Changes to the Pennon Group Defined Contribution Pension Scheme ( the Scheme ) from 1 April 2016

Transcription

1 Peninsula House, Rydon Lane, Exeter, Devon, England EX2 7HR Telephone Changes to the Pennon Group Defined Contribution Pension Scheme ( the Scheme ) from 1 April 2016 In summary : The Scheme will be administered by Legal & General (it has until now been administered by the Group Pensions team); The Scheme s investments will be managed by Legal & General (investments existing before 1 April 2016 are currently managed by Axa Wealth, and these will move to Legal & General in June, see below); Alongside the retirement options you already have in the Scheme, there will be an additional option to transfer your Pension Account at retirement to a separate vehicle (also with Legal & General) from which you can take your benefits flexibly (for example drawing money from it as and when you need it during your retirement); The Company s contributions into the Scheme will increased from 1 April 2016 by 0.15% a year of Pensionable Pay; An annual management and fund management charge will be taken from all members Pension Accounts with L&G each month to meet administration and investment costs of running members accounts. For members in the default investment strategy this is 0.25% of the Pension Account. This will apply to all members including current contributing members and former employees; and Your existing Pension Account will be moved from Axa Wealth to Legal & General during June 2016 (although the exact date may change). There will be no cost to you to move your Pension Account to Legal & General. The changes are necessary to help you to get the best value from your pension at retirement and give: Greater fairness in how charges are spread between contributing members and former employees Clearer visibility over your Pension Account as you save for retirement and more help planning for your retirement More choices when you come to draw your pension. Furthermore, the changes mean that the Scheme has been modernised reducing the need to make further changes in the foreseeable future. 1 Pennon Group Defined Contribution Pension Scheme

2 Next steps From 1 April 2016 A new Pension Account will be opened for you with Legal & General if you are contributing to the Scheme. If you are not currently contributing to the Scheme a new Pension Account will not automatically be opened for you, but you can choose to join. Contributions will be paid as normal into the Scheme at the rate effective 1 April 2016 that each member selected. If you participate in the Scheme through Smart Pensions you will continue to do so. Members contributions, and the Company s contributions, will be paid into each member s new Pension Account with Legal & General and will be invested in line with that member s existing investment choices. The Company will start to pay an extra 0.15% a year of Pensionable Pay into each member s Pension Account. This will happen automatically. Legal & General will provide each member with personal membership details. These will be sent to members home addresses in May or June. Following this, members will be able to manage their Pension Accounts online. From June 2016 Existing Pension Accounts will be moved from Axa Wealth to Legal & General in June 2016 (although please note that this timing may change). Members Pension Accounts will be invested in exactly the same funds before and after the move. There will be no cost to you to move your Pension Account. Members will then have a single Pension Account invested with Legal & General which will be made up of a member s existing Pension Account and future contributions. This Pension Account can be managed online. Legal & General will be running roadshows in April to tell you about the online access you can enjoy and some other tools that you can use to help you plan for your retirement. They will also tell you more about how you can use your Pension Account in retirement and the new vehicle that is available for you if you want to flexibly draw your Pension Account in retirement. We encourage you to attend one of the roadshows so that you can get the most out of the support that Legal & General will provide. A schedule of roadshows is included on pages 3 and 4. We have been working with Legal & General to plan a smooth transition of the Scheme s administration and investment management. We know that you are likely to have some more questions about the transition process and who to contact if you have any questions. We have included on pages 5 and 6 some common questions and answers that we expect you may have. If you have any questions about this letter, please contact the Group Pensions team E: pensions@pennon-group.co.uk T: A: Peninsula House, Rydon Lane, Exeter, Devon, EX2 7HR 2 Pennon Group Defined Contribution Pension Scheme

