UPDATE HAYS PENSION SCHEME. Keeping you up to date with how your Scheme is performing THE TRUSTEE BOARD KEEPING IN TOUCH STATEMENT PAGE 05

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1 UPDATE HAYS PENSION SCHEME 2015 The Annual Newsletter for the Hays Pension Scheme PAGE 05 THE TRUSTEE BOARD Keeping you up to date with how your Scheme is performing PAGE 06 PAGE 11 PAGE 16 FINANCIALS SUMMARY FUNDING STATEMENT KEEPING IN TOUCH

2 CONTENTS Page 3 Chairman s statement Page 4 Pensions news and fighting fraud Page 5 The Trustee Board Pages 6 8 The financials Pages 9 & 10 Investments Pages Summary Funding Statement Pages 14 & 15 Making the most of retirement Back page Keeping in touch CHAIRMAN S STATEMENT Welcome to the 2015 edition of Update the newsletter about pensions for members of the Hays Pension Scheme (the Scheme). It s been a busy year in terms of the Scheme s funding. The last actuarial valuation was undertaken as at 30 June 2015, as required by law, and the results of the valuation will be communicated to you in next year s Update newsletter. On page 11, you will find an article about the importance of actuarial valuations. You may be aware that there have been more changes in the 2015 Budget which apply mainly to pre-retirees and these have been covered on page 4 of this newsletter, to help you keep abreast of the changes in case they affect you. The Company has embarked on a flexible retirement exercise for members aged 55 and over and an update on that will be provided next year. I would like to take this opportunity to thank my fellow Trustees for their commitment to the Scheme. During the year, there were some changes to the Trustee Board. Mark Berry stepped down The last actuarial valuation was undertaken at 30 June 2015 and the results will be communicated to you next year. from his role on 22 September 2015 and has been replaced by Ian Pratt. I would like to thank Mark for his hard work and valued input to the Trustee Board over a number of years. I would also like to take this opportunity to let you know that I will be standing down as Chairman of the Trustee Board in April 2016 and will be handing over to Andrew Parker, one of my colleagues at Law Debenture. Andrew brings with him a great deal of knowledge and experience of pension issues and I m sure he will look after your interests well in the future. We are always looking for feedback on our pension communications so please get in touch if you have any suggestions or comments. Finally, I hope you enjoy reading this year s edition of the newsletter. Philip Gillett Chairman and Independent Director 02 03

3 PENSIONS NEWS THE TRUSTEE BOARD State Pension update The government is making changes to the age at which individuals can access their State Pension. Under current legislation, the State Pension age will increase to age 66 by October 2020 and then further to age 67 between 2026 and If you are already receiving your State Pension, don t worry as you are not affected by the changes. Cashing in annuities The government has confirmed plans to allow existing annuity holders to cash in their annuities in return for a cash lump sum from April While it is currently possible for individuals to cash in their annuity, at the moment anyone who does so will incur a tax charge - 55% in most cases but it can Fighting fraud be as high as 70%. The government is currently in consultation on how the new proposals will be implemented, with the outcome expected to be published after the 2016 Budget announcement. An annuity is a financial product provided by an insurance company, which provides an income for the rest of your life. Your Hays pension is paid directly from the Scheme and is not a purchased annuity. Therefore your Scheme pension is not affected by these changes. If you have purchased an annuity with a separate provider you will need to contact them directly for more information. Company pension flexibilities exercise The Company is carrying out an exercise to offer deferred members aged 55 and over the opportunity to transfer their benefits out of the Scheme. As you re already retired, this does not affect you. The Scheme is looked after by a Trustee company with a Board of Trustee Directors. The Trustee is legally responsible for managing assets of the Hays Pension Scheme and ensuring that members receive their correct benefits. THE MEMBERS OF THE TRUSTEE BOARD ARE: Chairman and Independent Director: Company nominated Directors: Robert Potter Mark Berry (resigned 22 September 2015) Ian Pratt (appointed 22 September 2015) Philip Gillett (to be replaced by Andrew Parker) Independent Director: Alan Saunders Financial scams are still a problem. Scammers may contact you over the phone, online or in person, with some even requesting personal details. Remember, your bank and other legitimate organisations wouldn t ask for these details, so it s important to keep these safe. You can find out more details about financial scams by going to Member nominated Directors: Paul Dungate Charles Logan Andrew Timlin Secretary to the Trustee and Pensions Manager: Kath Bedford 04 05

