MERCER HARMONISE RETIREMENT INCOME SERVICE GUIDING YOU THROUGH YOUR RETIREMENT DECISIONS

Transcription

1 MERCER HARMONISE RETIREMENT INCOME SERVICE GUIDING YOU THROUGH YOUR RETIREMENT DECISIONS

2 MERCER HARMONISE WE RE HERE TO HELP We are all different, and although pensions are becoming more flexible, the extra choice can make it more difficult to make a decision on how to ensure the pension savings you have worked so hard for will support you through your retirement. This guide describes a range of products and services designed to help you do this by taking you through the choices available, including advice if you feel you need some help. 2

3 RETIREMENT INCOME SERVICE YOU education / learning / support advice no advice DECISION annuity drawdown 3

4 MERCER HARMONISE GETTING STARTED STEP 1: RESEARCH YOUR OPTIONS If you have not already done so, please visit your Zurich scheme website. The government s Pension Wise service can also be a useful source of additional information and guidance. If you wish to explore the option of encashing your plan then you should contact Zurich directly. STEP 2: DECIDE WHETHER ADVICE IS RIGHT FOR YOU We offer a range of advisory services designed to meet different requirements. If you are unsure of which type of advisory service to follow, we can explain the options to you. Need some advice? If you are not certain of the right decision, and would like help, you can choose from our range of advisory services. This includes a recommendation on what retirement income plans are suitable for you and will help you set up your plans. Know what you want to do? If you are confident about what you want to do and understand the features and risks of the option you are choosing, you can move ahead without taking advice. STEP 3: SELECT YOUR RETIREMENT OPTION Having gained some understanding of the choices and options available, you can select the service that best suits your requirements. If you need further help, please contact Zurich, either on your existing scheme helpline or on

5 RETIREMENT INCOME SERVICE THE SERVICES IN DETAIL The following is a summary of the services we offer. We can help with the pension plans that you may have built up over your working life. OUR FINANCIAL ADVISORY SERVICES Our range of advisory services are designed to meet differing levels of need and support at and through retirement. If you would like more details please contact Zurich, either on your existing scheme helpline or on If required, a member of our specialist team can call you back. Alternatively please visit the website at Retirement income advice This service is designed to provide you with advice in relation to your income needs throughout retirement. This service is typically most appropriate for small to moderate size pensions and typically up to 200,000. If your pension or combined pensions add up to more than this, an advisor will be available to help you. The service is provided by HUB Financial Solutions (HUB). HUB is a business focused on helping people make the most of their retirement savings. Advice includes annuity and drawdown where appropriate, has been uniquely designed for Mercer clients and is a staged process. Following a telephone discussion with a dedicated case handler, you will receive a personal recommendation on the use of your pension funds to meet your income needs throughout your retirement. If you are recommended to take drawdown, the advice will be restricted to the income drawdown option for the scheme, advising on the funds designed by Mercer and will not include a whole of market review. If a drawdown plan is recommended to provide income, you will be contacted annually by HUB to review your investments and check that the level of income you are taking remains sustainable. If your financial circumstances or your pension arrangements mean you need additional support, a longer discussion with an advisor can be arranged to help you evaluate your options. Full financial advice This level of service is designed for individuals who require more comprehensive financial advice, have a higher level of financial complexity and typically have larger funds in excess of 400,000. A Mercer Jelf Financial Planner will advise you on a broad range of pensions and investment options and the associated tax implications. You will have an initial consultation with a member of our team to discuss the range of advisory services that are available and decide what is suitable for your requirements. If the final recommendation is to purchase an annuity, this would be facilitated through HUB to ensure you get the best rate. If the advice is to set up an income drawdown plan then this will not be restricted to the drawdown plan for the scheme. 5

6 MERCER HARMONISE OUR NON-ADVISORY SERVICES Annuity Lifetime annuities provide a known regular income for life in exchange for your pension fund. This service is provided by HUB and is a comprehensive whole of market search designed to find you the best guaranteed income for life, taking into account personal factors such as your health, lifestyle, postcode and fund size. When taking this service, information will be sent to you that explains the options available to you. You will also be given access to online tools that may help you understand your potential retirement income based on actual annuity rates. Once you decide to proceed, you will then be provided with details of the leading annuities on offer at the time of the review. At any stage of the process, you will be able to call a helpline, where assistance will be on hand to answer any questions. You will also have a dedicated case handler throughout the process. Drawdown Drawdown allows you to receive income from your pension funds while continuing to keep the balance invested. This provides you with flexibility; however, there is a risk that you could run out of money or be unable to sustain your desired level of income. You will be able to set your income at a level and frequency that meet your requirements, including ad-hoc payments, and will have continued access to valuations and tools to help you monitor and manage your plan through your retirement. Your income drawdown plan choice will be limited to that available from the scheme only. You can choose from a range of investment funds designed by Mercer specifically for individuals seeking to drawdown on their pension fund or select from a wider range of funds from other investment managers once your plan has been established. The Zurich telephone helpline, provided at the end of this booklet, can help you set up your plan and co-ordinate all the paperwork. Throughout the life of your plan you will have access to telephone support to answer any questions. 6

