Human Resources Hewlett Packard Enterprise Investment Scheme - Member Booklet (June 2016)

Transcription

1 Introduction This booklet is for current active members of the Hewlett Packard Enterprise Investment Scheme (the Scheme), previously called Hewlett-Packard Investment Scheme. The Scheme is a defined contribution (DC) pension arrangement provided through the Hewlett Packard Enterprise s (the Company) Flexible Benefits Programme (mychoice). This booklet explains how the Scheme works and the benefits you receive as a member. Page 1 of 28

2 Contents Joining the Scheme...3 Contributions...5 Investments...7 Leaving...8 Retirement...11 Death benefits...13 Divorce or dissolution of Civil Partnership...14 State benefits...15 General information...17 Useful contacts...19 Definitions...22 Appendix Appendix Page 2 of 28

3 Joining the Scheme Automatic enrolment, eligibility and joining the Scheme To help people save for retirement, the Government requires employers to automatically enrol eligible employees into a workplace pension scheme which meets minimum standards. The Scheme is a qualifying pension plan for the purposes of the new auto-enrolment legislation. An employee is eligible to join the Scheme if the employee s contract of service says that he or she is eligible to join the Scheme. All eligible employees will have the opportunity to join the Scheme when selecting their flexible benefits on mychoice for the first time. If they do not select a pension contribution rate they will automatically be enrolled into the Scheme within 3 months of joining the Company as long as they are between the ages of 22 and State Pension Age, and earn the minimum qualifying earnings. If a member does not want to join there is a process in place to allow members to opt out of the Scheme once enrolled. If you join at the first opportunity you should: Confirm the reduction in salary you will be taking in order that the Company may make the relevant contribution on your behalf (see page 5). Complete the Investment/Retirement Age form (see page 7). Complete the Nomination of Beneficiaries form to indicate to whom you would like benefits to be paid to if you die (see page 14). Forms may be downloaded from the Scheme website: or from the new hire information page on the Company Portal. Please note that the Company is legally required to automatically enrol you into the Scheme if you do not join the Scheme at the first available opportunity and satisfy the age and minimum earnings criteria. Unless you choose otherwise you will be enrolled into the Scheme s investment lifestyle strategy and your salary will be reduced by 6%. Additionally, the Scheme has a notional Target Retirement Age of 65. Opting out of the Scheme You may opt out of the Scheme at any time after being automatically enrolled via the mychoice system. If you opt out within the first month of joining you will be treated as if you had never joined and any contributions deducted from you will be returned. If you opt out at any other time you will be treated as an early leaver (see page 8). Regardless of when you opt out you will still be covered for lump sum death in service benefits until you reach age 75, provided you remain employed by the Company (see page 13). Page 3 of 28

4 If you subsequently wish to rejoin the Scheme you may do so via the mychoice system, but you will be treated as a new member and your contribution rates will be subject to the Scheme terms for new joiners at that time. If you opt out the Company will automatically re-enrol you at a future date to comply with the auto-enrolment regulations. Transfers in If you have benefits in another registered pension scheme such as a previous employer's pension arrangement or a personal pension scheme, you may wish to consider transferring the cash value into the Scheme. This can only be done with the consent of the Trustee and the Company. If you wish to consider this option, please contact the Scheme Administrator or complete the form available on the Scheme website Before you request this we recommend you seek independent financial advice see page 19 for more information. Page 4 of 28

5 Contributions You do not pay contributions into the Scheme. Instead, your salary is reduced by the level of contribution you wish to make and the Company pays an equivalent amount into your Retirement Account on your behalf. This is known as salary sacrifice, and is explained on page 6. You have the opportunity to select a basic reduction of any amount between 3% and 6% of your Annual Salary (whole percentages only). The default option within mychoice is 6%. You need to alter this percentage if you wish to join the Scheme at a different contribution rate or opt out using the process outlined on the auto-enrolment confirmation sent via mychoice, if you do not wish to join the Scheme. If you do not join the Scheme you will still be covered for the lump sum death in service benefits (see page 13) provided you remain employed by the Company. Your Annual Salary is set out in the Definitions section of this booklet (see page 22). Contributions will be deducted at the first opportunity after your mychoice options have been selected and processed. This may be up to 10 weeks from the date you join, depending on the process cycle. If you choose a level between 3% and 6% (whole percentages only), the Company will reduce your salary by this amount, and in return will make a payment into the Scheme reflecting that reduction plus a matching contribution. This contribution will be paid by the Company as shown below. Your salary will reduce by a percentage of Annual Salary (and an equivalent amount will be paid to the Scheme) Matching Company contribution 0% 0% 0% 3% 3% 6% 4% 4% 8% 5% 5% 10% 6% 6% 12% Total contribution paid to the Scheme You can increase or decrease the level of contributions during the mychoice enrolment period and any changes will be effective from the following January. Thereafter changes can also be made in the event of a lifestyle change or at subsequent mychoice enrolment periods. Members can contribute more than 6% if they wish but the Company s maximum contribution is capped at 6%. For example, members can choose to contribute 10% but the Company s matching contribution is capped at 6%. Note: If prior to joining this Scheme you were a member of the Hewlett-Packard Pension Scheme (and you joined that scheme before 1 st January 2009), then the contribution rates applicable to you under this Scheme will be those set out in Appendix 1 to this booklet. Page 5 of 28

