Explaining your pension

Your BNP Paribas Pension Plan is one of the main employee benefits you’ll receive whilst being a BNP Paribas employee, so it’s worth getting to know all the ins and outs of the Plan. If you want to, you can take a ‘hands-off’ approach, and your contribution level, your investment choices and your retirement age will all be set for you. 

If you want to take a more active approach, our booklet will guide you through five decisions you can make to  ensure your retirement savings are on track.

Automatic enrolment is a government initiative designed to help more people save for retirement through a workplace pension. It makes it compulsory for employers to automatically enrol eligible workers into a pension plan.

You may have been enrolled in your employer’s pension plan as soon as you started working there. As a member of a workplace pension plan you’ll have your own pension pot, where any contributions made by you or your employer will be invested.

As a UK resident, you may be eligible to receive tax relief from the government. Many employees enter into “salary sacrifice” arrangements with their employer, which means that you’ll take reduced salary while your employer increases its contribution to the pension scheme. In this case, there is no tax relief to claim because you’ve already been taxed on a lower salary amount.

You don’t have to do anything to remain a member, but if you decide not to stay in the plan, you can choose to opt out when you’re first enrolled or you can stop contributing later on.

While you may have been automatically enrolled, it’s up to you if you wish to leave the plan. There are time limits for opting out and you’ll only get back what you paid in. Any contributions your employer has made will be returned to them. You can stop contributing at any time after the opt-out deadline, but any contributions you or your employer has made after that point will remain invested.

If you choose to opt-out, you have the right to opt back into the plan at least once a year. You will also be automatically enrolled back into a plan by your employer every three years if you meet certain criteria. You can then opt out again.

Before you decide, consider the employer contributions, tax relief and other benefits that you would be giving up:

• While a State Pension may provide some income, it’s unlikely to provide you with the retirement you want.
• We’re all living longer which means our money will need to last longer too. It makes sense to start saving earlier.
• With the cost of living increasing every year there really is no better way to reach your retirement goals than by contributing into a pension.

You can find out more about opting out on the MoneyHelper website.

Once enrolled, your employer will contribute a certain percentage of your salary to the plan, and you can choose to maximise your pension savings by contributing more. In some cases, your employer will match these additional contributions. You can decide if and how much you’d like to contribute, and should think carefully about how much you may need to save to get the retirement you want.

Like most things in life, there are charges associated with your pension plan. Here’s how it works:

There are no initial charges for the funds. So this means if you contribute £100 to your pension, £100 is invested into your chosen funds. To make sure your pension is monitored and managed, there are certain charges that apply to the funds you invest in. This applies to both the default investment option (lifestyle strategy) or whether you self-select your own investments.

These charges are shown as a ‘Total Expense Ratio’ (TER). They are deducted from each fund’s assets and are then reflected in the daily price for that fund. They are not a separate charge taken from your pension pot.

To find out more about your fund choices and charges, log in to Spectrum.

When you’re ready to retire, you can choose what to do with your pension pot. As with all pension products, you cannot normally access your money until the minimum pension age, which is currently 55 (the government is considering increasing this to age 57 from 6 April 2028). Your plan’s normal retirement age, as set up by your employer, may be different to this. You can view and make changes to your details in Spectrum.