NILGOSC NEWS 2018 FOR PENSIONERS OF THE SCHEME

Transcription

1 NILGOSC NEWS 2018 FOR PENSIONERS OF THE SCHEME

2 WELCOME TO THE 2018 NILGOSC ANNUAL PENSIONERS NEWSLETTER. It s been a busy year in the Scheme with membership growing to 122,587 by March 2018 and the Scheme valued at an all-time high of 7.55bn. We hope you enjoy reading this Newsletter. MEMBERS 122,587 VALUE 7.55BN CONTENTS PENSION PAYMENT DATES 4 NEWS 5 8 My NILGOSC Pension Online Save paper Choose the greener option Guaranteed Minimum Pension Reconciliation Exercise Opportunities in Retirement NILGOSC Soup Kitchen YOUR PENSION 9 17 Let us know Paying Tax in Retirement Frequently Asked Questions Maximising your State Pension Possible Changes to your Pension if you have been Re-employed Survivors Benefits Will you pay a death grant when I die? Power of Attorney WE RECOMMEND THAT YOU TAKE THIS OPPORTUNITY TO: REVIEW OF THE YEAR 2017/18 Membership Financial Statement How we Invest Responsible Investment Check and update your contact details See page 9 Update your Death Grant Expression of Wish See page 9 DATA SHARING AND ACCESSIBILITY Data Protection National Fraud Initiative Accessibility for our Members CONTACT DETAILS 28 3

3 PENSION PAYMENT DATES The table below shows the dates on which your pension will be paid each month. NEWS MY NILGOSC PENSION ONLINE Do you have access to the internet? Would you be interested in signing-up for My NILGOSC Pension Online? ONCE REGISTERED, YOU WILL BE ABLE TO: TIMETABLE 2018 December Thursday 20th 2019 January Thursday 31st February Thursday 28th March Friday 29th see a simplified version of your pension record including your payslips and P60s tell us about any changes in your home address, telephone number, address or bank details update your Death Grant Expression of Wish contact us with a direct query view important documentation You should have received a registration letter in November which included instructions on how to sign up for this exciting new service. April May June July August September October November December Tuesday 30th Friday 31st Friday 28th Wednesday 31st Friday 30th Monday 30th Thursday 31st Friday 29th Friday 20th In order to use My NILGOSC Pension Online you need access to a personal computer or a mobile device, including smart phones, tablets and laptops. 4 5

4 SAVE PAPER CHOOSE THE GREENER OPTION Here at NILGOSC we want to be more environmentally friendly, so we are encouraging you to register your address with us. We can then send you non-personalised communications, such as this annual newsletter and general Scheme information, by rather than post. To register or update your address please visit our website and provide us with your: full name address date of birth National Insurance number All personalised information such as your yearly P60 and any monthly payslips will continue to be posted to your home address for the time being. However, if you register you can view these on My NILGOSC Pension Online. P60 GUARANTEED MINIMUM PENSION (GMP) RECONCILIATION EXERCISE THE GMP RECONCILIATION EXERCISE IS COMING TO AN END If you were a member of the LGPS (NI) between 6 April 1978 and 5 April 1997, you will have been contracted out of the Additional State Pension and will have benefited from paying a lower rate of National Insurance contributions. As a result, members were guaranteed a certain amount of pension in place of the Additional State Pension they were giving up. This is commonly referred to as the GMP (Guaranteed Minimum Pension). With the introduction of the new State Pension, all pension schemes across the UK have been asked to check their members contracting out details and GMP amounts against the records held by HMRC. Our team has almost completed the reconciliation exercise and approximately 38,401 records have been checked with less than 1% of cases requiring corrective action. NILGOSC will only contact you if it is identified that your pension needs to be amended because of the reconciliation. 6 7

