The Bidvest (UK) Retirement Plan Member Guide

Transcription

1 The Bidvest (UK) Retirement Plan Member Guide JULY 2016

2 Contents Introduction 3 How does the Plan work? 4 How do I join the Plan? 4 What if I don t want to be in the Plan? 5 How much is paid to my Retirement Account? 6 Can I pay extra contributions? 6 Do I receive tax relief of my contributions? 6 Flex Pension 6 How do I choose where to invest my contributions? 8 How do I manage my Retirement Account? 8 Can I transfer benefits into the Plan? 8 What happens if I am on maternity or adoption leave? 8 What happens if I am on sick leave? 9 What happens if I die whilst employed by the Company? 10 Can I purchase additional life insurance? 10 When can I retire? 11 What are my options when I retire? 12 What happens if I die after retirement? 13 State Pension arrangements 13 What happens if leave the Company or decide to stop paying contributions in to the Plan? 14 What happens to my death in service benefits? 15 What happens to my benefits should I die before my payment commences? 15 HM Revenue & Customs 17 Definitions 18 Contacts 20 Data Protection 22 2

3 Introducing the plan Introduction The aim of this member guide is to describe the main benefits and conditions of membership of The Bidvest (UK) Retirement Plan (the Plan ). The Plan has been provided by the Company to help you save for your retirement and provides valuable benefits including various options when you retire, and financial protection for your family or dependants should you die in service. The Plan is a Defined Contribution pension scheme, commonly known as a money purchase scheme and is registered under part 4 of the Finance Act The Plan is set up under a Trust Deed and Rules. The Trustees are responsible for ensuring the Plan is run in accordance with the Trust Deed and Rules. Copies of the Trust Deed and Rules are available on request. This member guide is a summary of your benefits and does not itself give any rights to the benefits under the Plan. In the event of any conflict between this guide and the Trust Deed and Rules, the Trust Deed and Rules will override this guide. The Trustees have appointed Zurich Assurance Ltd ( Zurich ) to assist with administrative services as well as access to a range of investment funds. You will find a glossary on page 18 of the most frequently used terms in the guide together with a note of their meaning. 3

4 How does the Plan work? When you join the Plan, a Retirement Account will be opened in your name. All contributions made by you and the Company are paid in to your Retirement Account. The contributions are invested in funds that aim to grow over time (investment returns) that can then be used to provide your retirement benefits. Your options at retirement are explained on page 12. The amount you receive at retirement will depend on a number of factors including: the value of your Retirement Account. The value of your Retirement Account will depend on the amount paid in, the investment returns and the charges applied to the funds that you are invested in. The value of your Retirement Account is not guaranteed and will go up or down; how you choose to take your benefits at retirement; your age when you elect to take your benefits. The younger you are when you retire the less you are likely to receive. You can take part of your Retirement Account as a tax-free cash lump sum at retirement (usually up to a maximum of 25% of the value of your Retirement Account see page 12 for more details). How do I join the Plan? If you are over age 22 and under State Pension Age (and you earn over a minimum amount that is set by the government please refer to the auto enrolment guide in the Document Library at you will automatically join the Plan after completing between two and three months service. You will be notified in writing of the precise date. However, you can elect to join the Plan from the date you joined the Company by completing the Opt-in form (available at and returning it to the payroll department. If you do not meet the criteria to be automatically enrolled in the Plan you can still elect to join by completing the Opt-in form and returning it to your payroll department. Please refer to the auto enrolment guide in the document library at 4

5 What if I don t want to be in the Plan? You can decide to opt- out of the Plan at any time. If you opt- out within approximately one month of joining you will be treated as though you were never in the Plan and your contributions will be returned to you in full. Please refer to the auto enrolment guide in the document library at for further information. If you want to stop paying contributions after you have been in the Plan for longer than one month you will need to give one month s notice in writing by completing a Cessation of Contributions form and returning it to the payroll department. The Cessation of Contributions form is available in the document library at To see what happens to your contributions please refer to page 14 What happens if leave the Company or decide to stop paying contributions in to the Plan? If you have been auto enrolled please note that if you decide to opt-out of the Plan the Company, by law, must re-enrol you into the Plan approximately every two to three years, providing you continue to meet the eligibility criteria. You will still be able to opt-out each time. 5

