Siemens Investor Plan

Transcription

1 Siemens Investor Pln Your complete guide to mking the most of your Siemens pension If you nee d dvice... IFA Pro motion cn pro indepe v ndent finnci ide contct d Visit th et l dvise eir web rs in yo ils of site t: ur re nbise d.co.u k Providing ty uri c se l i c finn re is u t u f r ou y r fo nt t r o p m i y ll vit

2 Contents Step 1 Step 2 Step 3 How the Pln works 3 Key fetures 4 Tx dvntges 4 3 simple steps to help you sve for retirement 5 Step 1 Know how much you ll need when you retire 6 When cn I retire? 6 How will my pension increse? 6 Wht re my Stte pensions? 6 Retirement options 7 Step 2 Contribute s much s you cn, s soon s you cn 8 Missing out on compny contributions? 8 Contributing more thn 10%? 8 It costs less thn you think 9 Ntionl Insurnce svings for My choice members 9 Contribution clcultor 9 Modeller 9 Step 3 Mke your svings work hrd for you 10 Things to think bout 10 Wht stge of life re you t? 10 Is there ny risk? 10 Time nd control 10 Lifestyle 11 Wht hppens if I chnge my nominted retirement dte? 11 Freestyle 12 Chnging your investment choices 13 Costs 13 How long do chnges tke? 13 How well do we know you? 14 Other benefits 16 Deth protection benefits 16 Leving benefits 16 Wht if 16 Glossry 18 Finding out more 19 Plese note tht, while this guide provides summry of the min benefits of the Investor Pln, it does not cover every spect. Full detils re contined in the Trust Deed nd Rules, which is the legl document governing the Siemens Benefit Scheme, nd would override this guide if there is ny inconsistency between them. 2

3 People re now living for decdes fter they retire, giving them the freedom to do the things they never hd time to do when they were working. So providing finncil security for your future is vitlly importnt, nd it s your responsibility. As member of the Investor Pln (the Pln) you build up retirement svings to help you live the life you wnt when you retire. Membership lso gives you nd your dependnts finncil protection while you re still working. This guide explins how the Pln works nd describes your benefits nd those provided for your dependnts. It differs from previous guides becuse it is structured round simple 3-step pln to help you mke the most of your retirement svings you cn find out more on pge 5. Specil terms tht re used in this guide re highlighted in bold throughout, nd defined in the Glossry on pge 18. How the Pln works The Investor Pln is the Defined Contribution Pln within the Siemens Benefits Scheme. It is open to most employees ged between 16 nd 75. When you join Siemens, you utomticlly join the Pln nd the Trustees set up notionl investment ccount in your nme. Ech month, your notionl ccount is credited with your contributions nd those mde by the Compny. The Trustees invest these contributions in the investment strtegy you choose. When you retire, you use the money built up in your ccount to buy retirement benefits. Your benefits will depend on: the vlue of your ccount t the time, the cost of buying benefits (which is ffected, mong other things, by your ge nd investment conditions when you retire), nd the type of benefits you choose. These benefits re pid in ddition to ny Stte pensions you re entitled to. You cn get more informtion bout the Investor Pln t Specil terms for Continuing Members If you were n ctive member of the Horizon, FSB or Legcy Pln on 31 December 2007 when these Plns were closed s result of the Compny s pension chnges, nd becme member of the Investor Pln on 1 Jnury 2008, you re known s Continuing Member. As Continuing Member, you benefit from enhnced contributions to the Investor Pln, s well s certin gurntees in reltion to your benefits. These were described fully t the time of the chnge nd you cn find out more on the pensions website t 3

4 Key fetures Contribute You choose how much to py into your ccount ech month; the minimum is 3% of your pensionble slry Investment choice You hve choice of 2 investment strtegies: Mtching Siemens lso credits your ccount, mtching your contributions up to 10% of your pensionble slry Sve more You cn py more thn 10% by mking Additionl Voluntry Contributions (AVCs), nd My choice members cn lso py Employee Directed Contributions (EDCs) 1 - Lifestyle, which follows blnced investment pproch defined by the Trustees, hving tken professionl dvice, utomticlly moves your svings into less voltile investment options when you pproch retirement, nd 2 - Freestyle, which gives you the freedom to choose nd mnge your own mix of investments from the 12 options vilble. Benefits to suit you You choose benefits to suit your personl circumstnces when you retire Ill-helth pension If you hve to retire erly becuse of ill helth, you my lso receive n ill-helth pension Tx-free csh You cn choose to tke txfree csh sum of up to 25% of the vlue of your ccount Deth benefits Retire erly You my be ble to retire erly from ge 55, with the consent of the Compny nd the Trustees; you my even (with the Compny s consent) be ble to drw pension nd continue working If you die before drwing your pension, the Pln offers rnge of benefits for your fmily nd dependnts, including csh sum pid (t the Trustees discretion) to one or more of your reltives, dependnts, personl legl representtives or nominted beneficiries Tx dvntges Tx-relief Your contributions re deducted before tx so most members will receive immedite tx relief up to their highest rte of tx. You don t py tx on the Compny s contributions Deth benefits Your dependnts won t normlly py tx on ny csh sum pyble if you die Svings The investment returns you ern on your svings re minly tx free Tx-free csh You cn tke tx-free csh sum of up to 25% of the vlue of your ccount t retirement Income tx All pensions re treted s erned income nd re txed under PAYE The Pln is registered with HM Revenue & Customs, so the dvntges shown bove pply under current regultions. In return for these tx concessions, HM Revenue & Customs sets rules tht pply to pension benefits nd contributions. In exceptionl cses, benefits nd/or contributions my be restricted to comply with these rules, see pge 9 for detils of the Annul Allownce nd Lifetime Allownce limits. 4