4 THE FINANCIALS In this section you can find out about the Scheme s financial position, see a detailed breakdown of the Scheme s income and expenditure and find updated membership figures. You will also find information about how the Scheme s assets are invested and how these investments have performed during the last year. Key points Membership As the Scheme closed to new entrants on 30 June 2012, deferred members will hold their benefits in the Scheme until they retire. The breakdown below shows how the deferred and pensioner membership has changed over the past year. Deferred members 55m increase in fund value over the year. Investments returned 52m during the year. SUMMARY FUNDING STATEMENT The Trustee provides you with a Summary Funding Statement annually to update you on the most recent funding position of the Scheme. In this year s Update, we explain what the Summary Funding Statement is. The results of the latest triennial actuarial valuation as at 30 June 2015 will be known later in the year. Why are actuarial valuations needed? It is very important to know if a scheme is appropriately funded - this involves carrying out a formal actuarial valuation every three years to check how the scheme s assets compare to its liabilities. The Trustee is responsible for managing the valuation process and appoints an independent Actuary to carry out a detailed financial review of the Scheme. The results of the valuation usually form the grounding for future decisions about the level of contributions required. If there is a funding shortfall, the Trustee will agree with the Company the level of contributions needed to ensure the Scheme becomes fully funded in the future. A Recovery Plan will be put in place to set out the level and frequency of the contributions agreed between the Company and the Trustee. 30 June ,338 Why should I read the Summary Funding Statement? 30 June 2014 Pensioner members 30 June ,795 5,476 It... Tells you how well funded your Scheme is Summarises the results of the last formal valuation Provides funding updates between the valuations Details the levels of support provided by the Company 30 June ,

5 THE FINANCIALS How the value of the Scheme has changed The Scheme receives income through a combination of Company contributions and investment returns. As the Scheme is closed, there are no-longer any member contributions. The income received is used to pay members benefits and to meet the cost of running the Scheme. In addition, money is invested to fund pensions due to be paid in the future. The summary below shows how the value of the Scheme s assets has changed over the past year. 30 June 2015 ( 000s) Value at beginning of year 577, June 2014 ( 000s) Value at beginning of year 531, Income 23,167 Returns from investments 52,752 Income 23,728 Returns from investments 41, Expenditure 20,830 Expenditure 19,571 = = Value at end of year 632,673 Value at end of year 577,584 Income and expenditure A breakdown of the Scheme s income (money paid in) and expenditure (money paid out) is shown below. Income ( 000s) ( 000s) Company contributions 13,580 13,184 Member contributions - - Other income Investment income 9,480 10,379 Total income 23,167 23,728 Expenditure ( 000s) ( 000s) Pensions paid 11,895 11,227 Lump sums on retirement 1,901 3,701 Lump sums on death Payments to and in respect of leavers 1, Other payments Administration and investment expenses 5,200 4,271 Annuities purchased Total expenditure 20,830 19, June June 2014 You can obtain a copy of the full report and accounts by contacting the Pensions Manager (contact details are on the back page).

6 THE INVESTMENTS The money in the Scheme is invested to ensure that the value of the Scheme s assets keep up with the cost needed to pay members benefits when they become payable. The Trustee regularly reviews the Scheme s investment managers and the allocation of the Scheme s assets, with the dayto-day management of the assets being delegated to the investment managers. Investment performance To see how the Scheme s investments are performing, they are measured against a benchmark. This is used to judge how well they are performing. The performance of the Scheme s investments in comparison with their relative benchmarks is shown below: 1 year (%) 3 years (%) 5 years (%) Actual Benchmark Actual Benchmark Actual Benchmark The allocation of assets at 30 June 2015: Bond assets Total: 72.9% Global Multi-Asset Credit 7.3% Corporate bonds 27.5% Growth assets Total: 27.1% UK equities 5.7% Absolute return bonds 6.1% Gilts and equivalent bonds (LDI) 25.2% Property 6.8% Global equities 11.3% Emerging market equities 4.2% Absolute return 5.9% The money in the Scheme, known as its assets, is invested in various asset classes in line with the Trustee s investment strategy. Note: these figures are annualised. The Scheme s investments have outperformed their benchmarks set by the Trustee over the past five years. The market value of the Scheme s assets grew by 55 million from 30 June 2014 to 30 June