6 There are also certain categories of member where different employer contribution rates apply. These special terms agreed by the Company and the Trustee are detailed in the Scheme Rules and the special terms have been separately notified to affected members. You may contribute to the Scheme outside of mychoice i.e. through payroll rather than salary sacrifice. If you wish to do so please contact the Company s Pensions Department via uk.pensions@hpe.com Additional Voluntary Contributions (AVCs) Should you wish to pay in excess of 6% then you may do so via the AVC facility. Such contributions will not be matched by the Company. You may also pay AVCs outside of mychoice to the Scheme i.e. through payroll. These will be over and above the contribution level you select through mychoice. This might be appropriate, for example, for any one-off contributions that you would like to make during the year when mychoice is closed to any contribution amendments. To do so please complete the relevant form available on the Scheme s web site: AVCs are deducted from your salary via salary sacrifice (unless the Company has informed you otherwise) and will, as a default, be invested in the Scheme in the same way that you elect to have the employer contribution invested. You will receive income tax relief at source at your highest rate on any AVCs that you pay. Please note that members who joined the Scheme prior to 1 October 2015 and leave the Company with less than two years qualifying service could lose any contributions paid through mychoice. Please refer to the leaver benefits section for more details. Salary sacrifice mychoice operates on a salary sacrifice basis. Salary sacrifice is the process by which you agree to have your salary reduced in order to receive your chosen and agreed selection of benefits (including pension contributions). In other words, it is the method by which you and the Company agree your pay and benefits package for the year. In respect of your membership of the Scheme, this means that your salary is reduced by the level of contribution you wish to make. The Company then pays this amount, together with its employer contribution, into your Retirement Account. If you pay contributions in this way, the Company saves money on employer National Insurance contributions (NICs) and you save money on employee NICs. Please note that the effect of using salary sacrifice for paying your pension contributions is that employee contributions are deemed to be employer contributions from a legal perspective, and this will have certain implications on your benefits if you leave the Scheme with less than two years pensionable service. Please refer to the leaver benefits section (see page 8) for more details. Page 6 of 28

7 Investments Investment options Along with the amount invested, investment performance is key to the value of your Retirement Account when you come to retire. The Trustees have chosen a range of funds for you to choose from and it is important that you consider the options carefully and choose the options most suited to your needs. To decide which of the investment options suits you best, there is a lot to consider including: How involved you want to be with your investment choices When you want to retire Your attitude to risk and return You should select your investment choices by completing the form on the website Until you make a selection, contributions made by you or on your behalf will be invested in the Higher Growth & Risk Fund. Please note other default funds may have applied if you were a member of the Pension Scheme or the EDS Investment Plan prior to 1 January You may change your options (for future contributions and/or existing funds held) at any time of the year by completing a switching form on the Scheme website The Trustee may change the investment options available at any time. Please refer to the Investment Guide for full details. This may be found on the Scheme website - or new joiner information page on the Company Portal. Please note that this booklet and the Investment Guide do not consider your individual circumstances and therefore do not constitute individual investment advice. If you are not sure what action you should take or if you require advice, please seek independent financial advice see page 19 for more information. Page 7 of 28

