the benefit of the persons named below in the proportions shown.
1
2
3
4
PERSON NOMINATED RELATIONSHIP
% OF SUM PAYABLE
ADDRESS %
PERSON NOMINATED RELATIONSHIP
% OF SUM PAYABLE
ADDRESS
%
PERSON NOMINATED RELATIONSHIP
% OF SUM PAYABLE
ADDRESS
%
PERSON NOMINATED
ADDRESS
RELATIONSHIP
% OF SUM PAYABLE
NOTE: You may, if you wish, request the Trustees to arrange
for the benefits to be paid to your estate to be distributed
according to your Will. If so, write ‘To my estate’ against
‘Person Nominated’ completing also ‘% of sum payable’.
I understand that this is an expression of wish only, which is
not binding on you and which may at any time be revoked
or revised in a further letter from me.
◆
Wide choice
You have a wide choice of beneficiary as follows:
◆ You can choose your husband or wife, other close
relatives or someone who is financially dependent on you.
◆ You can also nominate other people, such as a common
law spouse, a fiancé(e), a beneficiary under your Will or
even someone you are not related to, such as a close
companion or a registered charity. However, you should
note that the Trustees cannot consider a person within
these wider categories (apart from a beneficiary under
your Will) unless they have been nominated by you
on an Expression of Wish Form.
If you make more than one nomination, please ensure that the total of the percentages shown adds up to 100%.
MEMBER’S
SIGNATURE
DATE
PLEASE MAKE SURE YOU
COMPLETE THE DETAILS OVERLEAF
%
43

44
MEMBER’S SURNAME
FORENAMES
NAT. INS. NO.
PENSIONS REF. NO. (as shown on your Benefits Statement)
EMPLOYER
LOCATION
PLEASE MAKE SURE YOU COMPLETE THE DETAILS BELOW
PLAN PLAN 35 / PLAN 45 / NON-MEMBER (delete as appropriate)
FOR RHM PENSION
SERVICES’ USE
Please pass this Form to your Personnel or Pay Office who will send it to:
The Pensions Manager, RHM Pension Services Ltd, 96 George Street, Croydon CR9 1TB
EMPLOYEE REFERENCE EMPLOYER REFERENCE DATE
OCTOBER 2001

◆
Further information
This booklet has been kept as simple as possible, so
you should consider it as only a guide to the Plans. If
you would like more information about any aspect of
the Plans, please get in touch with your local Pensions
Liaison Officer or your Personnel or Pay Office.
Alternatively, you can contact RHM Pension Services
at the following address or log on to the RHM
Pension Services Website.
RHM Pension Services Limited
96 George Street
Croydon
Surrey CR9 1TB
Telephone 020 8686 5699
www.rhmpensions.co.uk

This booklet was published in October 2001 by RHM Pension Services Limited