7 Ongoing funding position In between each three-yearly formal valuation, the Scheme Actuary carries out an annual check of the Scheme s financial security to give an estimated ongoing funding position. The 2015 annual update indicated the current funding position is ahead of the expected funding level position in the recovery plan. What was the ongoing funding position as at 30 June 2015? The funding position as at 30 June 2015 compared with the valuation results as at 30 June 2012 is shown below. 30 June June 2012 What is Hays doing to reduce the deficit?? At 30 June 2012, the actuarial valuation showed that the funding level was lower than the amount needed to pay members benefits. To address this, Hays plc agreed to continue to pay contributions of 12.8 million a year from the last valuation towards the Scheme. What would happen if the Scheme were to wind up? Winding up is when a scheme is discontinued and the benefits members have built up are bought out with an insurance policy. Under current legislation, the Trustee is obliged to inform you how well funded the Scheme is if it were to wind up. Neither Hays plc nor the Trustee has any plans to wind up the Scheme. Funding level 84% Deficit 121m Funding level 77% Deficit 145m What else do I need to know? The Trustee must inform you each year whether or not Hays has taken any money out of the Scheme and the Trustee is happy to confirm, once again, that Hays has not taken any money out of the Scheme in the last 12 months. Finding out more You can find out more about the Scheme s funding or request the Scheme s financial documents by contacting the Pensions Manager (details on the back page). 748m 627m 624m 479m Liabilities Assets Liabilities Assets The latest position shows that there has been a significant increase in the Scheme s funding level but there is still a deficit

8 MAKING THE MOST OF RETIREMENT With more and more retirees looking to explore opportunities for further learning, new leisure activities and voluntary work, we ve included some useful information below if this is something you may be interested in. Courses The opportunities for further learning today are excellent, ranging from more formal courses to leisure activities at local universities and colleges. A good place to start is by visiting your local library, which will be able to provide a list of courses and activities in your local area. If you are interested in a particular subject and would like to study it in more depth, the Open University (OU) might be a good option for you. The OU teaches through its own unique method of distance learning, which means you can study when and where it suits you. Most courses do not require any previous qualifications in order to enrol, and there are around 600 to choose from. For more information, phone or visit Other organisations include the University of the Third Age (U3A); a self-help organisation for people no longer in full-time employment providing educational, creative and leisure opportunities in a friendly environment. To find out more visit or call There s also the Workers Educational Association (WEA); the UK s largest voluntary provider of adult education. For more details visit Voluntary work Voluntary work is a great way to pass on your own knowledge and expertise to others, and most towns have volunteer centres which aim to match potential volunteers with local organisations. To help find a role suited to you, it s important to think about what type of voluntary work you would enjoy and the time you have to commit to it. The organisation Reach finds part-time, expenses only jobs for retired business people who want to use their skills to help charitable organisations. Visit The National Council for Voluntary Organisations will be able to provide information about a wide-range of opportunities and how to get involved. Visit for more details. USEFUL CONTACTS IN RETIREMENT Age UK Provides a range of services, information and support on various subjects, including State benefits, grants and security. Phone: Visit: The Pensions Advisory Service Provides information and advice on pensions (but does not deal with individual pension queries). Phone: Visit: The Pension Tracing Service Helps you to find any pension schemes you have lost touch with. Phone: Visit: TOP - Tax Help for Older People Offers independent advice from qualified tax advisers for people in later life who have a low income. Phone: Visit: Winter Fuel Payment Helpline Government-run information service providing information about the Winter Fuel Payment, guidance on reporting changes to your circumstances and a claim form. Phone: Visit:

9 KEEPING IN TOUCH Keep us updated Have you completed an Expression of Wish form? It s important to keep this updated so that in the event of your death we know who you would like to receive any lump sum death benefits. If you ve been receiving your pension for more than five years you don t need to update your Expression of Wish form. Please remember that if your details or circumstances change, you will need to let us know. You ll need to inform us of any changes, such as a house move so we ll be able to keep you updated about your pension. CONTACT DETAILS If you have any queries about your pension, or if your personal details change, please contact the Scheme administrator: hays@equiniti.com Phone: Hays Pension Administration Team Equiniti Pension Solutions Sutherland House Russell Way Crawley West Sussex RH10 1UH For other enquiries, or if you would like to see a copy of the full Report and Accounts, please contact the Pensions Manager: pensions@hays.com Phone: Kath Bedford Pensions Manager Hays plc 250 Euston Road London NW1 2AF Designed and produced by Anthony Hodges Consulting Limited_2016_102422_Retiree 16