8 Leaving Leaving the Scheme IMPORTANT INFORMATION Please note that due to changes in legislation, your benefits on leaving the Scheme may depend on when you joined the Scheme. Leaver benefits for members who joined the Scheme prior to 1 October 2015 If you leave the Scheme by opting out, or leaving the Company, your Retirement Account will continue to be invested until you take your retirement benefits, or transfer your account to an alternative pension arrangement. Your retirement benefits will be as described on page 11 and your death benefits will be as described on page 13. Please note that if you leave the Company or opt out and have less than two years qualifying service (and you have not transferred benefits from a personal pension scheme) you will lose the benefits you have built up in the Scheme (which includes benefits attributable to the deduction in salary you have made as part of mychoice) UNLESS you take action to transfer your benefits out of the Scheme within three months of leaving. To avoid losing your benefits in such circumstances you need to transfer them out to an alternative registered pension scheme (as the rules of the Scheme do not allow the Trustees to retain them). You need to make this transfer within 3 months of receiving your leaver option statement the statement will provide details of how to do this. Please note that if you miss this deadline your benefits will fall back into the Scheme s general assets and you will not be entitled to any further benefits from the Scheme. Note: Special rules apply to: (1) certain members who have transferred in benefits from another scheme; and (2) certain members whose employment switches to another Company entity which does not participate in the Scheme. Please note immediate vesting will apply to the members outlined in points 1 and 2 above where such members have been so notified. Note: Any contributions that you have made through payroll deduction (but not mychoice) may be refunded to you if you do not transfer out to another registered pension arrangement. Leaver benefits for members who joined the Scheme on or after 1 October 2015 If you leave the Scheme by opting out, or leaving the Company, your Retirement Account will continue to be invested until you take retirement benefits, or transfer your account to an alternative pension arrangement. Your retirement benefits will be as described on page 11 and your death benefits will be as described on page 13. Page 8 of 28

9 Please note that if you leave the Company or opt out and have less than 30 days qualifying service you will be treated as if you never joined the Scheme and you will be receive a refund of the contributions that were deducted from your salary for the purposes of the Scheme. Contributions from the Company will be lost. Transferring out It is possible to transfer the value of your Retirement Account to another registered pension scheme or arrangement or an insurance company, for example, to a scheme sponsored by your new employer or to a personal pension scheme. A transfer will only be possible if the other scheme agrees to accept it. If such a transfer is made, the full value of your Retirement Account must be transferred, membership of the Scheme will terminate and you will cease to be entitled to any further benefits under the Scheme. If you wish to do this, you should write to the Trustee or the administrator of your new pension arrangement. Partial transfers transferring out whilst still employed and remaining a member of the Scheme Members of occupational pension schemes are allowed to have concurrent membership of stakeholder and / or personal pension schemes (including Self Invested Personal Pensions). If you have, for example, additional stakeholder and / or personal pensions (including Self Invested Personal Pensions), and if the Trustee and Company agree, you can transfer part of or all of your Retirement Account to such an arrangement without your Scheme membership terminating. This is known as a partial transfer. Partial transfers may be made to another pension scheme or arrangement or to an insurance company. A request for a partial transfer will be subject to any conditions the Trustee decides. The current rules are as follows: Active members - If you are still employed by the Company and making contributions into the Scheme at the time you transfer out you will continue to build further benefits for as long as you remain employed by the Company but your account will be reduced by the amount you have transferred out. Deferred members - If you are not making contributions into the Scheme (either because you have left the Company or you have opted out of the Scheme), and you wish to transfer part of your retirement account out, you must transfer a minimum of 10,000 and have 10,000 left in your retirement account once the transfer has taken place (as your account will be reduced by the amount you have transferred out). Please note that as a deferred member you have the right to transfer out your retirement account in full to another registered pension scheme at any time, in accordance with legislation. Page 9 of 28

10 Both actives and deferred members will only be able to make a transfer of this kind once a year. If you would like to find out more about transferring funds from the Scheme to another registered pension arrangement, please contact the Scheme Administrator, Capita (see page 19 for contact details). Before you decide whether to transfer your funds, the Trustees would recommend that you seek independent financial advice see page 19 for more information. Leave of absence If you are on maternity, paternity or adoption leave from the Company, contributions will be deducted in line with the Rules of the Scheme and Company policy. Your deductions (through mychoice) will be based on your actual earnings. If you cease to be paid you will, unless the Company decides otherwise, be treated as having left the Scheme. If you are away from work for any other reason you can remain in the Scheme for as long as you receive pay from the Company but on such terms as are determined by the Company. No contributions will be deducted or paid during any period of unpaid leave. Page 10 of 28