5 3 simple steps to help you sve for retirement Pension plnning cn seem complex nd dunting, but if you brek it down into 3 simple steps, you cn tke control of sving for retirement: Step 1 Step 2 Know how much you ll need when you retire Contribute s much s you cn, s soon s you cn n re c Cent ever, y r e v w i o el 9). H ht HR D t the ee pge 1 wht mig m s ( n e T o n s n tio ou ensio orm tion. vise y The P more inf sed to d nl situ u ri so you o, yo utho r per give t to d n not st for you e h r w y o t the ing t be be bou ). sure out spek iser (IFA n u l l v i b t d FA s I l l k e r ci hin loc If you should t ent finn me of se be end e n. Ple indep n find th ed.co.uk ge you r s c h i You w.unb yc A m. w F I w n t t ces e th ser vi wr for their If Step 3 Mke your svings work hrd for you vice d d you nee 5

6 Step 1 Know how much you ll need when you retire When cn I retire? The first step is to work out how much you will need in retirement to fford the lifestyle you would like. Will you still be pying off your mortgge? Wht will your bills nd other outgoings be like? Hve relistic figure to im for. The Pln s norml retirement dte is the end of the month in which you rech 65. However, you my be ble to retire erly from ge 55, with the consent of the Compny nd the Trustees. If you wnt to retire t ny ge other thn 65, nd re invested in Lifestyle strtegy, you must choose nominted retirement ge to let the Trustees know when to switch your ccount out of the Privte option nd into the lower-risk Infltion-linked Annuity Trget option (see pge 12 for further detils of these options). You would need to complete Confirming your nominted retirement ge form which you cn get from or by contcting the Pensions Tem t the HR Delivery Centre (see pge 19 for detils). It s importnt tht you do this; if you don t choose nominted retirement ge your ccount my be left in higher-risk options t time when you my wnt to be looking to protect your svings. How will my pension increse? Wht re my Stte Pensions? For further informtion on Stte Benefits visit the Government s Directgov website: Opposite you cn see summry of the different retirement options for both ctive members (currently pying in to the Pln) nd deferred members (no longer pying into the Pln becuse you hve either opted out or left Siemens): How your pension increses ech yer depends on the type of pension (nnuity) you choose, for exmple no increses, RPI increses, etc. In ddition to your Pln benefits, you will receive the Bsic Stte Pension. You my lso be entitled to the Stte Second Pension if you hven t contrcted out through personl rrngement. Bsic Stte Pension This is flt-rte pension pid to ll employees t Stte Pension Age who hve n dequte record of Ntionl Insurnce contributions. It is indexed ech yer by the Stte. Stte Second Pension The Stte Second Pension provides pension linked to the ernings on which you hve pid Ntionl Insurnce contributions. Although the Investor Pln is not contrcted out, you re ble to contrct out through personl rrngement. You would not receive the full ernings-relted prt of the Stte Second Pension if you hve been in contrcted-out Pln. 6 Step 1

7 Retirement options Retire t ge 65 Erly retirement Lte retirement Ill-helth retirement Active members You use the money in your ccount to buy retirement benefits: Csh sum: you cn tke tx-free csh sum of up to 25% of the vlue of your ccount, up to the Lifetime Allownce. Some employees with longer service my hve the option to tke more thn 25%. If you tke csh sum t retirement, it will leve less money to buy your pension. If you re Continuing Member, your mximum csh sum would be clculted by combining your deferred Defined Benefit pln benefits nd your Investor Pln ccount. You cn choose, with very few restrictions, to use your Investor Pln ccount to py s much of tht csh sum s you wish, s this my provide better vlue for you thn scrificing some of your DB pension. Pension: fter tking csh sum, you must use the blnce of your ccount to buy pension from n insurnce compny. You cn choose pension tht suits your circumstnces, for exmple, one tht provides pension for your spouse or dependnt when you die. You cn lso choose the level t which your pension will increse (if ny). If you don t mke choice, the Trustees will choose the insurnce compny nd type of pension for you. With Compny nd Trustee consent, ctive members cn currently retire t ny time from minimum pension ge which is currently ge 55. It my even be possible to tke your benefits nd continue working. You use the money in your ccount to buy your choice of retirement benefits in the sme wy s if you hd retired t ge 65. Don t forget though, if you retire erly, you will hve hd less time to build up your ccount nd cn expect lower level of benefits. Not everyone wnts to tke their pension from ge 65. You my be ble to work beyond your norml retirement dte nd, with the consent of the Trustees nd the Compny, continue contributing to your ccount. Or, you could (gin with Trustee nd Compny consent) stop being n ctive member nd leve your ccount invested until you retire, when you would use it to buy your choice of retirement benefits in the sme wy s if you hd retired t ge 65. If you hve to retire becuse of ill helth, nd the Trustees nd the Compny gree (fter tking medicl dvice), you my be entitled to receive your pension erly. If your illness prevents you from undertking ny form of work in the future: the Compny will credit your ccount with between 3% nd 6% of the pensionble slry you erned in the previous 12 months for ech yer between your ill-helth retirement nd ge 65. The exct percentge will depend on the contributions you mde in your lst 12 months of pensionble service. If you hd contributed 3%, the Compny credit would be 3%, if 4% it would be 4%, if you contributed 6% or more, it would be 6%. If your illness mens you could not crry on doing your current job, but might be ble to do nother job: the Compny will credit your ccount with 3% of the pensionble slry you erned in the previous 12 months, for ech yer between your ill-helth retirement nd ge 65. You then use your ccount to buy your choice of retirement benefits in the sme wy s for ordinry retirement. Serious ill-helth: if your life expectncy is seriously reduced, the whole of your ccount (including Compny credits), my be pid s csh sum. Deferred members When you retire, you use the money in your ccount to buy your choice of retirement benefits in the sme wy s if you hd retired s n ctive member. With Trustee consent, you cn currently retire t ny time from minimum pension ge, which is currently ge 55. You use the money in your ccount to buy your choice of retirement benefits in the sme wy s if you hd retired t ge 65. You cn leve your ccount invested fter ge 65 with the Trustees greement. When you do retire, you would use it to buy your choice of retirement benefits in the sme wy s if you hd retired t ge 65. If you hve to retire becuse of ill helth nd hve not reched ge 65 you my, with the consent of the Trustees, be ble to drw your benefits erly. This is subject to the Trustees greeing, fter tking medicl dvice, tht you re (nd will continue to be) incpble of doing your norml job due to your physicl or mentl helth. Step 1 7

