Saint-Gobain Retirement Savings and Life Assurance Arrangements

Transcription

1 Saint-Gobain Retirement Savings and Life Assurance Arrangements Employee Guide January 2013

2 It is never too soon to start planning and saving for later life when you are no longer working and it is in your own best interest to save for your retirement. To assist you we have established the Saint-Gobain Retirement Savings Plan through the leading assurance company Standard Life and strongly encourage you to join the Plan. Under pension legislation that was introduced in October 2012 we are required to auto enrol all eligible employees into the Plan. We also operate a salary sacrifice arrangement which reduces the cost of contributing to the Plan by reducing the amount of National Insurance you pay. Whether or not you are in the Plan we also provide you with Life Assurance at our cost as we believe it is important that your dependants are provided for should you die whilst you are employed by us. This booklet explains what auto enrolment is, how the Plan and Salary Sacrifice works, the benefits of the Plan and details of the Life Assurance benefit. Contents: Auto Enrolment Saint-Gobain Retirement Savings Plan Salary Sacrifice Saint-Gobain Group Life Assurance Scheme 2 Introduction

3 Auto Enrolment What is Automatic Enrolment? Under the Automatic Enrolment pension legislation, we are required to provide a company sponsored retirement savings plan which meets certain standards and automatically enrol employees into the Plan if they are not already members of one of our plans. You are eligible for automatic enrolment if you:- Are not already a member of one of our company sponsored retirement savings plans Are aged over 22, but under state pension age Earn at least 9,440 a year ( a month) Work, or usually work, in the UK. If you are eligible, we are required to enrol you into our retirement savings plan and will do so in your third month of employment at the required minimum contribution rate. From March 2013 to September 2017 the minimum contribution rate is 1% of basic salary from you and 1% from us. Contributions from you and us will increase to 3% in October 2017 and to 4% in October Your contributions will be deducted from your pay using a salary sacrifice arrangement so that you pay less National Insurance. Salary Sacrifice is explained in detail on page 14 of this booklet. What if I am not eligible for Automatic Enrolment? We will continue to assess your situation and if anything changes, for example if you start to earn more than 9,440 a year ( a month), we ll automatically join you into the Retirement Savings Plan. If this happens, we ll write to you with more details. If you wish you can still choose to join the Retirement Savings Plan and we encourage you to do so. If you do decide to join you will benefit from contributions from us and tax benefits from the Government. May I contribute more than minimum? Yes and we would encourage you to do so. You should consider very carefully whether paying the minimum contribution will provide you with the lifestyle you want later in life when you stop working. Currently the basic state pension (excluding any Pension Credit or S2P/SERPS) is around 110 per week (about 160 for a couple) providing you have paid sufficient NI contributions during your working life. You need to decide whether that is likely to be enough to provide the lifestyle that you are hoping for in later life when you no longer work? Auto Enrolment 3

4 Auto Enrolment If you increase your contributions we will match your contribution as set out below. Your Contribution Company Contribution Life Assurance Cover 1% 1% 2x salary 2% 2% 2x salary 3% 3% 2x salary 4% or more 4%* 4x salary If you contribute 4% our contribution will increase to a minimum of 6% after 5 years service. If you decide to contribute more than 4% the maximum we will contribute is 4% (or 6% after 5 years service) unless we advise you otherwise in writing. What if I do not want to be auto enrolled or stay in the retirement savings plan? We are legally required to auto enrol you. However, you may if you wish opt-out within one month of joining and we will refund any contributions you have made. You cannot opt-out in advance of joining. You will receive a letter from Standard Life to confirm that you have been joined and explain the steps to take if you do not wish to stay in. You will have one month in which to do this from the date Standard Life write to you to confirm your membership has started - they will also tell you how to opt out in the letter. If you do choose to opt-out within this time, you will be treated as never being a member of the retirement savings plan. If you leave the Plan or stop contributing after the one month opt-out period has ended our contributions will stop and we cannot refund your contributions. However, all contributions that have been paid into the retirement savings plan will remain invested until you are permitted to take your retirement savings. We urge you to think very carefully and to seek independent financial advice before you take the decision to opt-out or to leave a retirement savings plan. Saving for later life when you are no longer working is very important and you would be giving up the contributions we make to the Retirement Savings Plan and the tax benefits from the Government. 4 Auto Enrolment