11 Retirement Retirement benefits The value of your Retirement Account will be used to provide your retirement benefits. From age 55 (or 50 if you have a protected pension age), you now have the following options to take your Retirement Account. Remember, you don t have to choose just one option, you can use a combination to access your pension savings. Retirement Income Options 1, 2 and 3 are available from the Scheme. To access your savings under Option 4 income drawdown, you have to transfer your Retirement Account to an individual pension arrangement such as a Self Invested Personal Pension. Please refer to the Scheme s At Retirement Guide for further information at Remember: If you re taking all of your retirement account as a cash lump sum, make sure you get advice as the amount of tax you pay could be substantial. Page 11 of 28

12 You will still be able to buy an annuity when you approach retirement. Should you choose to purchase an annuity, you will be given the opportunity to tell the administrators the type of annuity you wish to receive shortly before you retire. For example you may choose to purchase an annuity which provides your Spouse or Civil Partner or Dependants with a pension in the event of your death, and/or you may choose to purchase an annuity that increases in payment. The level of your initial pension will be dependent on these choices and other factors such as your age at date of retirement and prevailing market conditions. Please refer to the Scheme s At-Retirement Guide for further information on the retirement income options, available at Retirement date You can choose to retire from age 55 (earlier if you suffer from incapacity or from age 50 if you have a protected retirement age). If you do not choose a retirement date the default will be age 65. However: If you wish to take your pension before age 65 (and are retiring from active service), you will need the consent of the Company. If you leave the Company on or after 65 you can defer taking your benefits to a later date. In such circumstances you will be treated as an early leaver for the purposes of the Scheme. Flexible retirement If the Trustees and Company consent, you can choose to use all or part of your Retirement Account to provide you with a pension at any time from age 55 (age 50 if you have a protected pension age). If you choose this option you will be treated as continuing in employment in relation to the remaining amount in your Retirement Account and contributions will continue to be payable as before. You will also remain covered for the lump sum benefits and spouse/dependant/children pension (if applicable) payable on death in service, as long as you are under age 75 and actually remain employed by the Company. Members can choose to stop paying contributions and will therefore be treated as an early leaver in respect of their status in the Scheme. Page 12 of 28

13 Death benefits Benefits on death before age 75 whilst in employment and before retirement If you die in employment before age 75 before retiring the Trustee will provide a lump sum equal to four times your Annual Salary at the date of your death or such higher or lower multiple as you have selected through mychoice. In addition an amount equal to the Excluded Excess Value (if any) will be used to provide additional benefits in the form of a lump sum or a pension payable to your Spouse or Civil Partner, Pensionable Children or Dependants. If you were a member of the Hewlett-Packard Limited Pension Scheme or EDS Investment Plan as at 31 st December 2009, then the death benefits payable will be those appropriate to your membership of the respective arrangements at that time. These may include Spouse s or Civil Partner s and Pensionable Children s pensions where applicable (see Appendix 2). If you opt out of the Scheme but remain in employment with the Company, you will continue to be entitled to the death in service benefits relevant to your membership under the Scheme. You will remain entitled to those benefits until you reach age 75 for as long as you remain in continuous employment with the Company. Benefits on death after age 75 whilst in employment and before retirement The Trustees will use your Retirement Account to provide benefits either as a lump sum, or a pension or pensions payable to one or more of your dependants including Spouse or Civil Partner, Pensionable Children or Dependants. They will act in accordance with your directions, or as they feel appropriate where no direction has been given. No death in service multiple of salary lump sum benefit will be payable. Benefits on death after leaving the Company but before retirement The Trustees will use your Retirement Account to provide benefits either as a lump sum, or a pension or pensions payable to one or more of your dependants including Spouse or Civil Partner, Pensionable Children or Dependants. They will act in accordance with your directions, or as they feel appropriate where no direction has been given. Benefits on death after retirement The benefits payable on your death after retirement will depend upon the choices you made when you retired, including: Whether you purchased an annuity (which may have included provisions for a Spouse s or Civil Partner s or Dependant s pension). Funds remaining from your income drawdown programme. Page 13 of 28

