Tax-free lump sum

You’re allowed to exchange part of your pension for a lump sum payment – under current regulations this lump sum would be tax-free. The maximum you’re allowed to exchange is normally 25% of the total value of your pension, subject to an upper limit of £268,275.

For DB members which have Defined Contribution (DC) benefits, also known as the '1% top up' or AVCs, these benefits were transferred to the L&G Master Trust in February 2022. 

The Trustee and Deutsche Telekom (UK) Ltd have agreed with L&G that, subject to the Trustee and DTUK considering it appropriate to do so, DB Section members may transfer back funds from the L&G Plan to the TMI Scheme, for the purposes of funding (in whole or in part) their Pension Commencement Lump Sum (PCLS) when drawing their DB benefits.

Where a transfer back is permitted, the amount that may be transferred back (known as Switchback) would include amounts built up as an active member of the L&G Plan from 1 November 2021. However, it would not include any amounts that have been transferred into the L&G Plan from any pension arrangement other than the TMI Scheme. The amount that members can transfer back to the TMI would also be limited to the maximum amount needed to fund their PCLS in respect of their DB Section benefits. 

It is important to note that while the Trustee and DTUK have agreed for the time being to continue to allow members with DB benefits in the DB Section to use their DC benefits (in whole or in part) any PCLS they may take at retirement in respect of their DB Section benefits, this cannot be guaranteed and may change in the future (for example, as a result of changes to legal or tax requirements or in connection with funding and investment considerations of the TMI Scheme).

Disclaimer

No information contained in this site alters any member’s benefits or entitlement under the Scheme's trust deed and rules, which can be amended from time to time. In the event of there being any difference between the information set out on this site and the provisions of the Scheme’s current trust deed and rules, the latter will prevail.

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For queries about your DB Section benefits
contact the T-Mobile International UK Pensions Team on:
Tel: 0333 11 11 222
Email: [email protected]

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