3 Timetable for roadshows Legal & General will be running roadshows over April 2016 to tell you about the support they will provide to help you plan for your retirement. You are encouraged to attend one of these roadshows. The schedule of roadshows is given below and on the next page. Further information will be provided for anyone who is not able to attend one of the roadshows in person. Please register to attend a roadshow by ing or calling the Group Pensions team (contact details can be found below). Date Times Location Thursday 14 April 10.00; 11.15; 13.00; Eden Room, Peninsula House Exeter, EX2 7HR Friday 15 April 10.00; 11.15; 13.00; Eden Room, Peninsula House Exeter, EX2 7HR Monday 18 April 10.30; 11.45; 13.30; Cedars Inn Bickington, Sticklepath, Barnstaple, Devon, EX31 2HE Monday 18 April 09.30; 10.45; 12.30; The Parkway Hotel & SPA Cwmbran Drive, Cwmbran, NP44 3UW Tuesday 19 April 09.45; 11.00; 13.15; Eden Room, Peninsula House Exeter, EX2 7HR Tuesday 19 April 10.00; 11.15; 13.00; Viridor Ardley ERF Middleton Stoney Road, Ardley, Oxfordshire, OX27 7PH Contact the Group Pensions team E: pensions@pennon-group.co.uk T: A: Peninsula House, Rydon Lane, Exeter, Devon, EX2 7HR 3 Pennon Group Defined Contribution Pension Scheme

4 Please register to attend a roadshow by ing or calling the Group Pensions team (contact details can be found below). Date Times Location Wednesday 20 April 10.30; 11.45; 13.30; Viridor, Room A Bolton Higher Swan Lane, Bolton, BL3 3AJ Wednesday 20 April 10.30; 11.45; 13.30; Viridor Pioneer House Wednesday 20 April 09.30; 10.45; 12.45; Future Inn, Plymouth Thursday 21 April 09.30; 10.45; 12.45; Tricky's, Cornwall Europoint Office Park, Strathclyde, ML1 4UF 1 William Prance Road, Plymouth, PL6 5ZD Tolgus Mount, Redruth, TR15 3TA Thursday 21 April 10.00; 11.15; 13.00; Viridor Ford Materials Recycling Facility Friday 22 April 11.00; Roadford Lake Monday 25 April 12.00; 13.15; Britannia Inn Education Centre, Ford Rd, Arundel, W Sussex, BN18 0FL Broadwoodwidger, Lifton, PL16 0RL St Austell Road, Par, PL24 2SL Tuesday 26 April 09.30; 10.45; 12.45; Exeter Racecourse Tuesday 26 April 10.00; 11.15; 13.00; Viridor Kennford, Exeter, EX6 7XS Wednesday 27 April 10.00; 11.15; 13.00; Viridor Salmon Pastures 42 Kings Hill Avenue, Kings Hill, West Mailing, Kent, ME19 4AJ Attercliffe Road, Sheffield, S Yorkshire, S4 7WT Contact the Group Pensions team E: pensions@pennon-group.co.uk T: A: Peninsula House, Rydon Lane, Exeter, Devon, EX2 7HR 4 Pennon Group Defined Contribution Pension Scheme

5 Supplementary information Some questions and answers We know you are likely to have questions about the transition process and who to contact whilst we move the Scheme s administration and investment management to Legal & General. We have answered some of the common questions that we expect you may have below. 1 Who do I contact from now on? From 1 April 2016 the Scheme will be administered by Legal & General. Therefore from 1 April, if you have any questions about your Pension Account or want to make changes to it you should contact the Legal & General helpline (see question 2). However, there will be a brief transition period while all existing pension Accounts are moved to Legal & General. This transition period is expected to run until the end of June During this transition period, depending on the nature of your query it may be dealt with by Legal & General and/or the Group Pensions team. You should contact Legal & General in the first instance. 2 How do I contact Legal & General? You will be provided with a dedicated helpline number and address for Legal & General at the roadshows. We will also publish these details on the Group Pensions website pensions.pennon-group.co.uk. 3 Who do I contact if I want to retire before my Pension Account is moved to Legal & General? If you are considering retiring in the next few months, you should contact the Pennon Group Pensions team in the normal way to find out your options. For retirements after July 2016, when all of the Pension Accounts are expected to have moved to Legal & General you will need to contact Legal & General. Please note that because members existing Pension Accounts are being moved in June the Trustee does not expect to be able to process any retirements during June. 4 What happens if I leave the Company before my Pension Account is moved to Legal & General? This depends on how much pensionable service you have within the Scheme. Broadly, if you: A. Have two or more years of pensionable service and / or have transferred benefits into the Scheme your Pension Account will remain in the Scheme and your existing Pension Account will be moved to Legal & General with everyone else s in June. B. Joined the Scheme before 1 October 2015 and have less than two years of pensionable service and you have not participated in Smart Pensions you will have a choice of transferring your benefits to another scheme or receiving a refund of your contributions. C. Are in any situation other than A or B above you will have to transfer your Pension Account out of the Scheme and in to an alternative pension arrangement. The Trustee will write to you to explain the options that you have. 5 Pennon Group Defined Contribution Pension Scheme

