I want to leave my BA pension scheme
You can choose to leave your BA pension Scheme (known as opting out) at any time before your intended retirement age.
Leaving your pension scheme is an important decision. You will be giving up valuable benefits for you and your family. If you decide to opt out of the Scheme, you will not usually be able to re-join at a later date. We recommend that you seek independent financial advice before you make this move. At the very least, you should provide your adviser with the NAPS Handbook, a benefits quotation, and details of your personal circumstances.
Some key facts about opting out of the Scheme
- You will no longer be covered for death in service benefits
- You will no longer be covered for ill health benefits
- You will not be able to continue paying AVCs
- You will not be permitted to rejoin the Scheme
- You will become 'contracted in' to the State Second Pension (formerly known as SERPS) and so will pay an extra 1.6% of your gross pay (up to a maximum limit) in respect of increased National Insurance Contributions.
The Pension Protection Fund (PPF)
It is important to note that a member who has opted out of the Pension Scheme and drawn or deferred their BA pension benefits would receive a similar level of compensation from the PPF as an active member of the same age who had not opted out.
There are various conditions that would have to be met before a scheme would even be accepted into the PPF. If accepted, the level of compensation you could potentially receive is determined by whether or not you have reached your Scheme NRA and is not dependent upon whether or not you are drawing a pension.
The amount of tax free cash that can be taken at pension commencement is however based on the value of your pension and would be affected by any restricted compensation amount available from the PPF if you are below normal retirement age.
For more information on the PPF and the level of benefits it pays you can refer to the PPF website www.pensionprotectionfund.org.uk.
If you decide to leave your pension scheme
If, after carefully considering all the points above and taking financial advice, you decide to leave your BA Scheme, you will need to write to us to advise that you wish to opt out of the Pension Scheme and from what date. The earliest opt out date is the 1st of the month following one clear calendar months notice from receipt of your letter.
The 'I'm leaving BA' section provides more information on what benefits you will receive.