14 Nomination of Beneficiaries form The Trustee will use its discretion to decide to whom lump sum death benefits are paid. It will take into account your wishes, which is why it is imperative that you complete a Nomination of Beneficiaries form, but ultimately they are not bound by this form. Payment is made in this way to avoid any liability for inheritance tax on benefits. It should also be possible for the money to be paid to the beneficiaries without having to wait for probate on your estate. Nomination of Beneficiaries forms may be found on the scheme website or new joiner information page on the Company portal. Note: There are also certain categories of member where different death benefits apply. These special terms agreed by the Company and the Trustee are detailed in the Scheme Rules and the special terms have been separately notified to affected members. Divorce or dissolution of civil partnership In the event of your divorce or dissolution of your Civil Partnership, the Trustees reserve the right to transfer all or part of your benefit entitlement under the Scheme to your ex-spouse or ex-civil Partner, in order to comply with any court order which requires this. Page 14 of 28

15 State benefits State Pension If you reach your State Pension Age before 6 April 2016, there are two parts to the State Pension provision: Basic State Pension (BSP) This is a flat rate pension payable to everyone who has a sufficient National Insurance Contributions record. Membership of the Scheme does not affect your entitlement to the Basic State Pension. Additional State Pension Before April 2002, the Additional State Pension was known as the State Earnings Related Pension Scheme (SERPS). From April 2002 it became the State Second Pension (S2P). New State Pension (NSP) If you reach your State Pension Age after 6 April 2016, the New State Pension (NSP) is the higher of: BSP plus SERPS as outlined above, and NSP less a deduction that is broadly the amount of SERPS and S2P forgone because the member was contracted out. The New State Pension is expected to be per week. However, please note that the amount of the New State Pension you receive will depend on your National Insurance record. What if I was contracted out of the Additional State Pension? If you were contracted out of the Additional State Pension, you will have paid lower National Insurance contributions and therefore are likely to receive less State Pension. You should contact HM Revenue and Customs if you are unsure about if you were contracted out or if you wish to check you National Insurance record at State Pensions are paid from State Pension Age. More information about State Pensions is available on the Department for Work and Pensions website at or from Page 15 of 28

16 You can also use the Pensions Service site to ask for a forecast of how much pension you will receive from the State when you retire. Page 16 of 28

17 General information The Scheme is a registered pension scheme and, as such, full tax relief may be given on member contributions, cash taken at retirement is tax-free (subject to certain limits) and the Scheme s investments receive favourable tax treatment. There are limitations on the amount of benefits you can build up on a tax favourable basis. These limits are known as the Lifetime Allowance and the Annual Allowance tax relief restrictions. Broadly, if you exceed these limits you will incur a tax charge. All benefits payable under the Scheme will be paid in accordance with the Scheme Rules and must be authorised for the purposes of the Finance Act Trustee Hewlett-Packard Investment Scheme Pension Company Limited is a corporate trustee company. It and its directors are responsible for the operation of the Scheme. The main duties of the Trustee are to ensure the Scheme is managed in accordance with its Rules and relevant legislation, arrange and monitor the administration of the Scheme and choose and monitor the investment options available to you. Neither the Trustee nor the Company are responsible for your investment choices. Nor are they able to give financial advice. Amendment or discontinuance The Company and Trustee reserve the right to amend or discontinue the Scheme in accordance with the Scheme rules, subject to any legislation in force at the time. The Data Protection Act 1998 The Data Protection Act 1998 provides strict guidelines on how data should be collected, processed, disclosed and stored. These Acts apply to the Scheme because personal data is held on each member, such as name, address and salary and therefore the Trustee is registered with the Data Protection Commissioner. Page 17 of 28

18 The personal data held about members will be used for the purposes of the administration and management of the Scheme and for paying benefits under it. For these purposes, the Trustee may pass on personal data about you to the Scheme Administrator, Company and advisers. You are entitled to see any data that is held on you unless, in providing this data, other parties data is disclosed. A charge may be made to cover the cost of supplying the data. Internal dispute resolution procedure (IDRP) If you have a complaint or dispute about any matter relating to the Scheme, there is a twostage set procedure for resolving it. Stage 1 The first stage is to set out your complaint (in the IDRP form) and send it to the Secretary to the Trustee, Willis Towers Watson. You will normally receive a formal response to your complaint from Willis Towers Watson within two months. If your complaint cannot be addressed within two months you will be sent a letter explaining the reason for the delay. This letter will also tell you when a formal response will be provided. Stage 2 If, on receipt of the decision, you are not satisfied with the decision reached, you can escalate the matter to the full Board of Trustees. Details of this option will be provided with the first stage response. If you are unable to make the complaint or appeal yourself, or if you prefer, you can nominate someone as your representative to make it for you. The internal dispute resolution procedure only applies to disputes with the Trustee. The procedure does not apply to disputes between members and the Company. The procedure does not apply to disputes where court proceedings have started or which are being investigated by the Pensions Ombudsman. Full details of the procedure and contact details can be obtained from the Scheme Administrator on Alternatively you may request this document from the Scheme Administrator by ing the team at hp@capita.co.uk Page 18 of 28

