FINAL GPP Pensions Q&A Additional Document 30/08/16

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1 FINAL GPP Pensions Q&A Additional Document 30/08/16

2 1. What % am I currently contributing? In the individual letter that you received w/c 08 August, on page 2 it states what you are currently contributing and what the Company is contributing. 2. If I am in salary sacrifice will this affect my state pension benefits in any way when I retire? No the way in which we have designed the scheme means that your state pension benefits will not be impacted when you retire 3. Why can t the employee % contribution be shown on pay slips? Good idea - this is something we will look into with payroll and see if we can introduce this. 4. Why is the company looking to replace Scottish Widows? We are reviewing the marketplace for the best provider and will select who we believe will offer the best service for the best value. Scottish Widows are included in this review.. 5. Will the decision to possibly replace Scottish Widows be made prior to the end of the consultation process? Yes it will. 6. Will the years service for the GPP commence from date joined GPP or date employment commenced? Date employment commenced 7. Death in service benefits for spouse can you nominate another family member (e.g. son / daughter if no spouse)? Yes if you are still employed by Booths your 3 times death benefits can go whoever you put down on your expression of wishes form. to

3 8. Is there a cap on the amount of pension contributions I can make? No however there are penalty tax charges that apply where you contribute more than the Annual Allowance this is a limit that varies by individual, but for most people this is 40,000 per annum. In saying that you can go back and use the last 3 year unutilised annual allowance should you need to. There are also lifetime allowances for individuals that set a limit on the total value of pension savings that can be built up (not just from your employment with Booths) without incurring additional tax charges to consider and for the tax year 2016/2017 the lifetime allowance is 1million. 9. I don t believe that I have received a pension statement this year, has this been missed or has this not been issued. These have been issued each year from Scottish windows; therefore please contact Scottish Widows on the below number to request a copy:- GPP (Scottish Widows) Tel: Lines are open Mon Fri 8am 6pm and Sat 9am 12:30pm 10. Will I lose my 5 years additional service pension contribution from the Company if the changes go through or will it be frozen? Yes you will lose the 5 years additional service entitlement as the additional service benefits will change to an extra 1% for 10, 15 and 20 years service. 11. Could I take my current GPP with Scottish Widows and move it to another provider? Yes you can. 12. What will happen to my GPP if I leave Booths and move to another Country You will cease contributing to the fund but your historical contributions will remain invested in the selected fund regardless of which country you live in.

4 13. What guarantee is there that I will get back the money I put into my GPP? There are no guarantees with regard to investment returns in the GPP. All of the risk with the returns rest with each individual. The investments held in your fund will fall and rise in value over time. The value of your investments when you retire will determine the amount of money that you get back from your pension. However neither Booths, nor the pension provider, can guarantee the amount of money that you will be able to get back. If you are concerned about the security of the pension provider, there are protections in place to help prevent the value of funds being lost should the insurance company experience any trouble. There is also external protection, such as the Financial Services Compensation Scheme that you may be able to claim against should the insurance company be unable to meet its payments. 14. Could the Company decrease the contributions they make in the future? It could be a possibility and will depend on how the Company is performing, however it is currently not our intention to change them again. 15. Can the Company afford the increase in Company contributions if every employee opts to contribute 7%? We have completed some financial calculations on the cost of contributions to the Company which we are comfortable with. We believe it is highly unlikely that everyone joining the GPP will want to contribute at 7%. 16. What happens to my GPP when I die? The value of your investment is paid out to whoever you put down on your expression of wishes form. 17. What is the tax relief for part time employees If you are paying tax then there will be tax relief on your pension contributions.

5 18. How much of the 1m pound saving comes from the GPP? It is estimated that 400k savings will come from the GPP 19. What compensation will be offered as a result of the reduction in the value of our benefits? We are not offering any compensation for the reduction in company contributions. We are seeking to offer all of our employees a more equitable pension benefit. 20. Where else has the Company made savings to help reduce/prevent the hit from its employee benefits? The Company completed a restructuring of the store management last year which resulted in significant savings being generated, in addition to a number of other cost savings initiatives that were driven centrally. however the company s performance is still deteriorating and we have cost pressures on the horizon with the living wage and that is why we are proposing to make these changes. 21. Are any of the savings going to fund the Final Pension Scheme? The Company has a legal obligation to support the final pension scheme but none of the current savings has been set aside for the final pension scheme. 22. There are levels of disparity in other areas of the business, such as medical insurance, holidays etc. If we are trying to achieve better equality will we look at these areas too? We are always looking at what we can do to ensure greater equality in the work force but yet at the same time we need to be able to continue to attract great candidates and compete with other employers which means at different levels we need to sometimes offer different salaries & benefits.