7 RETIREMENT INCOME SERVICE CASE STUDIES PEOPLE LIKE YOU Here are some examples of how much these services may cost people with differing circumstances. In all cases, every charge due will be presented to you and agreed with you before any action is taken. PAM Pam, 65, had a main pension of 50,000 and another pension of 10,000 from a previous job. She wanted advice on how best to take benefits from her main pension and how to bring her pensions together. Pam did not need to take a large cash sum on retirement. Pam opted for retirement income advice, which gave her a recommendation about which types of plan were suitable for her, taking into account how much risk she was comfortable with taking and her income needs in retirement. The advisory service also included the consolidation of her pensions and the implementation of this advice. For Pam, the fee for this type of advice was a one-off payment of 600, which would be free of VAT and then 100 plus VAT for each annual review completed in respect of her drawdown plan. SHEILA Sheila, 58, had a workplace savings pension from which she wanted to take benefits without financial advice. She was interested in a drawdown policy and understood how drawdown works. With the help of the Mercer Harmonise Retirement Income Service, she was able to set up her drawdown arrangement. She had access to a dedicated telephone helpline to guide her through setting up the plan. The drawdown plan has an annual administration charge that is a percentage of the fund value, between 0.27% and 0.35% a year depending on asset size, as well as fund management charges that depend on investment choices. The charges will be deducted by the plan provider directly from Sheila s plan. For example, for a fund of 100,000, the charge could be

8 MERCER HARMONISE TOM Tom, a finance director, had a fund value in excess of 350,000 in a money purchase pension plan. He also had a pension linked to his final salary. Tom required full financial advice from a financial planner who could review the retirement market and take into account his overall personal financial circumstances before giving advice, implementing a plan and reviewing it annually. For this service, Tom was charged a fee of 1.95% of his invested assets, and he now pays a 0.75% charge from his assets for ongoing support through the retained wealth service of Mercer Jelf Financial Planning. In this case, Tom paid an initial fee of 6,825 and 2,625 for the first year s annual fee; VAT was not payable. JOE Joe had a 15,000 pension pot and wanted to convert this to an annuity to provide a guaranteed income for life. Joe wanted figures from the whole of the market and help in arranging the paperwork. HUB took into account Joe s personal circumstances, including some medical conditions he disclosed to them, which were high blood pressure and high cholesterol, for which he was taking medication. After a review of the market, Joe was offered enhanced annuity rates and he went ahead on this basis. For the guided annuity service, Joe was charged 420, 120 of which was subject to VAT. 8

9 RETIREMENT INCOME SERVICE FURTHER INFORMATION ON THE MERCER HARMONISE RETIREMENT INCOME SERVICE PROVIDERS At Mercer, we make a difference in the lives of more than 110 million people every day by advancing their health, wealth and careers. We re in the business of creating more secure and rewarding futures for our clients and their employees whether we re designing affordable health plans, assuring income for retirement or aligning workers with workforce needs. Using analysis and insights as catalysts for change, we anticipate and understand the individual impact of business decisions, now and in the future. We see people s current and future needs through a lens of innovation, and our holistic view, specialised expertise and deep analytical rigour underpin each and every idea and solution we offer. For more than 70 years, we ve turned our insights into actions, enabling people around the globe to live, work, and retire well. At Mercer, we say we Make Tomorrow, Today. HUB is a business with its roots in providing a solution for retiring pension scheme members. Just Retirement (Holdings) Ltd acquired HUB, formerly TOMAS, in October 2010, providing significant financial backing, although it remains an independent business. The platform and services have been developed over time and the Retirement Income Advice service has evolved from a deep understanding and analysis of the needs of retirees. Zurich is one of the world s largest and most experienced global insurers. Founded in 1872, and now with over 60,000 employees worldwide, Zurich has been delivering insurance products and services for over 140 years in more than 170 countries. Customers choose Zurich because they value their knowledge, expertise and stability. They trust Zurich to help them with their financial well-being up to and through retirement by providing solutions that meet their needs as well as giving great customer experience. 9

10 FIND OUT MORE We recommend you consider the government s Pension Wise service. You can look online at or you can book an appointment by calling If you are outside the UK, call This is a useful source of free information and guidance. CONTACT For more information on our range of retirement income and advice services, please visit: If you decide you do not want to take advice but want some more information on drawdown, please contact Zurich on RISK WARNINGS This guide does not contain regulated investment advice in respect of actions you should take. No investment decision should be made without consideration to your own circumstances and objectives. If you have any doubt regarding a particular service or solution, or if you are unsure about the risks involved in a given course of action, you should seek professional financial advice before proceeding. Information contained in this guide has been obtained from a range of third-party sources. While the information is believed to be reliable, Mercer has not sought to verify it independently. As such, Mercer makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential, or incidental damages) for any error, omission or inaccuracy in the data supplied by any third party. Past performance is not necessarily a guide to the future and the value of investments is not guaranteed and may fall as well as rise. If in doubt, you should speak to a qualified financial advisor. IMPORTANT NOTICES References to Mercer shall be construed to include Mercer LLC and/or its associated companies. This does not constitute an offer or a solicitation of an offer to buy or sell securities, commodities and/or any other financial instruments or products or constitute a solicitation on behalf of any of the investment managers, their affiliates, products or strategies that Mercer may evaluate or recommend. This contains confidential and proprietary information of Mercer and is intended for the exclusive use of the parties to whom it was provided by Mercer. Its content may not be modified, sold or otherwise provided, in whole or in part, to any other person or entity, without Mercer s prior written permission. Mercer Limited is registered in England and Wales under company number and has its registered office at 1 Tower Place West, Tower Place, London EC3R 5BU. Authorised and regulated by the Financial Conduct Authority Mercer LLC. All rights reserved MG