6 Contributions How much is paid to my Retirement Account? You can choose to pay 1%, 3.5%, 5% or 6% of your Pensionable Salary. The Company will match your contribution which means the amount paid in to your Retirement Account is doubled as shown in the table below. You will be automatically enrolled at 1% unless you state otherwise. You can change your contribution on 1 April each year. Employee Company Total 1% 1% 2% 3.5% 3.5% 7% 5% 5% 10% 6% 6% (maximum) 12% The 1% and 3.5% levels of contribution may not be available in the future as the Government has introduced a minimum level of contribution that has to be paid into a pension scheme from April You will be notified nearer the time of any change. Can I pay extra contributions? If you wish to contribute more than 6%, you can do so by paying Additional Voluntary Contributions (AVCs). Although AVCs will be invested into the Plan in the same way as your standard contributions, the Company will not match them. You can start paying AVCs at any time provided you are an active member of the Plan. Please refer to the HM Revenue & Customs section of this guide regarding the maximum contributions that you can pay. Do I receive tax relief on my contributions? Generally yes, but please refer to the HM Revenue & Customs section of this guide (page 17). Flex Pension Flex Pension is an easy way to make contributions to the Plan. It can help to make the cost of saving for retirement a little more affordable for you. It does this by the Company paying your selected pension contribution on your behalf and then reducing your contractual salary by the same amount. The effect of this is that the total amount paid into your Retirement Account is unchanged but the advantage of making pension contributions this way is that they are not subject to National Insurance deductions, which they otherwise would be. As a result, your take-home pay will be slightly higher than it otherwise would be. You will be automatically included in Flex Pension immediately upon joining the Plan. You can opt-out of Flex Pension by completing a Flex Pension Opt-out form which is available in the document library at 6

7 If your earnings are below a certain level, called the Pay Protection Threshold (PPT), you may lose any entitlement to certain State benefits. For this reason you will be excluded from Flex Pension. You cannot be in Flex Pension if your earnings fall below the National Minimum Wage / National Living Wage. In addition, if you re over State Pension Age or have been working overseas for more than 12 months, you will also be excluded from Flex Pension, as you will not benefit from a National Insurance saving. If you fall into any of the above categories, your contributions will be deducted from your earnings before tax. If you have opted into the Plan yourself (ie not through automatic enrolment) and commence payment of contributions by Flex Pension immediately, you will not be entitled to the refund of contributions payable if you leave within 30 days of joining the Plan. Please refer to the Flex Pension leaflet for further information. 7

8 My Retirement Account How do I choose where to invest my contributions? Having decided how much you wish to contribute to your Retirement Account, your next key decision is where to invest. You will need to consider such things as how experienced you are at making investment decisions, your appetite for risk and when you want to retire. You can choose a hands-off approach or take a more active role investing your contributions; one of the Lifestyle strategies (hands off) or a range of self-select funds (hands on). New joiners to the Plan will automatically be invested in the Lump Sum Lifestyle strategy unless you choose otherwise (see the separate Investment Choices guide for more information). You have the option to change your fund selection online at any time (see How do I manage my Retirement Account? below). Please note you cannot invest in one of the Lifestyle Strategies and the self-select funds at the same time. You cannot invest in more than one Lifestyle strategy at any one time. Please read the Investment Choices guide which provides further information on the options you have and on the funds available. It also gives useful guidance to help you consider the issues described above. How do I manage my Retirement Account? When you become a member, Zurich will send a secure password to your home address. You will also receive, separately, a user number. When you have these you can go online at any time and view the details of your Retirement Account and your investment choices. You will also receive a yearly benefit statement detailing the value of your Retirement Account. Can I transfer benefits into the Plan? Yes, it may be possible for you to transfer the value of any previous pension arrangements you have into the Plan subject to the Trustees agreement. However, before doing so you should consider taking independent financial advice. The transfer value would normally be invested in the same way as your normal contributions unless you elect to invest them differently. What happens if I am on maternity, paternity or adoption leave? Whilst you are on paid periods of maternity, paternity or adoption leave, the Company contributions will be based on your full Pensionable Salary immediately prior to going on maternity, paternity or adoption leave. Employee contributions will be based on actual pay received. 8