6 23. Why was this requirement not foreseen three years ago, as sales were starting to dip then and the discounters were rising? Three years ago we were not faced with the national living wage, the apprenticeship levy and food price deflation. In addition the rise of the discounters and the affect this would have on the retail environment was not predicted. 24. Why are 30 and 40 years service not recognised with a additional percentage contributions?? Offering additional percentage increases is a cost to the business. The Company has agreed to recognise 10, 15 & 20 years. 25. Do I have to pay tax on my pension when I retire? Yes. A pension is included as part of your taxable earnings. For tax year 2016/17 the standard personal allowance is 11,000. Any taxable earnings over this amount will be subject to tax. 26. What happens to my contributions in the GPP scheme if I am off sick or on another form of leave. For example maternity or paternity leave? You will continue to contribute at the agreed percentage rate of contribution if you are able, and the Company will match that rate up to 7% for both maternity and paternity. If your earnings are affected because of sickness and they are insufficient to make a contribution the Company will only match your contribution. 27. Can I pay lump sums into the GPP? You may be able to contribute lump sums to the GPP. This will be confirmed once the new provider is appointed. 28. Can I draw out lump sums from the GPP? Only when you reach minimum retirement age, currently age 55. The minimum pension age will increase to 57 by 2028 and is then set to rise in line with increases in the State Pension Age (remaining at 10 years below State Pension Age).

7 29. How are our contributions invested in the GPP? This will depend on the funds offered by the provider however we will ensure the funds offered are comprehensive but ultimately choice of funds to invest in is down to the individual. 30. Can I contribute over 40 years in the GPP? Yes. 31. What is a Default Lifestyle Strategy? It is an investment objective which aims to provide members with a balance of growth and capital preservation depending on age. It will probably be a fund that will be offered by the new pension provider. 32. What is the death in service benefit for GPP members? For all GPP members, regardless of when you joined, it is three times your annual salary. 33. Can I opt in and out of the GPP? If you opt out, you would need to re enter the auto enrollment scheme and if the proposed changes go through, you would need to be in that scheme for 5 years before you could re enter the GPP. 34. When can I change my GPP contributions Four times a year you can change your contributions in the first week of each quarter being April, July, October and January. 35. When do I qualify for a state pension? Unfortunately it is not straight forward for us to provide you with key information in this document as it does depend on your age. You can work out your exact state pension by using the state pension age calculator on the GOV.UK website

8 36. How many years of NI contributions do I need to make to qualify for a full state pension? Currently 35 years. 37. Could you show me an example of how salary sacrifice is calculated? We will be showing an example of sacrifice and how it works in the summary document which will be sent out. 38. Will I be any worse off from taking part in salary sacrifice? We have designed the salary sacrifice to protect members rights to all Company pay related benefits. The way in which other statutory benefits are calculated outside of the Company pay such as statutory maternity, paternity, adoption and sick benefits may alter but we will ensure you are no worse off and further information will be provided in due course. 39. If I earn below 9.00 an hour/ 11,500 in the 2016/17 tax year can I take part These thresholds are in place to make sure you are no worse off as a result of salary sacrifice and your rights to certain benefits are protected. Therefore you will not be able to participate if you earn below this level. 40. If I pay extra into my pension will this also be paid via salary sacrifice? With the current provider the answer is yes. However we will need to notify you of the answer to this question, once we have made a decision on the pension provider for the GPP scheme.

9 41. Will salary sacrifice affect my child care vouchers via salary sacrifice with Booths? If after both salary sacrifice values you are above 9.00 an hour and 11,500, you will take part in salary sacrifice and this will have no impact on your child care vouchers. For those at risk of being below these levels, you will not take part in salary sacrifice for pensions and we will be creating a separate document on salary sacrifice to assist with your understanding of how salary sacrifice works.. Also after the consultation process, we will write back to everyone to confirm what changes have been agreed and what it means for them before anything would be changed. We are aiming to issue the additional salary sacrifice document w/c 5 September 2016.