5 What if I opt out? Every three years we are required to reassess our workforce and automatically enrol eligible employees into a retirement savings plan again. This reassessment will take place again in March 2016 and every 3 years thereafter. If you are automatically enrolled again as a result of this reassessment, you will again be given one month to decide whether you want to stay in the Retirement Savings Plan. What if I opt-out and then wish to re-join? If you want to join again before the three year assessment you may do so at any time just contact the Payroll Team on Your assurance We are required to maintain your membership of a company sponsored retirement savings plan that meets the required standards. If your membership of such a plan ceases (and it is not because of something you do or fail to do) we must put you into another company sponsored retirement savings plan that meets the required standards straight away and we will do so. Further information Useful information on saving for later life may be found at Auto Enrolment 5

6 Saint-Gobain Retirement Savings Plan ( the Plan ) The Saint-Gobain Retirement Savings Plan is a defined contribution retirement savings plan sponsored by us and provided by Standard Life. If you select an employee contribution rate of at least 4% of your Pensionable Earnings, we will also contribute to the Plan as detailed in your letter of employment. This will be a minimum of 4% increasing to 6% after 5 years service. There are limits to the amount you can contribute, although these are unlikely to apply to most employees. Please see page 8 for more details. This guide describes the benefits that may be provided for you and your dependants as a member of the Plan. There is a full pack available from Standard Life which includes information about: How the Plan works and how to decide whether it is right for you Key Features and the Terms and Conditions for joining Further details on the funds available A Sample Illustration of Benefits. You can view this pack at Please contact Payroll on if you would like a paper copy of this pack. Your policy within the Plan is an individual personal retirement savings arrangement belonging to you. It is your Plan. Subject to the minimum contributions required by the auto enrolment legislation, you have control over your contributions how much is paid, how these payments are invested, when you take your retirement savings (subject to the age limits and restrictions set out in legislation) and the way in which your retirement savings are eventually turned into a retirement income (subject to the age limits and restrictions set out in legislation). This guide provides information not individual advice. If you are unsure about the suitability of the Plan for your personal circumstances, you must seek independent financial advice. You will be required to meet the cost of any chargeable advice you obtain. You can find an advisor in your local area at To join the Plan please complete the Authorisation Form and return it to: The Payroll Department, Saint-Gobain House, Binley Business Park, Coventry CV3 2TT. 6 Retirement Savings Plan

7 What does Retirement mean to you? Time to relax, having time to yourself No deadlines Having time to read the paper Having the choice to work or not Enjoy Longer holidays Time to start new hobbies What about the State Retirement Pension? Currently the basic state pension (excluding any Pension Credit or S2P/SERPS) is around 110 per week (about 160 for a couple) providing you have paid sufficient NI contributions during your working life. Is that likely to be enough to provide the lifestyle that you are hoping for in later life when you no longer work? How does the Saint-Gobain Retirement Savings Plan work? The contributions that you and we pay are invested in your Plan which is tax exempt so you do not pay tax on your contributions. Those contributions are then invested by Standard Life either into a default fund which we have chosen having taken investment advice or an investment fund or funds that you have chosen. You can have as much or as little involvement in selecting your funds as you wish. Further information is provided later in this guide. When you decide to take your retirement savings, the money in your Plan is used to provide your retirement benefits: A regular retirement benefit payable for life, which will be subject to income tax, with or without annual increases. An optional tax-free cash sum (currently up to 25% before age 75). An option for a spouse s or dependent s retirement benefit and protection for your dependants as they will receive the value of your Plan if you die before drawing retirement benefits. Income drawdown. When can I join? You can join if you are an employee (full or part time) of any wholly owned Saint-Gobain UK group company. Retirement Savings Plan 7