19 Useful contacts Where to get further information If you have any queries about the Scheme or about your entitlement to benefits, then Capita will be happy to help. Your first point of contact should be the website which has been developed by Capita, and includes an online copy of this booklet, the Scheme s Rules and annual reports. Capita can be contacted at the following address if you are unable to find the required information on the website: Hewlett Packard Enterprise Investment Scheme administration team: Hewlett Packard Enterprise Investment Scheme Administrator Capita Employee Benefits PO Box 4990 Sheffield S1 9GE Telephone: hp@capita.co.uk Fax: Pension Wise Pension Wise has been set up by the Government and offers a free impartial guidance service for everyone with a DC pension at the point of retirement. Guidance will be provided over the phone or online by The Pensions Advisory Service (TPAS), and by the Citizens Advice Bureau (CAB), who will provide face-to-face guidance. Guidance will be provided on the following: What you can do with your pension pot The different pension types and how they work What s tax-free and what s not. Find more information on Pension Wise including how to contact them can be found at: Page 19 of 28

20 The Pensions Advisory Service (TPAS) TPAS is an independent body that assists members and beneficiaries of occupational pension schemes with difficulties that they have failed to resolve with the Trustee or administrators of their scheme. TPAS can be contacted at: TPAS 11 Belgrave Road London SW1V 1RB. Telephone: Pensions Ombudsman The Pensions Ombudsman has the power to investigate and determine complaints or disputes of fact or law in relation to occupational pension schemes. The Pensions Ombudsman expects the administrators and the trustees of a scheme and TPAS to have been approached, and both stages of the internal disputes resolution procedure to have been completed before they will investigate any complaint. The Pensions Ombudsman can be contacted at: Pensions Ombudsman 11 Belgrave Road London SW1V 1RB. Telephone: Page 20 of 28

21 The Pensions Regulator The Pensions Regulator is the regulator of work-based pension schemes in the UK. The Pensions Regulator can intervene in the running of schemes where Trustees, employers or professional advisers have failed in their duties. The Pensions Regulator has wide powers, including the power to suspend, disqualify and remove trustees who consistently fail to carry out their duties. It can wind up pension schemes where necessary and apply for injunctions to prevent misuse and misappropriation of scheme assets. The Pensions Regulator can be contacted at: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW Telephone: Independent financial advice For a list of regulated financial advisers visit Page 21 of 28

22 Definitions Annual Salary The amount determined by Hewlett Packard Enterprise and notified to the Trustee and the member concerned as being the yearly rate of the member s annual salary excluding any director s fees, shift allowances, overtime and other fluctuating emoluments or, where applicable, in the case of a member who participates in a sales incentive plan, the member s annual earnings objective. Annual Salary for members who were formerly members of the EDS Investment Plan will generally be subject to an earnings cap. Those who are not subject to the cap have been notified separately. The earnings cap is currently 149,400 (2015/16 tax year) and will increase to 150,600 (2016/17 tax year). Note: Some members have slightly different definitions of Annual Salary those members have been notified separately. Annual Allowance The Annual Allowance is the maximum contribution that can be paid in a year (tax years for Scheme purposes) without an additional tax charge being payable. The Annual Allowance is currently 40,000 (which includes both employee and employer pension contributions) although the present tax year (2015/16) is unusual in that a higher amount may apply to you depending on your circumstances. The Annual Allowance will remain at 40,000 for 2016/17 tax year. The Annual Allowance is a total figure rather than a per scheme figure so if you contribute to another scheme such as a personal pension, or have benefits in a defined benefit scheme which increase in value, then they normally count towards your Annual Allowance. In calculating your limit for any year you may add any unused allowance from the previous three years, provided you were a member of a pension scheme in those years. a. Annual Allowance if you access your Retirement Account under the new DC flexibilities Since April 2015, your Annual Allowance may reduce to 10,000 a year (from 40,000) when you access your pension savings under the new flexibility. For example, when you start receiving an income from income drawdown or start taking your savings in a single or multiple cash lump sums. If your Annual Allowance does reduce to 10,000 a year, you will not be permitted to carry forward any unused allowance from the previous three years. The first time you take benefits flexibly from any scheme, that scheme will give you a statement which confirms the date on which this happened and what it means within 31 days. If you are an active member of other schemes at that time you will normally have to give them a copy of the statement within 13 weeks so that they know your Page 22 of 28