8 Step 2 Contribute s much s you cn, s soon s you cn Missing out on compny contributions? As very generl rule of thumb, it s often suggested tht the totl percentge of ernings tht should be sved to provide good level of pension is n mount equl to hlf your ge. So if you re in your 40s, trget totl contribution (including the Compny s contribution) would be 20% or more of your bsic slry. However, the exct mount will depend on your own sitution wht s right for some people is not necessrily right for you. The importnt thing is tht you contribute s much s you cn, s soon s you cn, to mke the most of Compny mtching contributions, s well s to benefit from the tx dvntges nd, for My choice members, Ntionl Insurnce svings. You cn choose to contribute between 3% nd 10% of your pensionble slry s mtched contributions, which mens tht the Compny will contribute the sme mount to your ccount. Contributing more thn 10%? Your contributions (%) Mtching Compny contributions (%) Totl mount credited to your ccount (%) Additionl Voluntry Contributions (AVCs) nd Employee Directed Contributions (EDCs) If you wnt to contribute more thn 10% of your ernings, your options re AVCs nd/or (for My choice members) EDCs. AVCs cn be set s monthly fixed mounts or s percentge of slry, or you cn mke one-off contribution t ny time. A significnt difference between AVCs nd mtched contributions is tht the Compny doesn t mtch your AVCs. However, AVCs which re tken stright from your slry whether regulr or one-off pyments utomticlly qulify for tx relief up to your highest rte of tx. You don t even hve to mention them on your tx return! However, if you py AVCs by cheque out of txed income, you will need to complete self ssessment tx return to obtin the tx relief. You cn contribute up to your full monthly ernings (less Ntionl Insurnce nd ny other deductions) in AVCs. To py AVCs or chnge the mount you py, simply downlod nd complete n Additionl Voluntry Contributions form from the Investor Pln website t 8 Step 2

9 EDCs operte in similr wy to AVCs but your EDC contribution rte must be set s prt of the My choice nnul enrolment process. A mximum of 35% of your pensionble slry cn be contributed through slry conversion. You hve the sme rnge of investment strtegies for AVCs nd EDCs s you hve for ny other contributions. Similrly, when you retire, they form prt of the overll fund from which you will tke/buy benefits. It costs less thn you think Your contributions re deducted before tx so most members will receive immedite tx relief up to their highest rte of tx. In return for this tx relief, HM Revenue & Customs sets limits on pension benefits nd contributions. This mens tht ny contributions credited to your ccount bove the Annul Allownce ( 50,000 for 2011/12 tx yer) will incur tx chrge. We will tell you if you re close to these limits. See Annul Allownce nd Lifetime Allownce in the Glossry on pge 18. Ntionl Insurnce svings for My choice members If your employer prticiptes in My choice, mtched contributions nd EDCs re not tken directly from your slry. You mke contributions through process clled slry conversion. Effectively, your slry is reduced by the mount of member contributions you select. Your employer then pys n equl mount, in ddition to its own contributions, into your ccount. Slry conversion mens you py lower Ntionl Insurnce contributions. Wnt to see how much incresing your contributions would ctully cost you? And the difference it could mke to your pension? Try the Contribution clcultor nd Modeller tools t You lso continue to benefit from tx relief t your highest rte of tx. Not ll employers prticipte in My choice. If your employer is not prticipting in My choice, you choose wht level of contribution you wish to mke nd this will be deducted from your monthly slry. Contribution clcultor Becuse of the tx relief you get on your contributions, the impct on your slry is less thn you might think. At the beginning of June 2011, we re lunching contribution clcultor which will help you to work out wht you cn fford to sve for retirement. You will find the clcultor t Modeller Our modeller cn help you see quickly nd esily how contributing different mounts could ffect your retirement svings. If retirement s long wy off, even 2% increse could mke huge difference over the yers especilly when you consider tht the Compny will mtch wht you contribute, up to 10%. Try the modeller t Step 2 9