8 Saint-Gobain Retirement Savings Plan What about contributions? The details of the contributions that we will make to your Plan can be found in your Employment Offer Letter. Pension contributions are calculated as a percentage of your Pensionable Earnings which is your basic pay for contractual hours including regular shift allowance. It does not include overtime, performance or occasional bonus payments, allowances or other payments made from time to time. In case of doubt about what is included the decision of the Company shall be final. Your contributions will normally be automatically deducted from your pay using salary sacrifice, which is explained in detail in the next Section on page 14. If you are able to participate in salary sacrifice you will normally benefit from National Insurance and Income Tax savings. This means that the actual cost of your employee contribution rate is lower than it would otherwise be (as shown in the example below). You do not have to do anything to benefit from these savings as they will be managed by the Payroll Department. If for any reason you do not participate in salary sacrifice you will not benefit from the National Insurance savings but will normally continue to enjoy the tax savings. If you are a higher rate tax payer and are eligible for higher rate tax relief (and do not participate in Salary Sacrifice) you will need to claim any higher rate tax relief through your tax return. This is how salary sacrifice works:- We reduce your basic salary by an amount equal to the contribution rate you have selected. We pay your contribution into your Plan. We also pay our contribution into your Plan. For every 100 of your Pensionable Earnings, if you contribute 4%: You will have a salary reduction of 4.00 We will also contribute 4.00 Making a total contribution from us of 8.00 And you make total Income Tax and National Insurance savings of So for every 8.00 invested, it actually costs you The above example refers to a basic rate taxpayer. If you are a higher rate taxpayer then the 8 invested will cost you even less (the exact amount depending on your tax position). Are there limits to the amount that can be contributed and saved? Yes there are some limits set by HMRC, but they are unlikely to apply to most employees. The total employee and employer contributions to all retirement savings plans in your name must not exceed the prescribed limit (currently 50,000 per tax year). Subject to the above, the maximum personal contribution that will receive tax relief is the greater of 100% of earnings or 3,600 per year. 8 Retirement Savings Plan

9 If the total value of all your retirement benefits from all retirement savings plans in your name exceed the Lifetime Allowance (currently 1.5 million), the amount in excess of the allowance will be subject to a substantial tax charge when you take your retirement benefits. If you think that this could apply to you, you should seek independent financial advice. How are contributions invested? The Company is not allowed to offer financial or investment advice. How you choose the investments in your Plan will have an impact on the final amount of retirement savings you will accumulate. You may have as much or as little involvement in selecting your investment funds as you wish. You may not feel comfortable making investment decisions and if you do not make an alternative investment fund(s) selection you will invest in the Passive Plus III Strategic Lifestyle which, having taken financial advice, is the default fund we have chosen for participating employees. If you do wish to take a more active involvement in the investment decisions and decide on your own investment fund(s) then you can consult the Standard Life investment guide. This guide is available at We can provide a paper copy upon request. You can easily make changes to your investment funds in the future by calling or logging into Employeezone on the Standard Life website. What are the charges? Standard Life s normal charge would be 1% per annum of your accumulated fund value. However, for your Plan there is a reduced charge of 0.43% on your investment in the default fund whilst you remain an employee and 0.63% after you leave. In practice this is achieved by charging you 1% and providing a rebate of 0.57% with which Standard Life buy additional units in your fund(s). The charge, which is deducted directly from your fund each year, covers the cost of all investment and administration services provided by Standard Life. The majority of funds offered by Standard Life are available at the reduced charge of 0.4% per annum. However, you may choose to select from a wider range of specialist funds which, due to their sophistication or management by external investment houses, carry an additional charge. Full details of these funds and their additional charges are available from the Standard Life website. Retirement Savings Plan 9