9 What happens if I am on sick leave? If you are absent due to sickness or accident and are still employed, you will stay in the Plan as long as and on such terms as agreed by the Company and the Trustees. If your earnings fall below the Pay Protection Threshold or the National Minimum Wage / National Living Wage, you will automatically be excluded from Flex Pension although you will remain a member of the Plan. 9

10 Death benefits What happens if I die whilst employed by the Company? The Company will provide all employees with a core level of lump sum death benefit although if you have previously been declined or restricted for cover through the Plan you may not be entitled to cover. The following table summarises the death-in-service benefit structure: e ee e e e e e e e e e e e In addition, the value of your Retirement Account will also be payable. Some members who joined the Plan prior to 1 May 2013 may have chosen to retain an entitlement to a dependant s pension at their own cost. Can I purchase additional life assurance? Yes, if contributions are being made to the Plan, you can choose to purchase up to an additional 12 times your Pensionable Salary. This option is not available for life-only members. The cost will be paid by you, deducted from your net salary. Please refer to the Death-in-Service Benefits and Flex Life leaflet for further information. 10

11 Retirement When can I take my benefits? Your Normal Retirement Age (NRA) under the Plan is your 65th birthday. However, you can select your own retirement age and you will be able to take your benefits from the Plan at any point after reaching the minimum age set out in legislation, currently age 55. If in the opinion of the Trustees you are seriously ill or unable to work due to health reasons then you may be able to apply to take your benefits earlier than age 55. You should note that the earlier you take your benefits, the smaller the benefits are likely to be as less contributions will have been paid into your Retirement Account. You can carry on working after your NRA. You will need to decide if you want to draw your benefits or continue to pay into your Retirement Account until you reach your new retirement age. You can defer taking your benefits until any age up to age 75. Your Retirement Account will remain invested until you elect to take your benefits. The Trustees may automatically secure benefits for you at age 75 by purchasing an annuity if you have not taken your retirement benefits by this time. 11

12 What are my options when I retire? When you retire, your Retirement Account can be used in the following ways: Take it all as cash You can withdraw all of your Plan Retirement Account as a one-off cash lump sum. You can normally take 25% of your cash lump sum tax-free, and the remaining 75% will be subject to tax. Please see below regarding Protected Tax-Free Cash. Income for Life - Annuity option You can use your Retirement Account to buy a regular income from an insurance company of your choice. This is called an annuity and it pays a pension for the rest of your life. You can normally take 25% of your Plan savings as a tax-free cash lump sum before using the rest to buy your annuity. Please see below regarding Protected Tax-Free Cash. Flexible Income option You can access your retirement saving to provide the flexibility to you to choose the amount and timing of income withdrawals. This option is only available if you transfer all your Plan savings to an external pension provider which offers this facility at the time you plan to take your benefits. You can normally take 25% of your Plan savings as a tax-free cash lump sum. If you choose to transfer you will lose any entitlement to Protected Tax- Free Cash (see below). If you choose the annuity option, you do not have to buy an annuity from the pension provider (Zurich). At retirement, you can shop around to compare rates and arrangements offered by other insurance companies and buy an annuity from another provider if you find a better deal this is known as the Open Market Option Your benefits and tax Once you have taken the tax-free portion of your Plan savings, the balance will be taxed like other earnings as you draw them (in all three options). The rate of income tax that applies will depend on the amount of your other earnings in the tax year. Depending on your financial circumstances, taking your benefits (and in particular a taxable cash lump sum) could move your earnings into a higher income tax bracket. This may mean that some of your benefits will be subject to a higher rate of income tax than applies to your other earnings at that time. If you choose the All-cash or Flexible income options, this could trigger the reduced Money Purchase Annual Allowance (MPAA) (see page 17 for more details). Protected Tax-Free Cash Sum applies to certain members who were active members prior to 6 April Changes were made to the taxation of pensions on 6 April 2006 limiting the amount of tax free cash available to 25% of a members fund value. Important transitional arrangements were put in place by the Government to protect members where they had an entitlement to a higher tax free cash sum than 25%. It is important to note that this protection will be lost if you choose to transfer your Retirement Account to another scheme or to an external pension provider (e.g. a personal pension). 12

