How does my pension work?

Your TotalEnergies pension makes up an important part of your retirement income.

If you have been a member of our Defined Benefit (DB) Plan, your pension will be built up as annual pension, that is payable for life. You will also have the option to choose how you wish take to this at retirement.

TotalEnergies have traditionally provided members with what is known as a Defined Benefit (DB) Plan. This is sometimes referred to as a ‘Final Salary’ pension. This basically means that the pension you receive at retirement will be based on your salary and the number of years you’ve worked for TotalEnergies, rather than the amount you’ve paid into the Plan. The DB section of the Plan is closed to new joiners, between 2002 - 2007 and then closed to future accrual on 31st December 2021.

The Annual Allowance (AA) is the amount of pension benefits you can build up in a single tax year without a tax charge applying.

The standard AA is £40,000 per year, and has been since 2016. For the DB Plan, it's based on the capital value of the increase in your pension benefits over the tax year.

It’s possible to save more than the standard £40,000 by carrying forward an AA from previous years.

Also, there are currently two situations where your AA may be lower than £40,000

  • If you have a high income totalling over £240,000 per year (from 2020/21). This threshold income is different for earlier tax years.
  • If you have accessed some of your pension savings from a Defined Contribution (DC) arrangement.

You can find out more about AA and what it potentially means for you on the Gov.uk website: https://www.gov.uk/tax-on-your-private-pension/annual-allowance

The Lifetime Allowance (LTA) is the amount of pension benefits you can build up over your lifetime, whilst still enjoying the full tax benefits.

For the 2022/23 tax year the standard LTA is £1,0731m – this has been frozen at this level until 2025/26 tax year.

You can find out more about the LTA and what it potentially means for you on the MoneyHelper website: https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/lifetime-allowance-for-pension-savings