23 Annual Allowance has been reduced. You will be given more detail about this at the time. Please note that taking your tax free cash lump sum (i.e. Pension Commencement Lump Sum) and/or buying a lifetime annuity would not trigger the lower Annual Allowance. Please note that some providers might offer an annuity that reduces in payment. Taking this type of annuity will normally result in the reduced Annual Allowance. Annuity Company Dependant b. Lower Annual Allowance for higher earners From 6 April 2016, for members whose earnings (including employer pension contributions and other taxable income) exceed 150,000, the Annual Allowance (AA) will taper from 40,000 to 10,000. This means that for every 2 you earn over 150,000, your AA reduces by 1, thereby reducing to 10,000 for someone earning over 210,000. Pension contributions made in excess of the Annual Allowance will be taxed at your marginal rate i.e. up to 45% if you are an additional rate tax payer. The pension, payable for life, which is bought for you when you retire, using the value of your Retirement Account. Hewlett Packard Enterprise and any subsidiary or associated company whose employees are included in the Scheme. Means: (a) (b) anyone who was financially dependent on the member or other person concerned at the time of that person's death. This may include anyone who shares living expenses with, or receives financial support from, the member and whose standard of living would be affected by the loss of that person's financial contribution or financial support;or anyone dependent on the member or other person concerned because of disability at the time of that person s death. Excluded Excess Value The portion of your Retirement Account that represents any assets accepted by the Trustees in respect of transfers into the Scheme (except in relation to the bulk transfer from the HP Limited Pension Scheme and the EDS Investment Plan, unless agreed otherwise), and such other contributions as are notified to you from time to time. Page 23 of 28

24 Lifetime Allowance The maximum value of an individual s pension benefits from all sources (including the Scheme). If exceeded, additional tax will be payable. The Lifetime Allowance is 1.25million for the 2015/16 tax year. The Lifetime Allowance is reducing to 1million for the 2016/17 tax year. The value of pension benefits within the Scheme is the value of your Retirement Account. Members on special terms There are certain categories of member where different employer contribution rates and/or different benefits apply. These special terms agreed by the Company and the Trustee are detailed in the Scheme Rules and the special terms have been separately notified to affected members. Pensionable Children Means the children of the member, or stepchildren (if financially dependent on the member at the date of the member s death), children legally adopted by the member, and any other children whom the Trustee is satisfied were dependent on the member at the time of their death and whom the Trustee agrees to treat as Pensionable Children. Retirement Account Spouse The Trustees The account maintained by the Trustee in the Scheme for you. It includes the proceeds of all the contributions (including any transferred in amounts) which have been made by or on your behalf to the Scheme. Means a person who, at the date of the member s death, was legally married to the member (whether in a same sex or opposite sex marriage) or was the member s legal Civil Partner. The Trustee or Trustees for the time being of the Scheme. Page 24 of 28

25 Appendix 1 Employer contributions for those members who joined the Hewlett-Packard Limited Pension Scheme before 1 January 2009 For those members who joined the Hewlett-Packard Limited Pension Scheme before 1 January 2009 and who remained an active member until he or she joined the Scheme on 1 January 2010, the table on page 5 should be substituted with the following: Your salary will reduce by a percentage of Annual Salary (and an equivalent amount will be paid to the Scheme) Matching Company contribution 0% 0% 0% 1% 3% 4% 2% 4% 6% 3% 5% 8% 4% 6% 10% Total contribution paid to the Scheme There are also certain categories of member for which different employer contribution rates apply. These special terms agreed by the Company and the Trustee are detailed in the Scheme Rules. The special terms have been separately notified to affected members. Members can contribute more than 4% if they wish but the Company s maximum contribution is capped at 6%. For example, members can choose to contribute 10% but the Company s matching contribution is capped at 6%. Page 25 of 28

