Transfer guide. Combining your pensions with Zurich

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1 Transfer guide Combining your pensions with Zurich This guide describes the potential benefits of you transferring the value of a pension to your current pension with Zurich and the things you should think about before deciding to transfer.

2 Things to think about before you transfer If you re reading this, you re already thinking about transferring a pension to your current pension with Zurich. Before you do, you should remember that while for many people transferring will be a good idea, it isn t right for everyone. The following information will help you decide. Think about differences between the pension you want to transfer and your current pension with Zurich There are different types of pension. Do you know which type of pension you want to transfer? You should speak to your plan provider to find out, as this may affect your decision. Does the pension you want to transfer offer guarantees, benefits or features that you would lose if you transfer? Does your current pension with Zurich offer the retirement options you want? Does your current pension with Zurich offer investments that match your retirement plans? How do the charges compare? You ll find information about your pension with Zurich and the available investment options through your plan website. For information about previous pensions, contact the pension provider or trustees. Find a lost pension If you don t have details of your old retirement savings you can use the Government s free Pension Tracing Service to find them. Visit gov.uk/find-lost-pension. Think about your circumstances Have you thought about what you want from your retirement and whether this is best achieved through a cash lump sum, secure pension income, flexible pension income or a combination of these? Regularly reviewing your pension savings can help you keep track with your objectives this may be easier if they re in one place. Alternatively, keeping separate plans could give you added flexibility of taking benefits at different times. 2

3 What guarantees and features should I look out for when transferring a pension? Some pensions may have guarantees, benefits or other valuable features that you ll lose if you transfer. We ve based this information on our understanding of current UK law and HM Revenue & Customs rules as of August Future changes in law and tax practice or in your own circumstances could affect taxation. You can find information about any guarantees and benefits by contacting the applicable pension provider or trustee. For pensions with Zurich, you ll find information on your scheme website. Does the pension you want to transfer have any guaranteed benefits? Some pensions offer a guaranteed rate when you come to convert your pension savings into a secure income (annuity). Transferring from a plan that offers this guarantee, means that in future you would have to convert your pension savings into a secure income using whatever rate applies at the time this might be a lot lower than the guaranteed rate, meaning you d get a significantly lower pension income. Does the pension you want to transfer have any protected benefits? This may include things like The option to take more tax free cash than the maximum (usually 25% of your pension savings) The option to take your pension benefits earlier than the normal minimum pension age (currently age 55) Protected maximum lifetime pension savings limits that are more than the current Lifetime allowance (currently 1,000,000) Does the pension you want to transfer have features you want to keep? This may include things like Payment protection, sometimes called waiver of contribution, meaning pension payments may continue to be made on your behalf if you re sick or injured and unable to work (this only applies if you are still making payments into this plan) Death benefits or critical illness benefits that are difficult or expensive to replace Loyalty bonuses Guaranteed growth Is there anything else that might affect your decision to transfer? Are payments still being paid into the pension you want to transfer? If so, what impact would stopping these payments have on your retirement? If your pension is affected by divorce or bankruptcy, or if you are close to retirement, it would be a good idea to think about getting some financial advice before you decide to transfer. In most cases you re likely to be worse off if you transfer out of a defined benefit scheme (also known as a final salary scheme). For this reason, Zurich won t usually accept a transfer from this type of pension scheme unless you have taken financial advice. Please contact us if you are thinking about transferring from a defined benefit scheme. 3

4 What charges should I look out for? The pension you want to transfer and your current pension with Zurich have charges. Older pensions are more likely to have higher charges and charges may not be easy to compare. When comparing charges, don t forget the pension you re looking to transfer may also have funds with similar objectives and levels of investment risk but with lower charges. You may be able to benefit from lower charges by simply switching funds in that pension. Small differences in charges can make big differences to your pension over a long period of time. If charges on your current pension with Zurich are higher, and/or if there s a financial penalty for transferring, you should consider how much extra investment growth is needed to compensate for the higher charges or any penalties and whether it s realistic. Different charges you may see include Product charges such as annual management charges Investment / fund charges Exit charges or transfer fees You can find information about charges by contacting the applicable pension provider or trustee. For pensions with Zurich, you ll find information on your scheme website. 4

5 What do I need to know about investments? The pension you want to transfer and your current pension with Zurich have a range of investment options. Weigh up which investment choices match your retirement objectives and attitude to risk. Attitude to risk All investments carry some risk that you ll get back less than you invest. Choosing a higher risk investment offers better potential for investment growth but comes with the increased chance of losing some or all of your money. On the other hand, choosing a lower risk investment means less potential for investment growth but less chance of losing money. Do the investment options available match your attitude to risk and how much you can afford to lose particularly if you re close to retirement? Reviewing investment performance Whether or not you transfer, you should regularly review your investment choice to make sure it s still on course to meet your retirement objectives particularly as you approach retirement. If you re invested in with profit funds, consider whether switching funds might mean you miss out on a bonus that depends on you remaining invested until a specified date. If you re close to retirement, you need to review your investment choices. You may decide to be more cautious to help defend against unexpected falls in value as you reach retirement, but this could also mean you may miss out on any future investment growth. Fund performance depends on various factors including economic performance and how well the fund is managed by the fund management company. Guaranteed future growth Some older pensions may invest in with-profits or other funds which offer some guarantees including guaranteed rates of growth or bonuses. While Zurich pensions gives you access to a choice of investments with a range of objectives and attitudes to risk, they don t provide any guarantees. If the funds in the pension you want to transfer have any guarantees, think about whether they will meet your retirement objectives. If they do, think if transferring is right for you. Out of market When transferring money from another pension provider to Zurich, it may remain out of market (uninvested) for up to seven days. This is the time it takes for the money to be taken from one plan and re-invested in another. Generally, and depending on investment choices, if markets rise during the out of market period the transfer value will not benefit from that growth. Alternatively, if the stock market drops during this period, your transfer amount will not fall in value. However, for transfers between Zurich plans we aim to invest your money into your new plan on the same date that we transfer the money from your old plan, minimising the amount of time that your money is not invested. You can find information about funds and investments by contacting the applicable pension provider or trustee. For pensions with Zurich, you ll find fund information on your scheme website. 5

6 Other things to think about While you can find more information about your pension with Zurich on your scheme website, we ve outlined the key factors that will affect its value. How much your pension plan will be worth in future to provide for your retirement will depend on How much money you save and how long it is invested The performance of the investments which can go down as well as up The charges you pay To make sure you re on track to meet your changing circumstances and retirement objectives, you should regularly review your pension. You ll receive statements every year to help you do this you ll find more information on your scheme website. When reviewing your plan, concentrate on things like Retirement objectives have your retirement plans changed and are you saving enough to meet your objectives? Retirement age How long until you plan to retire? Attitude to risk This is likely to change as your circumstances change and as you approach retirement will it affect your investment choices? Investments Are your pension savings invested in the right funds for your current needs? If you need any further information, get in touch. Contact details can be found on the Contact Us section of the website. Zurich pension products are provided by Zurich Assurance Ltd or Sterling ISA Managers Limited. Your plan documents give you details about which company is your product provider. Zurich Assurance Ltd, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales under company number Registered office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX. Zurich is a trading name of Sterling ISA Managers Limited. Sterling ISA Managers Limited, authorised and regulated by the Financial Conduct Authority. Registered in England and Wales under company number Registered office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX. PW (09/16) RRD