10 Saint-Gobain Retirement Savings Plan When can I take my retirement savings? You can take your retirement benefits at any age between 55 and 75. You will need to contact Standard Life at least three months before you would like to take your retirement benefits and they will tell you what to do next. There is some flexibility in the way you can take benefits from your Plan: currently you can take up to 25% of the value of your fund as a tax-free lump sum before age 75. In the event of serious ill health, which is defined by HMRC as permanent incapacity, you may be able to take your retirement savings before the age of 55. In order to do so you will have to provide medical evidence to prove your permanent incapacity. What will I get when I take my retirement savings? The amount of retirement benefit you will receive at when you take your retirement savings is not guaranteed. When you choose to take your retirement savings, the amount of retirement income available to you (your annuity ) will depend on the final value of your Plan determined by: the amount of contributions paid into your Plan any transfers made to your Plan from previous retirement savings plans; and the investment returns (less charges) achieved on these monies. The retirement benefit you will receive is provided by using your investment (less up to 25% which you can take as a tax free lump sum) to purchase an Annuity. This is a particular type of insurance policy where an insurance company undertakes to pay you a regular amount (your retirement benefit) for the rest of your life. The level of retirement benefit your retirement savings may secure will vary over time and is affected by: the annuity rates available at the time you take your retirement benefit (e.g. the level of annual income payable for each 1,000 in your Plan); and the options you select for your annuity (e.g. increases in payment, or a continuing retirement benefit payable to your spouse on your death after retirement). At the time of purchasing your annuity, you will be able to select various options determining what will happen when you die whilst your retirement benefit is in payment. These options include ensuring that a percentage of your retirement benefit will be payable to your spouse if you die before her/him. The more options you add to your retirement benefit at the outset, the lower your initial retirement benefit will be. 10 Retirement Savings Plan

11 You can opt to take your annuity with Standard Life or you can review the annuity market in order to establish which provider will offer the highest annuity. It is advisable that you obtain an open market quotation before selecting your annuity as it is an important decision and one which will determine how much retirement benefit you receive for the rest of your life. Subject to certain conditions you may also have the option of flexible income drawdown. Flexible income drawdown provides the opportunity to withdraw as little or as much income from your retirement savings fund, as you choose and as and when need it. However, to be able to exercise this option you must be receiving a secure retirement benefit income of at least 20,000 a year, which may include your State pension, and have finished saving into retirement benefits. How do I know how my Plan is doing? Each year you will receive a benefit statement from Standard Life. This will show all monies invested by you and us on your behalf, together with the current value of your Plan. Any transfers made to your Plan will be included within the statement. You can also manage and obtain information about your retirement savings online via the Standard Life website or download their Phone App. You will be given details on how to do so once you have become a member. Alternatively, you can always call Standard Life to request information. What about Life Assurance? As an employee you are automatically covered by the Saint-Gobain Life Assurance Scheme. This is explained on page 16. What happens if I die? Through your estate your beneficiaries will receive the value of your retirement savings fund at the date of you death, in addition to any Life Assurance. What if I want to leave the Plan whilst still an employee? You can stop contributions to the Plan at any time by giving written notice to the Payroll Department. You will keep the entire value of your Plan. However, if you re an eligible employee under the auto enrolment legislation we will be required to auto enrol into the Plan at the appropriate time. If you re automatically enrolled as a result of this, you will be given one month to decide whether you want to stay in the Plan or opt-out. What if I leave my Employer? Our contributions will cease although you retain your Plan. You have the option to contribute personally or transfer the value of your fund to another approved retirement savings plan. You cannot cash in your Plan. Retirement Savings Plan 11

12 Saint-Gobain Retirement Savings Plan What if I go on Maternity Leave? As a result of the salary sacrifice arrangement your SMP in the first 6 weeks will reduce slightly although your net pay will still be slightly higher than it would have been without salary sacrifice. The same amount in total will continue to be paid into the Plan throughout the Maternity Leave (up to 52 weeks). If your pay excluding SMP is in excess of the PPL for a particular month or week, the salary sacrifice arrangement will be applied; otherwise we will make the contribution on your behalf. What about other temporary absences? For any period where you continue to be paid, contributions will be paid into your Plan whilst you are absent from work. If you take unpaid absence, you may make up any contributions missed, but our contributions for that period will not be paid. What are my responsibilities under the Plan? Whilst we pay the contributions on your behalf, you are responsible for ensuring that Standard Life has correct information about you. For example, you should inform them if you move home or change your name. Will I get a State Pension? Depending on your National Insurance contribution record, you may receive a pension from the State. This would normally be payable from State Pension Age. You are able to obtain a projection of your State Pension online by visiting or by completing form BR19 available from Post Offices. Your completed form should be sent to the Future Pension Service at Tyneview Park, Whitley Road, Newcastle upon Tyne, NE98 1BA. What if I already have a Personal Pension arrangement? Provided you do not exceed the overall contribution limits outlined previously, you may participate in more than one personal pension. We will not contribute to any other personal pension arrangements. May I transfer the value of other pension benefits I have into my Plan? You may be able to transfer the value of a previous pension plan to your Plan. For more information please contact Standard Life. Can the Company remove or change the Plan? We reserve the right to amend or withdraw the Plan at any time. What if I have a Complaint? If you have a general complaint or are dissatisfied with the handling of your pension by Standard Life please contact your Manager or HR Department in the first instance. 12 Retirement Savings Plan