10 Step 3 Mke your svings work hrd for you Things to think bout Wht stge of life re you t? Is there ny risk? The vlue of your retirement benefits depends not only on how much is pid into your ccount, but lso on how your investments perform. You choose how to invest your ccount depending on your personl circumstnces nd ttitude to risk. If you don t mke choice, you will be considered to hve chosen the defult investment strtegy (Lifestyle 11), nd this is where the Trustees will invest your ccount. The importnt thing is tht you consider wht it mens nd whether it s right for you. The decision tree on pges will help you decide. You cn lwys switch to Lifestyle 6 or 16, or Freestyle, if you wish. How long do you hve until you retire? How much risk re you hppy tking? How much time cn you spend reviewing your investments? How much control do you wnt over your investments? If you re in the erly or middle prt of your creer, you my be willing to choose higher level of risk with the possibility of higher return. Investments such s equities nd commercil property my be worth considering. If you re strting to consider retirement, stbility my be more importnt to you, so bonds my be worth considering. As you get close to retirement, you my wish to protect the cpitl vlue of your ccount. You my wish to consider investing in csh. All investments hve level of risk tht cn ffect how your ccount performs. The risk we re tlking bout here is the risk tht your ccount could fll in vlue. Investments, such s equities (stocks nd shres) nd property crry higher risk, prticulrly of sudden, short-term dips in vlue, but historiclly they hve delivered the best long-term growth. Lower-risk investments, like bonds nd csh, hve historiclly been more stble option in the short term, but the expecttion of our finncil dvisers is tht they will provide lower level of return over the long term. However, this is only bsed on their judgement; it is not certinty. You cn potentilly reduce the level of risk tht your ccount is exposed to by spreding your investments cross brod rnge of sset clsses, mixing higher-risk options with lower-risk ones. This is known s diversifying. Time nd control Depending on how much control you wnt over your investments nd how much time you wnt to spend mnging them, you cn choose from 2 investment strtegies: Lifestyle, which follows blnced investment pproch defined by the Trustees nd their dvisers, nd utomticlly moves your svings into less voltile investment options when you pproch retirement Freestyle, which gives you the freedom to choose nd mnge your own mix of investments from the 12 options vilble 10 Step 3

11 Lifestyle Lifestyle is imed t members who wnt to hve their investments mnged for them. In the erly yers your ccount is invested in the Privte option (equities, property, commodities nd emerging mrkets), which ims for long-term growth. Then, s you pproch your nominted retirement ge, your ccount is switched into the Infltion-linked Annuity Trget option (bonds nd gilts) nd Csh to help protect its vlue. There re 3 Lifestyle strtegies: Lifestyle 6, Lifestyle 11 nd Lifestyle 16. Lifestyle 6 strts switching your ccount from the Privte option when you get within 6 yers of your nominted retirement ge. Lifestyle 11 nd 16 strt the switching when you get within 11 nd 16 yers of your nominted retirement ge. Lifestyle 11 is the defult investment strtegy for members who don t mke choice. Here you cn see how Lifestyle 11 works: Helping you choose wht s right for you Mking investment choices cn be quite dunting, so the decision tree overlef is here to help. Simply nswer the questions, follow the flow nd see wht might be right for you. You cn lso use our fun investment profiler t to give you n ide of wht type of investor you might be. How Lifestyling works Lifestyle switches tke plce once qurter, usully in Jnury, April, July nd October. Your ccount is switched (nd future contributions invested) ccording to your length of time to retirement. This is clculted in yers nd dys t ech qurter end using your nominted retirement ge. (Remember tht if you hve not ctively selected retirement ge it will be ssumed to be your norml retirement dte.) If you hve more thn five yers to retirement the Lifestyle strtegy follows two wy switching process. This mens tht your ssets re switched between the Privte option, the Infltion-linked Annuity option nd the Csh option s described bove to chieve the blnce between them intended t your ge. Usully tht mens tht the switches re from the Privte option to the other options becuse s your ge increses so does the proportion of your ccount which is intended to be in the less voltile options. However, if there re periods when the Privte option performs less well thn the other options, the switches my be in the reverse direction. This is to ensure you hve the pproprite proportion of growth ssets while you re still some wy from retirement. Once you re within five yers from retirement the Lifestyle strtegies move to one wy switching process, which mens tht your ssets will only be switched (if pproprite) from the Privte option to the Index-linked Annuity option nd to Csh. This is so tht when you pproch retirement your ssets sty in the less voltile bonds nd csh to help preserve the known vlue of your pension pot. Note tht if you chnge your nominted retirement ge (or first provide one which differs from your norml retirement dte) then, depending on your ge, tht could trigger switching between options of the kind described bove. Wht hppens if I chnge my nominted retirement dte? It is importnt to note tht if you re within 5 yers from your nominted retirement dte nd you decide to chnge your retirement dte, 1 of 2 things will hppen: If by chnging your retirement dte you hve more thn 5 yers until you pln to retire then your future contributions nd existing ccount will ll be switched to reflect this new dte. If by chnging your retirement dte you still only hve 5 or less yers to you retire then only your future contributions will be invested differently; your existing ccount will remin invested bsed on your originl retirement dte. If you hve ny questions regrding this process plese contct the Pensions Tem t the HR Delivery Centre (see pge 19 for detils). Step 3 11