13 Where can I get help? It is important that you consider your retirement options carefully. The Government offers a free and impartial service called Pension Wise to members of defined contribution pensions to help members understand the new pension options ( Pension Wise provides guidance on how pension pots can be used, how to shop around and what to look out for with taxes and fees. Pension Wise cannot provide formal advice, or recommend which of the options are most suitable for your particular circumstances. For this you will need to consult a professional financial adviser. You may find a useful place to find an adviser. State Pension arrangements In addition to receiving benefits from the Plan you may be entitled the single-tier State pension. This replaced the Basic State Pension and Additional State Pension from 6 April If you would like more information about State Pensions, you can contact your local Department of Work and Pensions (DWP) Office, or you can look at the Department s website on You can also request details of your likely entitlement by obtaining a pension forecast form, BR19, from the following address: State Pension Forecasting Team The Pension Service Tyneview Park Whitley Road Newcastle upon Tyne NE98 1BA 13

14 Leaving the Company or ceasing contributions What happens if I decide to stop paying contributions in to the Plan or if I leave the Company? If you are automatically enrolled into the Plan and you opt-out within one month of receiving your Welcome Pack, you will be treated as if you were never a member of the Plan at all. Any contributions you have made up to that point will be refunded through your salary, less tax and national insurance. If you have opted into the Plan (ie you have not joined through automatic enrolment) and you have paid contributions via Flex Pension, you are not entitled to a refund of the Flex Pension contributions as these have been paid by the Company. You will not be able to take a refund of your contributions if you opt-out, stop contributing, or leave the Company after one month of receiving your Welcome Pack. Instead, your contributions (and the Company s contributions) will remain invested in your Retirement Account. If you do this, you become a deferred member of the Plan. The value of your Retirement Account will go up and down depending on the market conditions of the investment funds you are invested in. As a deferred member you are not able to pay any further contributions into your Retirement Account although you can manage your investments online. Alternatively, you can request the value of your Retirement Account is transferred to another registered pension arrangement. 14

15 What happens to my death-in-service benefits? If you leave the Company your life assurance and if applicable, any entitlement to a dependant s pension you have will cease on the day you leave employment. If you decide to stop paying contributions whilst still an employee of the Company you will become a life-only member for the purpose of death in service benefits (and you may also be a deferred member of the Plan depending on how much qualifying service you have). If applicable, your dependant s pension will cease. What happens to my benefits should I die before payment of my retirement benefits commences? If you die while you are a deferred member, the value of your Retirement Account will be payable as a lump sum. This will be paid at the discretion of the Trustees of the Plan and does not form part of your estate for income tax purposes. Please ensure that you have completed an Expression of Wish form in order that the Trustees are able to consider your wishes. Forms are available in the Document Library at 15

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17 General information HM Revenue & Customs As a member of this (and any other) registered pension scheme, you are responsible for the tax consequences of your membership. You should therefore note the following: Annual Allowance Pension contributions that you pay to the Plan are deducted from your pay before tax therefore you only pay tax on what s left. So whether you pay tax at basic, higher or even additional rate you get the full relief straight away. The Annual Allowance is the limit for pension contributions paid to a registered pension scheme which you receive tax relief on. This includes any contributions made by your employer on your behalf. For most members, the Annual Allowance is 40,000 from 6 April However the Government has reduced the amount high earners can pay into their pension and still qualify for tax relief. The Annual Allowance is reduced by 1 for every 2 of income above 150,000, up to a maximum reduction of 30,000. This means that the Annual Allowance for those with income of 210,000 and above is reduced to 10,000. The details of the tapered Annual Allowance, and the definitions of what counts as income for these purposes, are complicated but more information can be found at the following website: The pension benefits you build up in the Plan are measured over the year to 5 April (called the Pension Input Period ) against the Annual Allowance. If, in one year, the total value of the contributions (including AVCs) you and the Company pay to your Retirement Account plus any contributions you pay to any other pension scheme, exceed the Annual Allowance, you may be subject to additional tax. Please bear in mind that tax treatment depends on your individual circumstances and may change in the future. You should seek professional financial advice if you think that Annual Allowance tax limits may affect you. You may find a useful place to find an adviser authorized by the Financial Conduct Authority. Money Purchase Annual Allowance If you decide to take all of your Retirement Accounts as a lump sum or flexibly access retirement savings held elsewhere then you may be subject to a restricted Annual Allowance of 10,000. This means that any contributions over 10,000 which are subsequently paid to a registered pension scheme (by you and/or your employer) would be subject to a tax charge. You should consider seeking independent financial advice before flexibly accessing any of your retirement savings and ensure that you are aware of any tax implications that may arise. Lifetime Allowance There is a limit on the value of benefits that can be withdrawn from all registered pension schemes in your lifetime without triggering additional tax charges. This is known as the Lifetime Allowance. It is set annually by HM Revenue & Customs and is 1million from 6 April Further information regarding the Lifetime Allowance can be found at in the Pensions and retirement planning section. Tax-free lump sum recycling There may be adverse tax consequences if you invest (or it could be construed that you had invested) part or all of your tax-free lump sum from a pension scheme into another pension scheme. This is often called recycling tax-free lump sums. If you are concerned about this issue you should seek professional professional financial advice. 17