5 OPPORTUNITIES IN RETIREMENT Being retired may give you the opportunity to try new things or rediscover an interest that you didn t have time to pursue when you were working. There are lots of opportunities out there that you can try such as volunteering, being a coach or mentor, learning for fun, developing hobbies and interests or working part-time. Older people bring a wealth of skills and expertise to volunteering or mentoring young people and by passing on your skills and learning you can make a real difference to people s lives. Learning can also be fun and a great way to relax and socialise. Free courses are easy to find and if you re learning just for fun, you can choose anything you find interesting whether it s a new hobby or a subject you already know something about. More information on opportunities in retirement can be found on the NI direct website opportunities-retirement NILGOSC SOUP KITCHEN TO RAISE MONEY FOR DEMENTIA NI NILGOSC staff were treated to a range of delicious soups last month to raise money for Dementia NI in our very first NILGOSC Soup Kitchen. Dementia is an umbrella term for a range of progressive conditions that affect the brain. Dementia NI aims to challenge the stigma associated with dementia and support people who are living with this illness. NILGOSC is delighted to support Dementia NI as our charity of the year for 2018 and not a drop of soup was left! For more information on Dementia NI you can visit their website YOUR PENSION LET US KNOW NEW HOME? DON T FORGET TO LET US KNOW! It is important to let us know if you move house because if we get undelivered mail sent back to us your pension will be stopped. You can update your address through your My NILGOSC Pension Online account or if you have chosen not to sign up to this service you can contact us by phone, , post or in person at our office. CHANGING BANK OR BUILDING SOCIETY? If you want us to pay your pension into a different account, you can update your bank details using My NILGOSC Pension Online. Alternatively, you can notify the payroll team in writing or call into the office in person. Please allow us enough time to make the change and let us know three weeks before your next payday so we don t try to make the payment to your old bank account, which may have already been closed. HOW TO LET US KNOW IF SOMEONE HAS DIED The quickest way to inform us of the death of a pensioner member is to telephone This will allow us to get any survivors benefits processed and paid as soon as possible and ensure that we avoid overpaying the deceased s pension. As a public sector organisation, we must recover all overpayments. DEATH GRANT EXPRESSION OF WISH If you die after retiring on pension, your loved ones may receive a payment, known as a Death Grant. You can let us know who you would like to receive the Death Grant by logging onto your My NILGOSC Pension Online account and completing or updating the Death Grant Expression of Wish section. You can also download the Expression of Wish form from the Pensioners section of our website complete it and post it to us. Please see page 16 for more information. 8 9

6 PAYING TAX IN RETIREMENT I RECEIVE BOTH A STATE PENSION AND A PRIVATE PENSION, HOW IS MY TAX PAID? Her Majesty s Revenue and Customs (HMRC) decides your tax code and tells us how much tax to deduct. All members have a personal allowance, which is the amount of money you can receive from all sources without paying income tax. This year the allowance increased to 11,850. NILGOSC will deduct any tax you owe before we pay you each month. We will also deduct any tax you owe on your State Pension. If you are receiving payment from more than one provider, (e.g. from NILGOSC and a private pension) HMRC will inform one of your providers to deduct the tax for your State Pension. This will be shown in your P60 at the end of the tax year. NEW SCOTTISH TAX RATES AND BANDS Scotland has introduced a broader range of tax bands than the rest of the UK, including a starter rate band of 19%. HMRC will determine whether you are a Scottish taxpayer based on where you live and will tell us if the Scottish tax rates apply to you. You can tell if you are paying Scottish Tax as your tax code will have an S in front of it. IF YOU CONTINUE TO WORK AFTER YOUR NORMAL PENSION AGE If you are still working your employer will take off any tax from your pay that applies to your earnings and your State Pension. If you are self-employed you must complete a Self-Assessment tax return at the end of the tax year. You must declare your overall income including money from your NILGOSC pension, State Pension and any other private pension. WHAT IF I THINK MY TAX CODE IS WRONG? If you have any queries on your tax code, you should contact the tax office directly on (or if overseas). NILGOSC does not have any information on why a tax code has changed and does not have the ability to change a tax code without authorisation directly from HMRC.????? You can view the Scottish Income Tax bands by visiting the following link: If you have any queries about your own tax position, please contact HMRC directly. For more information on paying tax in retirement see:

7 FREQUENTLY ASKED QUESTIONS HOW OFTEN WILL YOU SEND ME A PAYSLIP? You will receive a payslip when your first retire and then every April and May, to show the new rate with pensions increase. Apart from that we only produce a payslip when your gross monthly pension changes by 1 or more after deductions or your bank account or tax code has changed. You can view your payslips on My NILGOSC Pension Online (see page 5). IF I DECIDE TO GO BACK TO WORK, WILL MY PENSION BE AFFECTED? If you get (or already have) another job with any employer who offers the LGPS (NI), then you must tell us immediately whether or not you join the Scheme again. For most people, returning to work with an employer in the Scheme will not affect their pension. However, the rules on additional compensation pensions are different and these pensions can be reduced or suspended when a pensioner becomes re-employed. If you are unsure whether your employer is in the Scheme, please visit the employers section of our website DO I NEED TO DECLARE MY NILGOSC PENSION AS INCOME? If you are claiming any type of social security benefit, i.e. pension credit, universal credit, Employment Support Allowance or housing benefit, your pension from NILGOSC must be declared. If you don t, the authorities may treat it as fraud. If in any doubt check with your local benefits office.? Q1. MAXIMISING YOUR STATE PENSION How can you ensure that you are maximising your State Pension? If you have gaps in your National Insurance record you may be able to pay voluntary National Insurance contributions to increase your State Pension. Normally you must make the top-up payment within six years of missing the original payment, however, individuals reaching State Pension Age on or after 6 April 2016 have until 5 April 2023 to pay for any gaps from 2006/07 to 2015/16. Check if you are on track to receive a full State Pension at: POSSIBLE CHANGES TO YOUR PENSION IF YOU HAVE BEEN RE-EMPLOYED If you were made redundant by a Scheme employer and were awarded an additional compensatory pension and were then re-employed by the Youth Justice Agency or Glenmona Resource Centre, you may have had your compensatory pension reduced or suspended. The Youth Justice Agency left the NILGOSC Scheme on 31 March 2015 and Glenmona Resource Centre left the Scheme on 1 July 2016, therefore your compensation benefit may need to be reviewed. If you think this might affect you please contact the payroll team on

8 SURVIVORS BENEFITS While many of us don t want to think about dying, it may give you peace of mind to know that the Scheme provides survivors benefits to your loved ones. An annual pension could be paid to your: husband or wife civil partner eligible cohabiting partner eligible children If you die after retiring on pension, your next of kin or person dealing with your estate must inform us immediately. Before any benefits are paid out, NILGOSC must check the eligibility of the claim. In the case of a spouse or civil partner, it s quite simple and all we require to see is the marriage or partnership certificate and a copy of the claiming dependant s birth certificate. In the case of a cohabiting partner it will be necessary to prove that you were cohabiting partners (living together) and that the eligibility criteria, specified within the Regulations have been met. Although we are still awaiting amended regulations, we understand the criteria for cohabiting partners will be as follows: you must have lived together as if married for at least two years, and your partner must be someone you are free to marry. So, if either of you is still married or in a civil partnership with someone else, you wouldn t be classed as cohabiting partners under the regulations, and neither you nor your cohabiting partner have been living with someone else as if you/they were husband and wife or civil partners, and you must be able to prove that you were financially dependent or financially interdependent on each other. This means that you rely on your joint income to support your standard of living even if you don t contribute equally. These criteria will have to be met for a continuous period of at least two years prior to death and is only applicable to members who retired from the Scheme on or after 1 April WHAT DOES MY COHABITING PARTNER HAVE TO DO WHEN I DIE? When you die, NILGOSC will need your cohabiting partner to provide us with documents covering the last two years to prove the above criteria was met. Examples are credit card bills, rates/mortgage naming you both, bank statements at the same address or utility bills

9 WILL YOU PAY A DEATH GRANT WHEN I DIE? Sometimes NILGOSC will pay a Death Grant when you die as a retired member. This value depends on when you left (stopped contributing to) the Scheme, your age and how long you have been receiving a pension from us. IF YOU LEFT THE SCHEME BEFORE 1 APRIL 2009 There will be no death grant as you have already been receiving a pension for more than 5 years. IF YOU LEFT THE SCHEME BETWEEN 1 APRIL 2009 AND 31 MARCH 2015 Your Death Grant will be 10 times the value of your yearly pension less the pension already paid. No death grant will be payable after you have been receiving your pension for ten years. IF YOU LEFT THE SCHEME AFTER 1 APRIL 2015 Your Death Grant will be 10 times the value of your yearly pension less the pension already paid, and any lump sum taken by giving up pension. No death grant will be payable after you have been receiving your pension for ten years. IF YOU ARE OVER AGE 75? No lump sum or death grant is payable when you die, no matter how short a time you have been on pension. POWER OF ATTORNEY There may come a time when you need someone to manage your financial affairs for you e.g. to advise us if you change your bank details. You can appoint a friend, family member or a professional as a Power of Attorney so they can act on your behalf. A Power of Attorney is a legal document that ceases when you become mentally incapable of managing your affairs. A different type of Power of Attorney called an Enduring Power of Attorney will continue. It is important to remember that mental incapacities can affect anyone at any time, for example because of an accident or illness. To be effective all Enduring Powers of Attorney need to be registered with the High Court (Office of Care and Protection) but registration is not required until the point where your attorney believes you are no longer capable of managing your own affairs. You can also limit the powers of an attorney e.g. you may wish them to handle your money but not be able to sell your house. For more information on Death Benefits see our website at: See page 9 for information on how to let us know who you would like to receive your Death Grant. For more information on Power of Attorney see:

10 REVIEW OF THE YEAR 2017/18 The last year has been a busy one for NILGOSC with membership increasing to 122,587 members by 31 March. MEMBERSHIP At 31 March 2018, the Scheme had: PENSIONERS We pay over 35,000 pensioners every month A total of 160,531, was paid in pensions in 2017/18 Pensions were increased in April 2018 by 3% 56,727 contributing members 30,841 deferred members 35,019 pensioners EMPLOYERS At 31 March 2018, the Scheme had 175 employing authorities in the Scheme 95% of employing authorities rate overall satisfaction with NILGOSC service as good or excellent 96% OF PENSIONERS RATE CUSTOMER SATISFACTION AS GOOD OR EXCELLENT VALUE OF FUND At 31 March 2018 the fund was worth 7.55 billion We are the 9th largest Local Government Pension Scheme Fund in the UK by total assets Our 5-year investment return was 9.8% MORE ON PAGES

11 FINANCIAL STATEMENT The statement below details NILGOSC s Fund Account for 2017/18 and 2016/17. The full version of NILGOSC s financial statements is included in our Annual Report which is available on request or can be viewed on our website: INCOME 2017/18 ( 000) 2016/17 ( 000) Employers contributions 201, ,649 HOW WE INVEST During 2017/18 the Fund increased by 466 million, giving it a total value of 7.55 billion at 31 March As a pension scheme with benefits payable far into the future, NILGOSC takes a longer-term approach to investment to avoid undue focus on short-term events and volatility. We have therefore set an investment target which looks at returns over a 3 and 5 year period. The table below shows our investment returns compared to our target, which is the Consumer Price Index (CPI) +5%: Employees contributions 57,012 54,419 Transfers In 10,659 8,581 Investment Income 110,634 73, , ,564 EXPENDITURE Benefits Paid (229,045) (232,538) 3 YEARS 5 YEARS NILGOSC 8.7% 9.8% CPI + 5% 6.8% 6.4% Payment on account of leavers (6,287) (4,080) Administration expenses (4,674) (6,281) Investment management expenses (19,823) (19,267) (259,829) (262,166) NET INCOME 119,855 80,398 OPENING NET ASSETS OF THE SCHEME 7,082,982 5,820,140 Net income 119,855 80,398 Change in market value of investments 346,160 1,184,479 Net actuarial (losses)/gains recognised in the year CLOSING NET ASSETS OF THE SCHEME 200 (2,035) 7,549,197 7,082,982 Like many investors, NILGOSC enjoyed a relatively smooth and rewarding twelve months in respect of its investment portfolio. It was a strong year for equity markets across the globe, particularly for US stock markets which delivered positive returns for every month of 2017, the first time this has happened since 1958! After fifteen months during which equity markets climbed steadily higher, some volatility returned in February 2018 as stock markets started to react negatively to global political events. Despite share prices falling slightly in the final quarter, equities still provided a positive return for the year, as did the Fund s other assets, including property, infrastructure and fixed income