13 Who can I contact about my Plan? Your Manager, HR Department or Payroll Department if you have any questions relating to our contributions. Standard Life for information about your Plan and to update your personal information once you have joined. Standard Life Website Member s Helpline for general queries and to change your details or fund selection once you have joined. them at corppen_service@standardiife.com or write to them at Corporate Pensions Standard Life House 30 Lothian Road Edinburgh EH1 2DH. Remember to include your policy or NI Number in any or letter. Payroll Joining Pack Request How to Join Return the Authorisation Form to: Payroll Department Saint-Gobain House Binley Business Park Coventry CV3 2TT or call payroll on Note: This document is a summary of our understanding of current legislation, which may change, and in the event of any inconsistency between this and Standard Life s policy documentation, the latter will apply. Retirement Savings Plan 13

14 Salary Sacrifice What is Salary Sacrifice? Salary sacrifice is an arrangement by which you benefit from both National Insurance and Income Tax savings on the contributions that you make to the Saint-Gobain Retirement Savings Plan. How does Salary Sacrifice work? You pay the minimum contribution or select a higher level if you wish. We then reduce your basic salary by an amount equal to the contribution rate you are require to contribute under auto enrolment or you have selected. We pay this amount directly into the Plan. We also pay our contribution into the Plan. So for every 100 of your Pensionable Earnings, if you contribute 4%: You will have a salary reduction of 4.00 Your employer will also pay 4.00 Making a total contribution from us of 8.00 And you make total National Insurance and Income Tax savings of This means that for every 8.00 invested, it actually costs you The above example refers to a basic rate taxpayer. If you are a higher rate taxpayer then the 8 invested will cost you even less (the exact amount depending on your tax position). We will keep a record of your salary before salary sacrifice which will be used for any pay related calculations (except SMP, please see page 12 of the Saint-Gobain Retirement Savings Plan Section of this booklet for details), such as pay reviews, overtime, shift pay, bonuses and life assurance, so they are not affected by this arrangement. Your salary before salary sacrifice will also be the amount used in any personal official letters issued by us on your behalf (e.g. mortgage letters, loan applications or job references). 14 Salary Sacrifice

15 Is salary sacrifice right for everyone? No, although the majority of employees will benefit from salary sacrifice there are some who may not for various reasons. These include: - Employees that earn less than the Primary Threshold ( 7,748 for the 2013/14 tax year) will not make any NI savings as they only start to make NI Contributions from this level. - Employees whose earnings are taken below the Lower Earning Limit ( 5,668 for the 2013/14 tax year) by this scheme in any month (or week) may see their State benefits (such as Statutory Sick Pay, incapacity benefit and Job Seekers Allowance) affected. We have introduced a Pay Protection Limit (PPL) ( 678 per month for the 2013/14 tax year) which will protect you against nearing either of these limits. If you earn below this level you will automatically not be included in salary sacrifice for that particular month (or week) to ensure that you are no worse off. In addition, although we do not pay below the National Minimum Wage there may be employees whose pay could fall below the NMW by participating in salary sacrifice and these employees will not be permitted to participate in salary sacrifice whenever that happens. If for any reason you are not able to participate in salary sacrifice you will not benefit from the National Insurance savings but will normally continue to enjoy the tax savings. If you are a higher rate tax payer and are eligible for higher rate tax relief (and do not participate in salary sacrifice) you will need to claim any higher rate tax relief through your tax return. What do I have to do to participate in salary sacrifice? You do not have to do anything to benefit from salary sacrifice. If you are either auto enrolled into or voluntarily join the Saint-Gobain Retirement Savings Plan, you will automatically participate in salary sacrifice and your participation will be managed by the Payroll Department. Can the Company remove or change the arrangement? We reserve the right to amend or withdraw the arrangement at any time. Who can I contact about Salary Sacrifice? The Payroll Department if you have any questions relating to the arrangement. Salary Sacrifice 15