18 Definitions Annual Allowance This is the yearly limit which the Government has set on the amount both you and the Company can pay into your Retirement Account without suffering a tax charge. From 6 April 2016 it is 40,000 for most people (but see the notes for high earners on page 17). Active member An employee of the Company who is paying contributions into the Plan and/or receiving contributions into the Plan from the Company. Annuity This is an option you may purchase using the money from your Retirement Account when you retire to give you an income for life (a pension). Depending on whether you choose to have a tax-free lump sum, this could be some or all of your Retirement Account. Please see the Options on retirement section for more details. Company Bidvest (UK) Ltd and certain subsidiary companies including Bidvest Foodservice, Bidvest Logistics, South Lincs Foodservice and 3663 Transport Ltd. Contributions This is the amount of your pensionable salary that is paid into your Retirement Account. Flex Pension This is the arrangement through which you reduce your salary by the amount you wish to contribute into your plan. The Company then pays the equivalent amount into the Plan on your behalf. This is also known as salary sacrifice. Funds These are the range of investments from which you can choose. Further information regarding each of the funds is available in the Your Investment Choices leaflet which is available at Life-only member A current employee of the Company who is not an active member of the Plan who is covered for life insurance only, including those who have opted out of the Plan and/or ceased to pay contributions becoming a deferred member. Lifetime Allowance This is the limit on how much you can contribute to all your pension plans in your lifetime before tax is payable. The standard lifetime allowance is 1million from 6 April Should you have more than this, the excess will be subject to an additional tax charge. National Minimum Wage / National Living Wage The National Minimum Wage is the statutory minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they re over 25. Normal Retirement Age This is the default retirement age chosen by the Trustees. The default retirement age under the Plan is age 65. Pay Protection Threshold (PPT) This is the earnings limit below which you may not participate in Flex Pension. Once your earnings exceed the PPT you will be automatically enrolled into Flex Pensions unless you choose to opt out. The level of the PPT is reviewed annually. The current level is shown in the Flex Pension guide which is available in the Document Library at Pension Input Period The Pension Input Period (PIP) is the period over which you measure contributions paid into the Plan for tax purposes. The PIP for the Plan is 6 April to the following 5 April. 18

19 Pensionable Salary Your annual earnings including fixed additions, but excluding overtime and other fluctuating payments, as notified to you by the Company. Retirement Account This is your share of the fund within the Plan in which both your own and the Company s contributions are invested. State Pension Age This is the age at which you will receive the State Pension currently 65 for men. Women s State Pension age is being gradually increased from 60 to 65 by 6 December The State Pension age for everyone will be 66 from 6 April The government has also announced that the State Pension age will increase further. Details are available at: Switching/redirecting future payments Payments made to your Retirement Account buy units in your chosen investment fund(s). You can change the funds you invest in by fund switching. You can switch your money in and out of different funds to change your investment mix. Zurich doesn t charge for doing this at present but may do so in the future. You can do this by logging into your account online at or you can contact Zurich who will process the request on your behalf. You can also redirect future payments into different funds and leave your existing investment as it is. Zurich does not charge for doing this. Selected Retirement Age This is the age at which you plan to retire and draw your pension benefits. If you wish to change this, you can call Zurich on Tax-Free Lump Sum This is an optional lump sum payment you can take from your pension plan at retirement. Under current legislation 25% of your Retirement Account is payable tax-free. Trustees The Trustees of the Bidvest (UK) Retirement Plan. 19