6 5 What happens if I die before my Pension Account is moved to Legal & General? Your benefits will be paid to your beneficiaries in the normal way. If you are a contributing member of the Scheme a cash sum equal to four times your Pensionable Pay at the date of your death will be paid to your beneficiaries. In addition, the value of your Pension Account will be paid as a lump sum and/or pension benefits and will allow for all your benefits in the Scheme. For clarity this will include the Pension Account you have built up before 31 March 2016 and new contributions from 1 April 2016 paid into your Pension Account with Legal & General. If you are not currently contributing to the Scheme a cash sum equal to your annual Pensionable Pay at date of death will be paid to your beneficiaries. If you have a deferred Pension Account in the Scheme, the value of this Pension Account will also be paid as a lump sum and/or pension benefits. The recipient of the above benefits is at the discretion of the Trustee. It is recommended that you complete an up to date Statement of Wishes to help the Trustee decide the most appropriate beneficiary for your death benefits. You can obtain a Statement of Wishes form from Legal & General. 6 Can I transfer my Pension Account out of the Scheme before it is moved to Legal & General? You can only transfer your Pension Account out of the Scheme if you are a deferred member of the Scheme. This means that this option is not available to you if you are currently contributing to the Scheme and want to continue to do so. Under the Scheme s rules, you cannot transfer part of your Pension Account out of the Scheme and leave some in the Scheme. Although there will be a brief transition period where part of your Pension Account (i.e. that built up to 31 March 2016) may be invested with Axa Wealth and part of your Pension Account (i.e. that built up from 1 April 2016) invested with Legal & General it still counts as a single Pension Account under the Scheme s Rules. So you are not able to transfer out the benefits built up to 31 March 2016, for example. You should contact the Group Pensions team if you have a deferred Pension Account and are considering transferring it to an alternative pension arrangement in the next few months. We recommend you seek independent financial advice before making such a decision. You can find an independent financial adviser in your area at 7 How do I find out more about the new vehicle that is available if I want to flexibly use my Pension Account in retirement? The new vehicle with Legal & General will be available from 1 April You will be able to use this new vehicle if you are age 55 or over and wish to draw from your Pension Account using some of the additional flexibilities that the Scheme does not provide. To do this you will need to transfer (with no charge or penalty) your Pension Account from the Scheme to the separate vehicle with Legal & General. We have negotiated special terms with Legal & General where the total charge for this vehicle is 0.7% a year of your Pension Account. Note that up until now if a member wanted to make use of the additional flexibilities they would have to transfer their Pension Account out of the Scheme to an alternative individual policy which they had to find themselves. Typically individual policies that provide this feature charge significantly more. For example compared to a charge of 1.3% a year of the invested Pension Account this could save you 600 a year on a 100k Pension Account at retirement. 8 Will there be a cost to me to move my Pension Account to Legal & General? No. Every invested in the Pension Account you have already built up that is currently managed by Axa Wealth will move to Legal & General. This move is expected to happen in June and you will not incur any costs for this move. Your Pension Account will continue to be invested in exactly the same way that it is now in line with your investment choices, but managed by Legal & General instead of Axa Wealth. 6 Pennon Group Defined Contribution Pension Scheme