16 Saint-Gobain Group Life Assurance Scheme What is the Saint-Gobain Group Life Assurance Scheme? The Saint-Gobain Group Life Assurance Scheme is a trust based lump sum death in service scheme currently insured through Canada Life. Saint-Gobain Limited is the Trustee of the Scheme. What benefits are provided by the Scheme? Upon commencement of employment you are automatically covered for lump sum death in service benefits of 2 x your basic salary. However, if you join the Saint-Gobain Retirement Savings Plan and contribute a minimum of 4% of your Pensionable Earnings, your lump sum death in service benefit will be increased to 4 x your Pensionable Earnings. Cover will be reduced back to 2 x basic salary if you stop contributing 4% of your Pensionable Earnings. Currently the lump sum death in service benefit will be provided up to the age of 75 so long as you remain employed by us. How are these benefits paid for? We pay the full cost of the insurance premiums for insuring these benefits. This is not treated as a benefit in kind so there is no cost to you. Are there any medical exclusions or conditions? There are not normally any medical exclusions and evidence of health is not required by the Insurer as benefits are covered automatically up to a certain level determined by the Insurer from time to time, If, however, your lump sum death in service benefit exceeds the level, or in such other circumstances as the Insurer may determine, you may be asked to provide evidence of good health, at no cost to you, before full cover is considered. Evidence of good health may also be required before cover is increased to 4 x Pensionable Earnings. We will notify you personally if you are required to provide evidence of good health. How is the lump sum death in service benefit paid? In the event of your death whilst a member of the Scheme, the death in service benefit will be paid by the Trustee for the benefit of one or more of your beneficiaries or your estate as the Trustee shall decide. You are required to complete an Expression of Wishes form to nominate the person or persons whom you would like to receive you death in service benefit and to keep the form up to date if your circumstances change. The Trustee will consider your wishes when deciding who is to receive your lump sum death benefit but your wishes are not binding on the Trustee. 16 Life Assurance

17 Is the lump sum death in service benefit taxable? Currently under HMRC rules the lump sum death in service benefit is not taxable if it is paid to a person or persons. It may be subject to Inheritance Tax if it is paid to a member s estate. Can the Company remove or change the Scheme? We reserve the right to amend or withdraw the Scheme at any time. Who can I contact about the Scheme? Your Manager or HR Department if you have any questions relating to the Scheme. Note: This document is a summary of Scheme and in the event of any inconsistency between this document and the Trust Deed and Rules which govern the Scheme, the Trust Deed and Rules shall take precedent and prevail. Life Assurance 17

18 This guide has been issued by the Saint-Gobain General Delegation for the UK, Ireland and South Africa for and on behalf of the following Employers Artex Limited BPB Limited BPB United Kingdom Limited Celotex Limited Glassolutions Saint-Gobain Limited Jewson Limited Saint-Gobain Limited Saint-Gobain Abrasives Limited Saint-Gobain Building Distribution Limited Saint-Gobain Glass UK Limited Saint-Gobain Ceramics & Plastics Limited Saint-Gobain Industrial Ceramics Limited Saint-Gobain PAM UK Limited Saint-Gobain Performance Plastics Corby Limited Saint-Gobain Performance Plastics Rencol Limited Saint-Gobain Performance Plastics Tygaflor Limited Saint-Gobain Solar Gard UK Ltd Saint-Gobain Weber Limited Vetrotech Saint-Gobain (International) AG Reference in the guide to Company, Employer, us or we means your employer. 18

19

20 Saint-Gobain Limited Saint-Gobain House Binley Business Park Coventry CV3 2TT