20 Useful contacts Zurich The Plan is administered by Zurich Assurance Limited. You can: call Zurich on ; or them at or send a fax to Zurich cannot give you advice but can give you more information to help you make an informed decision. Zurich may record or monitor calls to improve its service. Pensions Wise The Government offers a free and impartial service called Pension Wise to members of defined contribution pensions to help members understand the new pension options ( Pension Wise provides guidance on how pension pots can be used, how to shop around and what to look out for with taxes and fees. Pension Wise cannot provide formal advice, or recommend which of the options are most suitable for your particular circumstances. For this you will need to consult a professional financial adviser. You may find a useful place to find an adviser. The Pension Scheme Registry Details of the Plan including a contact address for the Trustees have been given to the Registry. The Registry s main purpose is to provide a tracking service for ex-members of schemes with pension entitlements, and members dependants, who have lost touch with earlier employers. Enquiries should be addressed to: Pension Tracing Service The Pension Service Tyneview Park Whitley Road Newcastle upon Tyne NE98 1BA Telephone: Website: 20

21 Dealing with complaints Naturally, it is hoped that any difficulties can be resolved informally. However, should a situation arise where this is not possible, you are entitled to set out your grievance in writing and submit it for resolution. Internal disputes resolution procedure As part of the Pensions Act 1995 the Trustees are required to implement a procedure for resolving disputes. If you have a complaint of this nature please write to the below contact who has been nominated by the Trustees to deal with initial complaints: Mr Chris Clough Lane Clark & Peacock LLP 95 Wigmore Street London W1U 1DQ You will be notified of the decision within two months or an interim reply will be sent. If the problem is not resolved you may refer your complaint to the Trustees within six months. You will be notified of their decision within two months, or an interim reply will be sent. The Pensions Advisory Service (TPAS) The Pensions Advisory Service i s a n i m p a r t i a l a n d i n d e p e n d e n t o r g a n i z a t i o n w h i c h is available at any time to assist members and beneficiaries of the Plan with any pension query that they may have or any difficulty that they have failed to resolve with the Trustees or administrator of the Plan. Enquiries should be addressed to: The Pensions Advisory Service 11 Belgrave Road London SW1V 1RB. Telephone: Website: pensionsadvisoryservice.org.uk 21

22 The Pensions Ombudsman The Government has appointed a Pensions Ombudsman who has the power to investigate and decide upon complaints and disputes about facts of law involving occupational pension schemes. The Ombudsman is fully independent and acts as an impartial adjudicator. The Ombudsman will normally expect to act only when a matter had been referred to t h e P l a n a n d TPAS and not satisfactorily concluded. Enquiries should be addressed to: The Office of the Pensions Ombudsman 11 Belgrave Road London SW1V 1RB. Telephone: Website: pensions-ombudsman.org.uk The Pensions Regulator The Plan is regulated by The Pensions Regulator. It can intervene in the running of pension schemes where trustees, employers or professional advisers have failed in their duties and in certain other circumstances. The Pensions Regulator can be contacted at: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW Telephone: Website: thepensionsregulator.gov.uk 22

23 Data Protection The Trustees and Company both have a legal and legitimate interest to process your personal data relating to you for the purpose of administering and operating the Plan and paying the benefits under it. This may involve passing on data about you to Zurich or other such third party as may be necessary for the administration and operation of the Plan. The Trustees and Company are both regarded as Data Controllers (as defined under the Data Protection Act 1998) in relation to the data processing referred to above. This information and its use have been registered under current legislation and you have certain rights to ensure proper security of this information is maintained as well as rights of access to your details. You also have certain obligations to ensure this information is accurate and should therefore notify the Trustees of any changes to your personal details (for example marital status). Zurich will be a Data Processor (as defined under the Data Protection Act 1998). A data privacy leaflet is available, telling you what Zurich does with the information you provide and how your privacy is protected.