26 Appendix 2 Benefits on death in employment before age 75 For members who were active members of the Hewlett-Packard Limited Pension Scheme immediately before joining the Scheme on 1 January 2010 and who die whilst in employment before age 75 If a member dies whilst still in employment and whilst under age 75, the following death-inservice benefits will be paid: a lump sum equal to four times the member s Annual Salary as at the date of death or such higher or lower multiple as the member has selected through mychoice. In addition an amount equal to the Excluded Excess Value (if any), used to provide additional benefits in the form of a lump sum or a pension payable to your Spouse, Civil Partner, Pensionable Children or Dependants. a Spouse s or Civil Partner s pension payable amounting to 25% of the member s Annual Salary at the date of death or such higher or lower percentage as the member has selected through mychoice. If this pension is paid to a person who is younger than you, the pension may be reduced to reflect the age difference. The Trustee has the discretion to pay part of the Spouse s or Civil Partner s pension to a Dependant. a Pensionable Children s pension of one-third of the Spouse s or Civil Partner s pension for each Pensionable Child, up to a maximum of three, for so long as the child is under age 18 (or under age 23 if in full-time education or training approved by the Trustees). If the child was dependent on the member due to disability at the date of death the pension can be paid for life. If there are more than three Pensionable Children the pension will be divided equally between them. If the total of your Retirement Account (after deducting the Excluded Excess Value (if any), is greater than the amount needed to provide the benefits referred to above, any excess will be used to increase those benefits in a manner determined by the Trustee. If you opt out of the Scheme If you opt out of the Scheme but remain in employment with the Company, you will continue to be entitled to the death benefits relevant to your membership under the Scheme. You will remain entitled to those benefits for as long as you remain under age 75 and in employment with the Company. Any death benefits will be based on your Annual Salary at date of death, rather than date of opting out. Page 26 of 28

27 For members who were active members of the Electronic Data Systems Investment Plan immediately before joining the Scheme on 1 January 2010 and who die whilst in employment before age 75 If a member dies whilst in employment and whilst under age 75, the following death-in-service benefits will be paid: A lump sum equal to four times the member s Annual Salary as at the date of death or such higher or lower multiple as the member has selected through mychoice. In addition an amount equal to the value of the member s Retirement Account will be payable where no Spouse s or Civil Partner s, Dependant s or Pensionable Children s pensions are payable. In addition, an amount equal to the Excluded Excess Value (if any), used to provide additional benefits in the form of as a lump sum or a pension payable to your Spouse or Civil Partner, Pensionable Children or Dependants. For Members who were active members of the EDS Investment Plan on 31 March 2006 and who remained an active member until they joined the Scheme in 1 January 2010 and who die whilst in employment: A Spouse s or Civil Partner s pension payable amounting to 30% of the member s Annual Salary at the date of death. The Trustee has the discretion to pay part of the Spouse s or Civil Partner s pension to a Dependant. For Members who were active members of the EDS Investment Plan on 31 March 2006 and who remained an active member until they joined the Scheme in 1 January 2010 and who die whilst in employment: A Pensionable Children s pension of 10% of the member s Annual Salary for each Pensionable Child, up to a maximum of three, for so long as the child is under age 18 (or under age 23 if in full-time education or training approved by the Trustees). If the child was dependent on the member due to disability at the date of death the pension can be paid for life. If there are more than three Pensionable Children the pension will be divided equally between them. The children s pension will be doubled if no Spouse s, Civil Partner s or Dependant s pension is payable. If the total of your Retirement Account (after deducting the Excluded Excess Value (if any), is greater than the amount needed to provide the benefits referred to above, any excess will be used to increase those benefits in a manner determined by the Trustee. If you opt out of the Scheme If you opt out of the Scheme but remain in employment with the Company, you will continue to be entitled to the death benefits relevant to your membership under the Scheme. You will Page 27 of 28

28 remain entitled to those benefits for as long as you are under age 75 and remain in employment with the Company. Any death benefits will be based on your Annual Salary at date of death, rather than date of opting out. This booklet is intended to give employees an outline of the terms of the Scheme as set out in the Rules. In the event that there are any ambiguities between the booklet and Scheme Rules, the Rules will prevail. Please note that the booklet does not detail any special terms agreed by the Company and the Trustee for groups of employees whose benefits are different to the standard Scheme terms set out in this booklet. Benefits on death after age 75 whilst in employment and before retirement The Trustees will use your Retirement Account to provide benefits either as a lump sum, or a pension or pensions payable to one or more of your dependants including Spouse or Civil Partner, Pensionable Children or Dependants. They will act in accordance with your directions, or as they feel appropriate where no direction has been given. No death in service multiple of salary lump sum, spouse s or children s pension benefit will be payable. Page 28 of 28