BOC Pension Scheme. Summary Report and Accounts 2011.

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1 BOC Pension Scheme. Summary Report and Accounts. Welcome from John Hylands Welcome to the Summary Report and Accounts for members of the BOC Pension Scheme. This includes a summary of the Trustee s Report and Accounts for the year ended 31 March, detailing the Scheme s financial development over the year. Within this newsletter you would normally find a Summary Funding Statement, providing you with an update on the Scheme s funding position. As the Scheme Actuary is in the process of finalising the actuarial valuation, we have not included a Summary Funding Statement in this newsletter. Instead, the results of the valuation will be included in a special newsletter that will be issued to all members once the valuation has been completed. John Hylands, Chairman of the Trustee Board Inside: Accounts Fund value Investment Membership statistics Pensions news Who s who? Don t forget! More information

2 2 Summary Report and Accounts Accounts The charts below show the Scheme s income and expenditure for the years ended 31 March and 31 March. Income Member contributions Employer contributions Transfers from AVC section Individual transfers Total income 0.94m 0.95m m* 95.60m 1.98m 1.50m 4.07m** 99.24m* m *Includes additional contributions of 59.06m () and 57.31m () made by the Company to strengthen the Scheme s funding position. **Relates to members who transferred in from the Linde CryoPlants Pension Scheme, which closed on 31 July Expenditure Pensions Other benefits Leaver payments PPF levy Administration expenses Total expenditure 8.02m 3.02m 1.80m* 1.38m 63.73m 77.95m 19.0m 4.30m 1.01m* 1.43m 61.43m 87.17m *The PPF (Pension Protection Fund) levy is reimbursed by the Company and this reimbursement is included within the Employer contributions figure in the Income section above.

3 Summary Report and Accounts 3 Fund value The table below shows the overall value of the Fund at 31 March for the past two years. Value at the beginning of the year 1,965.38m 1,577.28m Income (see opposite) 95.60m m Expenditure (see opposite) ( 77.95m) ( 87.17m) Return on investments (after management charges) m m Value at the end of the year 2,137.59m 1,965.38m

4 4 Summary Report and Accounts Investment Strategy The charts below show the Scheme s strategic asset allocation at 31 March for the past two years. Bonds Equities Alternatives Cash/Alternatives Property Cash/Dynamic Opportunities 4% 6% 10% 10% 60% 10% 60% 20% 20% Performance The Joint Investment Committee uses an independent performance measurement service to measure investment returns against set targets (known as benchmarks) for each investment manager and the Fund as a whole. The bar chart below shows the return on investments compared to the benchmark over the past one and six years. Actual Benchmark One year Six years (p.a.) 7.7% 6.5% 6.7% 3.9%

5 Summary Report and Accounts 5 Membership statistics The bar chart below shows the membership details at 31 March for the past two years. Contributory members Deferred pensioners Pensioners 3,329 3,501 8,873 9,041 12,305 12,296

