The basics

• A Group Personal Pension is a group of personal pension plans arranged by an employer for their employees. Each employee has their own plan, which they can take with them if they change jobs.
• You can contribute a regular amount or simply invest a one-off lump sum, including a transfer from another pension plan. The minimum contribution is £20 gross.
• Employers and employees looking for a practical and tax efficient way to plan for the future may want to take advantage of Legal & General's Group Personal Pension 2000 Plan.
• These schemes are tax efficient. Any employer contributions are paid gross and are deductible as a business expense. Employer contributions are not chargeable to National Insurance and they are not classed as a benefit in kind.
• Contributions made by the member to their pension plan qualify for tax relief and any growth in their pension fund is free of UK income tax and capital gains tax. However, we cannot reclaim the tax paid on dividends from UK companies.
• Member contributions automatically include the benefit of basic rate tax relief. If they pay higher rate income tax, they will need to claim the extra tax relief through their tax office. The law and tax rates may change in the future and the value of tax relief will depend on their individual circumstances.
• Members of a group personal pension plan can contribute up to 100 per cent of their annual earnings, or £3,600 gross if greater, each year and still get full tax relief including higher rate (where appropriate) whatever type of pension is held. Members can contribute more than this but they wouldn't get tax relief on the excess. However a 40 per cent tax charge will be levied on any excess of the total contributions to all Registered Pension Schemes, including any paid by the employer, above the Annual Allowance.
• For the 2007/2008 tax year, the Annual Allowance has been set at £225,000. It will increase in stages to £255,000 for the tax year 2010/2011 and will be reviewed on an ongoing basis after that. This limit will not apply in the actual tax year retirement benefits are taken.
• If the value of a member's benefits from all their Registered Pension Schemes exceeds what is called the Lifetime Allowance (LTA), the excess will be subject to a tax charge. The standard LTA is £1.6 million for tax year 2007/2008 but their allowance may be affected by personal circumstances.
• There is a tax charge on the value of benefits over the Lifetime Allowance, which is currently 25 per cent if taken as income, with a further 40 per cent payable as PAYE tax on income. If the excess is taken as a lump sum a tax charge of 55 per cent will be levied.
• Members can take up to 25 per cent of their pension fund tax free (subject to the Lifetime Allowance) when they take their benefits.
• Employers and members can access and manage their pension schemes online.
• To make it easier to join a Group Personal Pension 2000 Scheme, we've simplified our joining facility. Contact us to find out how.

To find out more, read the Personal Pension 2000 Plan key features (PDF 355KB) document which is available to download as a PDF from the right-hand menu.

Your options

As an employee:

• Group Personal Pension plans are flexible. You can make contributions up to 100 per cent of your yearly earnings, or £3,600 gross if greater, each year and still get full tax relief including higher rate (if appropriate). You can pay this up to age 75, even if you are not working. However if your contributions exceed the Annual Allowance the excess will be subject to a tax charge.
• Group Personal Pension 2000 plans offer great flexibility - you can stop or start contributions according to your personal circumstances.
• You have considerable choice over where your contributions are invested with our Personal Pension 2000. We offer a comprehensive range of investment funds, including a With Profits option.
• You can normally take your pension when you're aged between 50 and 75, although the minimum retirement age will rise to 55 for those taking their benefits after 5 April 2010.
• You don't need to stop working to take your benefits.
• To give you more choice over where to invest your contributions, we offer a range of
  Legal & General and external funds.
• You can opt for a lifestyle profile that aims to reduce investment risk as you approach your chosen retirement age.
• You can take out a separate Pension Payment Protection Plan to protect your contributions, should you be unable to work due to sickness or accident.
• If you wish to invest in With Profits, there is a minimum plan term of five years.

Risk factors

All investments carry an element of risk. Please bear these points in mind:

• The value of the units which make up a fund can go down as well as up, so the value of a member's fund is not guaranteed. It is particularly important to remember this if you are a member and you are close to retirement. Please remember that the money is tied up until a member takes their retirement benefits.
• The amount of pension income provided by a retirement fund will depend on a number of things, including investment returns and the rates available to buy a pension when a member decides to take this benefit.
• The fund or funds a member chooses to invest in will have specific risks. These risks are described in the leaflet, Choosing Your Investment Fund (PDF 177KB).
• The law and tax rates may change in the future and the value of tax relief will depend on an individual’s circumstances.
• Past performance is not an indicator of future performance.
• If there is a decision to cancel within the 30 day cancellation period, the refund may reflect any reduction in investment value.

If you are an employee:

• What you receive from With Profits investments will depend on future bonus rates, which are not guaranteed and can change. Future bonus rates may be reduced if, for example, our expenses are higher than anticipated or there is an increase in the expected cost of guarantees and options for With Profits policies.
• Any investment in With Profits will share in the risks of other With Profits pension plans which can reduce your bonuses and therefore the amount we pay you. You also share in the risks of other With Profits policies such as bonds.
• We write With Profits and non profit policies in our Long Term Fund.  We provide guarantees for both With Profits and non profit policies and the assets in the whole fund are ultimately available to meet them. This means that, although you may benefit from support from the assets backing non profit business, we could reduce the amount we pay you if we have to use the assets backing With Profits business to support non profit business.
• We may reduce the amount we pay if you take your benefits early, transfer or switch out of With Profits. This is called a Market Value Reduction. We use the Market Value Reduction to treat customers who stay in With Profits fairly, as well as those who withdraw from it. The Market Value Reduction will usually be applied when investment conditions have been insufficient to support bonuses. It will also account for additional deductions that may be required to cover the cost of guarantees and options for With Profits policies.
• We can increase our charges but we will let you know before we make any change.