12 Step 3 Mke your svings work hrd for you...continued Freestyle Freestyle gives you the freedom to choose nd mnge your own mix of investments from the 12 options vilble. Privte Globl Equity Active Globl Equity Pssive UK Equity Active UK Equity Pssive Diversified Growth Property Infltion-linked Annuity Trget Fixed Annuity Trget Csh Ethicl Shrih A diversified option tht invests in pssive equities in the UK nd the rest of the world Also invests in brod rnge of other sset clsses, including property, emerging mrkets nd commodities Designed to chieve long-term growth with less short-term voltility thn is likely when only investing in equities Invests in both UK nd overses equities with ctive mngers who seek to outperform these mrkets In the pst, the long-term returns from equities hve exceeded those from property, bonds nd csh but equities cn be voltile in the short term Invests in UK nd overses equities in similr proportions to the Globl Equity Active option This option simply ims to mtch the performnce of the mrkets nd is invested with single pssive mnger Invests solely in UK equities, using ctive mngers who seek to outperform the mrket Hs the dvntge of hving no exposure to foreign currency risk Invests solely in UK equities, similr to the UK Equity Active option This option is invested with single mnger, who ims to trck the performnce of the FTSE All Shre Index t low cost A diversified option tht invests in brod rnge of sset clsses, including ctive nd pssive equities (UK nd interntionl), property, emerging mrkets nd commodities Designed to chieve long-term growth with less short-term voltility thn is likely when only investing in equities An ctively-mnged option tht ims to provide growth by investing in commercil properties both in the UK nd globlly Invests in selected properties, nd lso in property funds tht re trded on stock mrkets Invests (mostly pssively) in index-linked nd conventionl gilts, plus investment-grde corporte bonds issued by Blue Chip compnies Aims to mirror the chnges in the price of infltion-linked nnuities nd to grow in line with infltion, rther thn chieve excessive returns Designed for members close to retirement who re plnning to buy n infltion-linked pension (nnuity) Invests (mostly ctively) in conventionl (fixed interest) gilts, s well s investment grde corporte bonds Aims to mirror the chnges in the price of fixed-rte nnuities nd to grow in line with mrket interest rtes rther thn infltion Designed for members close to retirement who re thinking bout buying fixed-rte pension (nnuity) Designed to mtch returns from bnk or building society deposit ccounts, but it is not deposit ccount Invests in csh-like securities provided by governments nd finncil institutions Designed for members who re close to retirement nd wish to preserve the cpitl vlue of some, or ll, of their ccount In unusul circumstnces this option cn reduce in vlue Invests through single ctive mnger who chooses UK shres in compnies who do not, for exmple, trde in tobcco, nucler nd conventionl wepon systems, operte nucler power sttions, hve involvement in gmbling or my be seen to exploit Third World countries Becuse of the restrictions in ethicl investment, this option my result in lower performnce or higher voltility thn the lterntive equity-bsed investment options Invests consistently with specific spects of Islmic Lw Investments re verified by Islmic scholrs who sit on the Dow Jones Shrih Bord Excludes investments in compnies tht profit from rms, lcohol, tobcco nd pork (nd others) Becuse of the restrictions in this type of investment, this option my underperform n equivlent option without these restrictions 12 Step 3

13 Active options The investment mngers use their skill nd judgement to choose investments which they believe will outperform the mrket. These options hve the potentil for better returns thn n index-trcker option, but they lso crry the risk of not performing s well. Pssive options (lso known s index-trcker options) An index (for exmple the FTSE or Dow Jones) mesures the movement of sset prices in prticulr mrket, setting stndrd tht investors cn use to judge performnce. Index-trcker options im to trck the performnce of the mrket to reduce the risk of performing worse thn the mrket. However, they do not im to bet the mrket even when the mrket flls. Chnging your investment choices At ny time: You cn switch between Lifestyle nd Freestyle In Freestyle, you cn move your existing ccount nd/or chnge your ongoing contributions between the different investment options In Lifestyle, you cn chnge your nominted retirement ge You cn mke chnges t or complete nd return n Investment choice form which you cn get from the website or by contcting the Pensions Tem t the HR Delivery Centre (see pge 19 for detils). If you re using the form nd wish to mke different chnges to individul contribution types plese contct the Pensions Tem. You should not rely solely on the informtion provided in this guide when deciding where to invest. Alwys consider tlking to n independent finncil dviser (IFA). You cn find locl IFA t Costs Ech investment option hs n nnul mngement chrge; you cn find out more t Also, when you move investments from one strtegy or option to nother you my, in effect, incur costs. This is becuse investment mngers cn reflect in the unit price the costs of buying dditionl ssets or the costs of selling ssets, depending on the totl csh flow in or out of the investment option ech dy. The Compny currently meets ll dministrtion chrges. However the Trustees reserve the right to introduce chrges for members who mke frequent chnges. Review your investment choices t lest once yer When you first mke your investment choices, you will be choosing wht is right for you t the time. However, s you go through life, your needs, nd perhps your ttitude to risk, re likely to chnge; you my even be missing out on better investment returns. We recommend tht you review your investment choices regulrly t lest once yer; when you receive your benefit sttement is n idel time. Reviewing nd chnging your investments is esy. Simply go to: How long do chnges tke? The Pensions Tem t the HR Delivery Centre will mke chnges once they receive your instructions. However, there is period of bout 9 working dys towrds the beginning of every month during which contributions re llocted to members ccounts (known s the contributions cycle). During this period, we cnnot process chnges which redirect contributions, redistribute existing investments or chnge nominted retirement ges. At other times, here re the timescles we im to meet: Redirections of contributions re usully processed in round 4 working dys. New instructions tke effect from the next contributions cycle. Redistributing existing ccounts should tke effect in bout 7 working dys. If you re in Lifestyle, chnges to your nominted retirement ge should tke effect in bout 7 working dys nd the trnsction will include your redirected contributions nd redistribution of your existing ccount. The Trustees nd the Compny cnnot be held lible for the dverse impct of mrket movements tht tke plce before chnges tke effect. Step 3 13