6 6 Summary Report and Accounts Pensions news State Pension Age update Increases to State Pension Age The Government has brought forward the increase to State Pension Age (SPA). This means that: Men s SPA will gradually increase from 65 to 66 between December 2018 and October Women s SPA will gradually increase to 65 by November Between December 2018 and October 2020, SPA will increase again to 66. These changes became law on 3 November when the Pensions Bill received Royal Assent. There are also plans for further increases to SPA, to age 67 and then 68. The timescales for these further increases have not yet been finalised. Am I affected by the increase? You will only be affected by the increase to SPA if you are: a woman born after 5 April 1953; or a man born after 5 December Please note that the change to SPA will not affect you if you are already receiving your State Pension. Impact on benefit statements The changes to SPA mean that if you are an active member or deferred pensioner you will not receive a State Pension Forecast in your 2012 benefit statement. This is because the data to estimate your SPA is provided by the Department for Work and Pensions, and they will not be able to supply this for at least the next year while they update their computer systems to reflect the changes. You will, however, continue to receive your benefit statement from the Scheme as usual. Your Pension Benefit Statement at 31 March. LeadIng. Building up valuable benefits As a member of a BOC pension scheme, you are building up valuable benefits for your retirement. Your benefit statement is important because it enables you to see whether you are building up enough pension to achieve your retirement income goals. It also includes details of how you can top up your pension. Your benefit statement outlines the benefits payable from the Scheme on leaving and death, and also provides a forecast of the pension payable from the State at State Pension Age. I hope you find your benefit statement useful. Bob Bryant UK Pensions Manager Personal details Date of birth: National Insurance number: Date of last Expression of Wish: Date of joining the Scheme: Membership level: At a glance Your State Pension forecast The figures quoted are estimates and are not guaranteed. Current State Pension On the basis of your National Insurance contribution record to date, you may get: Estimated Basic State Pension: xx.xx a year Estimated additional State Pension: xx.xx a year Estimated total State Pension: xx.xx a year Important information regarding your State Pension forecast The Current State Pension estimate is based on your National Insurance record at the date of the forecast. The Future State Pension estimate is based on the assumption that you will pay, be treated as paying or be credited with full-rate National Insurance contributions from the date of the forecast until you reach State Pension Age (SPA). If for any reason this assumption is wrong, the estimated amount above could be too high. If you are a married woman who has chosen to pay the reducedrate of National Insurance sometimes called the small stamp your Future State Pension amounts are based on the assumption that you will continue to pay reduced-rate contributions. The amounts shown are based on the current State Pension rules and the rates in payment at the time of the forecast. They do not take into account any future changes to State Pension rates or to the law relating to State Pensions that may occur before you reach SPA. The Government has announced new proposals for increasing the SPA from 65 to 66. These will speed up the rate at which rises in SPA will occur. Your SPA will be affected if you are a woman born between 6 April 1953 and 5 April 1960, or a man born between 6 December 1953 and 5 April These changes require the approval of Parliament. The Government is also considering the timetable for future increases in the SPA from 66 to 68. For further information refer to You may be able to pay voluntary National Insurance contributions for certain years. The leaflet Your pension statement explained provides further details. Your Basic State Pension (BSP) may be more than the amount shown. This is because the Government has announced a triple guarantee about how it will increase the BSP in the future. From April, the BSP will be increased every year by the highest of the growth in average earnings, prices or 2.5%. This only applies Normal Retirement Date: Pensionable Earnings to 31 March : Final Pensionable Earnings: Final Earnings: Pension contributions: x% of Pensionable Earnings Some of your personal details shown below affect the figures included in your benefit statement. Please notify BOC Pension Services if any of these details are incorrect. Scheme membership history Level x: DD/MM/YYYY to present Level x: DD/MM/YYYY to DD/MM/YYYY Level x: DD/MM/YYYY to DD/MM/YYYY Annual pension built up to 31 March : X,XXX,XXX.XX Prospective annual pension at Normal Retirement Date: XX.XX Lump sum benefit on death in service: XX.XX Level x: DD/MM/YYYY to DD/MM/YYYY Level x: DD/MM/YYYY to DD/MM/YYYY Future State Pension By the time you reach State Pension Age, you may get: Estimated Basic State Pension: xx.xx a year Estimated additional State Pension: xx.xx a year Estimated total State Pension: xx.xx a year The earliest you can receive your State Pension is when you reach the age of <xx> years and <xx> months. You need to claim your State Pension. to the BSP. This does not apply to the additions to the State Pension. From 6 April 2012, if you are a member of a contracted-out defined contribution pension scheme (also called a money purchase scheme), you will cease to be contracted out and may start to build up additional State Pension instead. This change does not affect the estimated Current State Pension amount shown above. However, if you are currently in a contracted-out defined contribution pension scheme, the amount of additional State Pension included in the Future State Pension does not include any further additional State Pension you may build up from 6 April 2012 because you are no longer contracted out. Pension forecasts will reflect this change when National Insurance records have been updated. The amount of additional State Pension you actually receive at SPA may be different from that shown in your forecast, especially if you have been or remain a member of a contracted-out pension scheme. There are plans to change the additional State Pension to a simple, flat-rate weekly top-up to the BSP. If you receive more than one State Pension forecast, do not add the amounts together. Always use the more recent forecast you have received. The amounts do not include any other income your household might receive from income-related benefits such as Pension Credit. If you think any of the information in this forecast is wrong, please let the DWP know by telephoning The leaflet Your pension statement explained (CPF5) gives more information about your State Pension. For a copy of this leaflet, please visit dg_182356, telephone or textphone to ask for a copy.

7 Summary Report and Accounts 7 Who s who? The Trustee Directors BOC Pension Scheme Trustees Limited (the Trustee) is responsible for the Scheme s affairs. The following individuals made up the board of Trustee Directors at 31 March : Company-Appointed Directors John Hylands (Chairman) Independent Trustee Capital Cranfield Professional Trustee represented by Joanna Matthews Louise Johns Gases, Guildford Ian Rennie Gist, Basingstoke Christoph Schlegel Group, Munich Andrew Smith Gases, Guildford Lindsay Tunbridge Gases, Guildford Member-Nominated Directors* Leigh Franks Retired member Clive Morton Retired member Dave Riggall Gases, Scunthorpe Phil Struthers Gist, Basingstoke * Elected from and by the Pensions Advisory Council. * Resigned with effect from 31 March. The advisers and administrators The following advisers and administrators were retained by, or acted for, the Trustee during the year: Actuary RS Bowie FFA, Hymans Robertson LLP Administrators BOC Pension Services Auditor Ernst & Young LLP Bank HSBC Bank plc Investment Adviser Mercer Limited Investment Services BOC Pension Investment Department Legal Adviser Mayer Brown International LLP Medical Adviser Capita Health and Wellbeing

8 Summary Report and Accounts Don t forget! Scheme website re-launched The re-developed BOC Pension Scheme website is now live go to As well as including plenty of information about the Scheme, the site has several interactive tools that can help your retirement planning, such as pension and contribution calculators. Why not visit it today? More information A copy of the full Report and Accounts for the Scheme is available to download from the website at or on request from BOC Pension Services. Members who have paid Additional Voluntary Contributions (AVCs) should note that the Annual Report for AVC section is published separately as part of the RS Plan Report and Accounts and a summary will be included in the RS Plan newsletter. A copy of the RS Plan Report and Accounts is also available on the website or on request. Legal note Please note that this newsletter is intended to summarise the events of the past Scheme year and nothing in it grants any legal right to benefits. Your entitlement to benefits is defined in the Trust Deed and Rules at the date you leave service (as amended from time to time). You can download a copy of the current Trust Deed and Rules from the website at or request one from BOC Pension Services. If you are a pensioner or a defered pensioner you should ask for a copy of the edition which applied when you retired or left service. Designed and produced by Anthony Hodges Consulting Limited _3122 Contact details BOC Pension Services The Priestley Centre 10 Priestley Road The Surrey Research Park Guildford Surrey GU2 7XY Helpline: (BOC TEL ) Pensioner helpline: Fax: pensions.uk@boc.com Website: December