12 HOW WE INVEST... Despite political uncertainty in the final quarter, 2017/18 was a year when global political risks failed to materialise, creating a positive economic environment for investors like NILGOSC. Closer to home, continued uncertainty surrounding Brexit has had an impact on the shorter-term performance of our UK holdings, including the valuations of some UK companies and certain properties. On the flip side, Brexit has also resulted in a weaker Sterling which has been a positive contributing factor when it comes to returns from overseas investments. It is often quoted, but past performance really is no guarantee of future returns in financial markets and our focus remains firmly on the future and achieving solid longer-term investment returns within an acceptable level of risk. With this in mind, NILGOSC undertook a formal Investment Strategy Review in October 2017, which resulted in a change to both its strategic asset allocation and overall investment target. NILGOSC s funding position has been improving steadily over the last number of years, thanks in part to the strong returns from global markets and a decision was taken to bank some of the gains and reduce some of the risk associated with any future falls in financial markets. Given our historically high allocation to equities, the new strategy will see the proportion invested in stocks fall from two-thirds to just over a third, with a corresponding increase in fixed income assets which are considered to be less risky assets. We also took the opportunity to review our investment target, which from 1 April 2018 will be CPI+3.5%. The new investment strategy will take approximately 18 months to implement and a transition plan has been put in to allow funds to be moved across asset classes in a timely and controlled manner. The first stage of this transition was successfully completed in March 2018, with 828 million transferred from active UK equity mandates to passive index linked gilts. The next part of the process will involve the appointment of a number of new investment managers and we commenced our search for four specialised fixed income managers in April Collaboration is one of NILGOSC s six strategic themes and during 2017/18 we continued to work together with other UK LGPS Funds on infrastructure investments to help achieve the mutual benefits of scale investing, which include better commercial terms and reduced costs. NILGOSC had five infrastructure co-investments as at 31 March The diagram below shows the different asset classes in which the pension fund was invested at 31 March 2018: ASSET CLASSES Overseas Equities UK Equities Fixed Income (Bonds) Property Other Infrastructure 15.4% 10.5% 17.8% 4.0% 1.9% 50.4% 22 23

13 RESPONSIBLE INVESTMENT NILGOSC continues to take its responsibilities as a global investor seriously and strongly believes that environmental, social and corporate governance (ESG) issues can and do affect the long-term performance of investments. It is therefore our policy that these factors should be taken into account when managing our investments, subject to the overriding fiduciary duty to maximise the financial return for pension scheme members and beneficiaries. As a means of demonstrating our commitment to responsible investment practices, we have adopted the United Nations Principles of Responsible Investment and we vote at all company meetings in which we hold shares. During the year we voted at 582 investee company meetings with the main areas of dissent being unacceptable levels of executive pay and board composition. NILGOSC also engages with the companies in which it invests: by writing directly to UK and European companies; in collaboration with like-minded investors and indirectly via its Fund Managers. Detailed information on how we invest the Fund, including our responsible investment practices, is available in the Pension Fund section of our website at: DATA SHARING AND ACCESSIBILITY DATA PROTECTION NILGOSC is a Data Controller under the EU General Data Protection Regulations and UK data protection law. This means we store, hold and manage your personal data in line with statutory requirements to enable us to provide you with pension administration services. To enable us to carry out our statutory duties, we are required to share your information with certain bodies but will only do so in limited and specified circumstances. If you do not have access to the internet, or if you would like a hard copy of this Privacy Notice, please contact us using the details on the back cover. Requests in relation to accessing your personal data or exercising any other rights under data protection legislation should be made in writing or via to the Data Protection Officer at NILGOSC at governance@nilgosc.org.uk. For more information about how we hold your data, who we share it with and what rights you have to request information from NILGOSC, please refer to the Privacy Notice for Members and Scheme Beneficiaries, available on our website at:

14 NATIONAL FRAUD INITIATIVE In order to prevent and detect fraud, we may share information with other bodies responsible for auditing or administering public funds. We participate in the National Fraud Initiative (NFI) run by the Northern Ireland Audit Office, which has statutory powers to conduct data matching exercises. As part of this initiative, we provide details of pensioners and deferred members so that the information can be compared to that held by other public bodies. This will ensure, for example, that a pension is not being paid to someone who has died or is no longer entitled. For further information about our participation in the National Fraud Initiative, please refer to the NFI Privacy Notice available on our website at If you do not have access to the internet, or if you would like a hard copy of this Privacy Notice, please contact us using the details on the back cover. ACCESSIBILITY FOR OUR MEMBERS We are always happy to provide documents and Scheme communications in an alternative format (such as audio or large print) or an alternative language for those whose first language is not English. Our website can also be translated into over 100 different languages using the Google Translate button at the top of each page. For more information and an alternative communications form, please refer to the Alternative Methods of Communication booklet which can be downloaded from our website at or obtained from NILGOSC. If you have any further queries about our participation in the National Fraud Initiative, please contact our Governance Manager at governance@nilgosc.org.uk. If you would like to raise an equality issue with NILGOSC, please contact the Equality Officer on or equality@nilgosc.org.uk

15 CONTACT DETAILS NILGOSC Templeton House 411 Holywood Road Belfast BT4 2LP Typetalk (for minicom users): You are welcome to visit us from Monday to Friday, between 9am and 5pm. You do not need to make an appointment. However, we close on public and statutory holidays, so please phone first, to check that the office is open.