14 How well do we know you? Strt here By working through this decision tree, you will see if the strtegy tht the Trustees hve chosen for you is right. Most members will be trnsitioned into Lifestyle 11. When you re within 11 yers of your nominted retirement ge, your svings will be grdully switched from the Privte option into the Infltion-linked Annuity Trget option nd Csh. The Trustees hve chosen Lifestyle 11 s the defult investment strtegy becuse it provides blnce of long-term growth nd protection in the run up to retirement. Lifestyle There re 3 Lifestyle strtegies tht mnge your investments for you. In the erly yers your ccount is invested in the Privte option (equities, property, commodities nd emerging mrkets), which ims for long-term growth. Then, s you pproch your nominted retirement ge, your ccount is grdully switched into the Infltion-linked Annuity Trget option (infltion-linked gilts nd corporte bonds) nd Csh to help protect its vlue. Although Lifestyle 11 is the defult, there re 2 other strtegies to choose from: Lifestyle 6 nd Lifestyle 16, which strt the switching when you re within 6 nd 16 yers of your nominted retirement ge. Do you... Question: wnt to tke more risk for the potentil of higher returns? Question: feel tht the Trustees choice is right for you? Question: wnt to tke less risk to consolidte your svings sooner? Lifestyle 6 Your ccount will remin invested in the Privte option for longer nd won t strt switching into the Infltion-link Annuity Trget option nd Csh until you re within 6 yers of your nominted retirement ge, potentilly giving your svings more opportunity to grow. You my wnt to consider Lifestyle 6 if you ve not quite chieved your retirement svings gol, or hve other svings to rely on. But you need to be wre tht if the Privte option flls in vlue, you my not hve enough time to mke up for ny losses. Lifestyle 11 The most blnced of the 3 Lifestyle strtegies. Moving your ccount into protection options when you re within 11 yers of your nominted retirement ge is strtegy tht the Trustees consider pproprite for most members. But you should consider your own circumstnces to ensure it s right for you. Lifestyle 16 The most cutious strtegy strts to move your ccount from growth options into protection options much further from retirement. Whilst your svings will be protected from losing vlue for longer, switching out of the Privte option when you re within 16 yers of retirement could reduce the potentil for your svings to grow. This my be right for you if you ve chieved your retirement svings gol or wnt to tke more cutious pproch. 14

15 Question: Do you wnt to mnge how your ccount is invested? Yes! Freestyle The Freestyle strtegy gives you the freedom to choose your own mix of investments from the 12 options vilble. It s up to you if, or when, you move from growth options into protection options to reduce the chnces of your svings losing vlue. No. Question: Growing some or ll of your svings? Do you wnt to try nd outperform the mrket? Question: Protecting some or ll of your svings? Yes! There re 3 investment options designed to protect the purchsing power of your ccount closer to retirement or for very cutious investors: Infltion-linked Annuity Trget Fixed Annuity Trget Csh No. Active options Pssive options These im to bet benchmrk or index, like the FTSE100 or Dow Jones. (lso known s index-trckers) These im to trck the performnce of the mrket to reduce the risk of performing worse thn the mrket. They hve the potentil for higher returns but lso run the risk of under-performing. However, they don t im to bet the mrket even when the mrket flls. Your investment options Privte Diversified Growth Globl Equity Active Property Globl Equity Pssive Ethicl UK Equity Active Shrih UK Equity Pssive 15

16 Other Benefits Deth protection benefits If you die before drwing your pension, the Pln offers rnge of benefits for your fmily nd dependnts. If you die s n ctive member before your norml retirement dte A csh sum will be pyble, which will be the higher of: 3 x your deth benefit slry plus the vlue of your ccount (excluding ny AVCs, EDCs or trnsfers-in) on the dte you die; or 6 x your deth benefit slry. In either cse, the vlue of ny AVCs, EDCs or trnsfers-in re dded to the csh sum. The csh sum will be tx free s long s the vlue of ll csh sums from ll of your pension schemes is less thn the Lifetime Allownce. When pying csh sum, the Trustees will consider the informtion you give on your Expression of Wish form. For copy, go to They will lso decide if ny of the money should provide pensions for one or more of your dependnts insted of being pid s csh sum. Plese note tht if you tke some or ll of your ccount s tx-free csh or to buy benefits, but remin in the Pln, your deth benefits would be reduced to reflect this. If you die s deferred member but before you retire The Trustees will use your ccount to buy pension for your dependnts or to provide csh sum. However, if you were mde redundnt, remin unemployed nd die within 12 months of leving, you will still be covered for deth-in-service benefits, provided tht you keep your ccount in the Pln. If you die fter you retire If you die fter your pension hs strted, the benefits your dependnts receive will depend on the choices you mde t retirement. 16 Pyment of deth benefits The Trustees hve the discretion s to how your deth benefits re divided between your reltives, dependnts, legl personl representtives or nominted beneficiries. This wy, pyment cn be mde more quickly nd the benefits re unlikely to ttrct inheritnce tx. However, they will consider your wishes so you need to complete n Expression of Wish form nd return it to the Pensions Tem t the HR Delivery Centre. For copy, go to You lso need to keep it up to dte if your circumstnces chnge if you get mrried, register civil prtnership, seprte or divorce, or hve children. Even if you re unttched or do not hve children, you my hve fmily members or close friends you would wnt to benefit. Leving benefits If you stop being n ctive member of the Pln either becuse you leve Siemens or opt out, provided you hve t lest 3 months pensionble service in the Pln, you hve the following 2 choices. You cn either: Leve your benefits in the Pln You cn leve your ccount in the Pln until you retire. This is known s deferring your benefits. You cn keep the sme investments, or you cn switch your ccount into ny of the other investment strtegies. You cn do this t ny time between leving the Pln nd retiring. If you hve deferred benefits, you cn still retire erly with the Trustees consent. When you retire, you use your ccount to buy your choice of retirement benefits. OR Trnsfer your benefits out of the Pln Alterntively, if you hve more thn 1 yer before your norml retirement dte (or if you re within 6 months of hving left pensionble service), you cn trnsfer the vlue of your ccount to new employer s scheme or personl pension scheme. Members with less thn 3 months pensionble service who re not in My choice will utomticlly receive refund. Opting out of the Investor Pln New employees re enrolled utomticlly, but you cn opt out t ny time by giving 3 cler months written notice to the Trustees. We recommend tht you tke independent finncil dvice before deciding to opt out s you would be giving up vluble benefits, including life cover. If you wnt to rejoin, this would require the consent of the Compny nd the Trustees nd you my hve to provide stisfctory medicl evidence. Wht if......you re temporrily bsent? If you go on pid fmily leve, you will py contributions bsed on your ctul remunertion. The Compny will py the blnce between your ctul contributions nd those you would hve mde bsed on your contribution rte t the dte you stopped working nd the pensionble slry you received before this period of bsence. It will lso py mtching contributions up to 10%, bsed on the pensionble slry you received before your period of bsence, in the norml wy. The overll effect is tht the totl mount credited to your ccount will remin wht it would hve been if you hd not been bsent. If you go on unpid leve you will not be regrded s being in pensionble service. However, when you return to work, the employer my llow you to mke up your contributions for your period of bsence. In tht event, the employer will py mtching contributions....you work prt time? You still receive the full rnge of Pln benefits nd contributions re bsed on percentge of your ctul pensionble slry....you wnt to trnsfer benefits into the Pln? You my be ble to trnsfer in benefits from previous employer s pension

17 scheme or from personl pension. To find out more, contct the Pensions Tem t the HR Delivery Centre....you get divorced? Pension rights re normlly tken into ccount s prt of couple s ssets. There re number of options vilble to the court in deling with pension rights. We will comply with ny instructions from the court. If you need more pension informtion, plese contct the Pensions Tem t the HR Delivery Centre. If you re getting divorced or dissolving your civil prtnership you should updte your Expression of Wish form. For copy, go to you hve complint or concern? If your question cnnot be nswered by the Pensions Tem t the HR Delivery Centre, there is 2-stge forml process for resolving disputes. Stge 1: write to the Secretry to the Trustees: Pensions Tem HR Delivery Centre PO Box 575, Durhm DH1 9GX You will receive response within month. Stge 2: If you re not stisfied with the Secretry s decision, you cn write to the Trustees, cre of the Secretry t the bove ddress. You must write within 6 months of the Secretry s decision. Your complint will be considered t bord meeting nd these re held qurterly. You will receive letter following the meeting explining the outcome. So, when you cn expect response depends on when your complint is received. you wnt to tke your complint further? If you re not stisfied by the result of the internl procedure then there re 3 orgnistions tht cn help with ny questions or worries tht members hve bout their pension rrngements. The Pensions Advisory Service (TPAS) TPAS is vilble t ny time nd cn help members nd their beneficiries with ny questions bout pension scheme tht they my hve, or ny difficulty tht they hve filed to resolve with the trustees or dministrtors of tht scheme. You cn contct TPAS t: 11 Belgrve Rod, London SW1V 1RB Phone: Emil: enquiries@pensionsdvisoryservice.org.uk Website: The Pensions Ombudsmn The Pensions Ombudsmn cn settle complints of mldministrtion or dispute the fct of lw in reltion to n occuptionl pension scheme. In norml circumstnces, the Pensions Ombudsmn will only intervene once the internl dispute hs been completed. You cn contct the Pensions Ombudsmn t: 11 Belgrve Rod, London SW1V 1RB Phone: Emil: enquiries@pensions-ombudsmn.org.uk Website: The Pensions Regultor The Pensions Regultor regultes UK work-bsed pension schemes. It ims to protect the benefits tht members build up in work-bsed schemes, personl pension schemes (where the employer contributes) nd stkeholder pension schemes. It ims to reduce the risk of situtions rising where compenstion from the Pension Protection Fund would be pyble. It lso works to promote the good dministrtion of work-bsed pension schemes. You cn contct the Regultor t: The Pensions Regultor Npier House, Trflgr Plce, Brighton BN1 4DW Phone: Emil: customersupport@thepensionsregultor. gov.uk Website: you wnt to re-join the Pln fter opting out? If you re n existing employee who did not join the Pln t your first opportunity, but now wish to do so, plese spek to your HR deprtment. 17

18 Glossry Annul Allownce The Annul Allownce is the mount your pension svings cn increse in vlue ech yer without incurring tx chrge. For the Investor Pln, the pensions svings tht will count towrds the Annul Allownce will be clculted s the contributions you nd the Compny hve mde to your investment ccount. The Annul Allownce is 255,000 for the 2010/11 tx yer, but will be reduced to 50,000 from April 2011 nd will remin t this level until 2015/16. AVCs nd EDCs lso count towrds the Annul Allownce. Any AVCs or EDCs, which together with ny other contributions, exceed the Annul Allownce will incur tx chrge. AVCs Additionl Voluntry Contributions (AVCs) re contributions you mke s well s your mtched contributions to the Investor Pln. They re strightforwrd, tx efficient nd cost effective wy to increse your pension benefits. However, your employer will not mke contribution to mtch your AVCs. Bonds These re form of IOU tht compny issues s certifictes for promise to py fixed sum (sometimes dependent on future infltion) t n greed point in the future. They work in the sme wy s lon: the compny borrows money from you, it pys you interest regulrly nd pys your money bck when the lon mtures. The regulr interest cn be t fixed rte, or linked to n index, for exmple the Retil Prices Index. Deth benefit slry This is your bsic fixed nnul py (excluding overtime) t dte of deth or leving pensionble service, if erlier, nd the bonus nd commission pyments received in the 12 months before dte of deth, or leving. Alterntively, it could be the sme clcultion in ny previous period of 12 consecutive months in the lst 10 yers, if tht produces higher mount. For members of My choice it lso includes n mount equl to the reduction in your py s result of the slry conversion process. EDCs If your employer prticiptes in My choice you cn increse the mount going into your ccount by the slry conversion process through Employee Directed Contributions (EDCs). You cn elect to py EDCs s prt of the My choice enrolment or renewl process. Equities Another word for shres. An equity is kind of unit of ownership nd it s wht you receive when you invest money directly in compny, like those listed on the London Stock Exchnge. Lifetime Allownce A limit on the totl vlue of pension benefits tht you cn build up without incurring tx chrge during your lifetime, including your Pln benefits nd benefits from other pension rrngements, except those from the Stte. When you tke ny benefits from the Pln, their vlue will be checked ginst your vilble Lifetime Allownce. The Lifetime Allownce is 1.8 million in the 2010/11 tx yer, but will be reduced to 1.5 million from April 2012 nd will remin t this level until 2015/16. Benefits built up bove the Lifetime Allownce cn only be tken s csh nd will be txed, currently t n overll rte of 55%. Minimum pension ge This is ge 55, unless you hve right to drw your benefits erlier thn 55 which is protected under tx legisltion. Nominted retirement ge If you choose to invest in the Lifestyle strtegy, this is the dte to which the Lifestyle investment strtegy is gered. Unless you tell the Trustees otherwise, it will be ssumed your nominted retirement ge is 65. Norml retirement dte This is the end of the month in which you rech ge 65. Pensionble slry Your bsic py (for members of My choice, excluding overtime) plus ny bonuses nd commission pid, plus n mount equl to the reduction in your py s result of the slry conversion process. Pensionble service Any continuous period in yers nd complete months during which you were n ctive member of the Investor Pln. Pensionble service ceses t norml retirement dte (or your erlier dte of leving or opting out of the Pln). 18

19 Finding out more Website The pensions website t is lwys the best plce to go for generl informtion bout the Pln. Once you ve joined the Investor Pln, you will need your enrolment number to log on for the first time. Logging onto the website lets you: browse your personl informtion obtin up-to-dte ccount vlues give instructions to mend your investment choices online mend your nominted retirement ge view previous investment performnce history use the My Plnner modelling tool to model vrious retirement scenrios, such s the bility to mend the percentge of tx-free csh you tke emil the Pensions Tem t the HR Delivery Centre vi the online Get in Touch pge Pensions Tem t the HR Delivery Centre Open from 9m to 5pm, Mondy to Fridy: Emil skhr.uk@siemens.com Post AskHR Delivery Centre PO Box 575 Durhm DH1 9GX Phone

20 Siemens Investor Pln Your complete guide to mking the most of your Siemens pension If you nee d dvice... IFA Pro motion cn pro indepe v ndent finnci ide contct d Visit th et l dvise eir web rs in yo ils of site t: ur re nbise d.co.u k Providing ty uri c se l i c finn re is u t u f r ou y r fo nt t r o p m i y ll vit