FUJIFILM ELECTRONIC IMAGING PENSION PLAN TRUSTEES' ANNUAL REPORT FOR THE YEAR ENDED 5 APRIL 2015

Transcription

1 FUJIFILM ELECTRONIC IMAGING PENSION PLAN TRUSTEES' ANNUAL REPORT FOR THE YEAR ENDED 5 APRIL 2015

2 Chairman s Statement On behalf of all the Trustees, I am pleased to present the Annual Report on the FUJIFILM Electronic Imaging Pension Plan (The Plan) for the year ended 5 April Scheme Funding The net assets of The Plan increased by million to million (including AVCs) in the twelve months ended 5 April Bearing in mind that expenditure from The Plan of predominantly payments to pensioners amounted to 1.81 million, the overall result is a good one, with The Plan s investments successfully tracking the market movements and indices that they are targeted to follow. Enclosed with this report is the Summary Funding Statement as at 5 April 2015 which provides an updated estimate of the projected liabilities of The Plan (ie the value of assets that the Trustees expect will be needed to pay all future benefits). In spite of the substantial growth in assets shown above, the liabilities have increased by a similar amount resulting in a small reduction in the surplus in the Plan from 0.7m as at 5 April 2014 to 0.1m as at 5 April Nevertheless, the Trustees see this as a good result given the large and volatile changes in both asset and liability values. The position continues to be volatile and is being carefully monitored by the Trustees who take a long term view before considering what action might be taken. Pension Protection Fund During the year, the Trustees monitored developments following the Olympic Airlines case. This case concerned the eligibility of the Olympic Airlines SA Pension & Life Insurance Scheme for protection from the Pension Protection Fund ( the PPF ) after its Greek sponsoring employer became insolvent. The PPF provides a minimum level of benefits to members where a pension plan s sponsoring employer is insolvent and the plan does not have sufficient assets to pay those benefits. Whilst these conditions were met in the Olympic Airlines case, the Olympic Airlines Scheme was still not eligible for PPF protection because its sponsoring employer did not meet the requirement of having a sufficient business presence in the UK. The Trustees challenged this through the courts, but were not successful. However, the Government has said that it was not the intention for schemes in this position not to benefit from the PPF and it subsequently changed the law so that members of the Olympic Airlines Scheme received PPF benefits. This change in the law is, however, not wide enough to ensure that all schemes in a similar position are eligible for PPF protection. The sponsoring employer of The Plan, FUJIFILM Europe BV, is FUJIFILM's European holding company and does not carry out business directly in the UK. This means that, following the Olympic Airlines case, The Plan is unlikely to be eligible for PPF protection. This should not be of immediate concern as FUJIFILM Europe BV is solvent and as at the year end The Plan had sufficient assets to match the benefits which would be paid by the PPF. The Trustees objective, of course, is to pay all members benefits in full. The Trustees have written to the Pensions Minister to highlight The Plan's position and have requested a change in the law to reflect the Government's intention that schemes such as The Plan should remain eligible for PPF protection. The Trustees would encourage any members who are minded to do so to bring this issue to the attention of their local MP as this might help to increase the profile and precipitate change. Pending a change, the Trustees are monitoring closely the financial position of FUJIFILM Europe BV and The Plan's ability to pay PPF level benefits. New Pension Freedoms New flexibilities for Defined Contribution (DC) pension schemes came into effect from April Individuals are now able to take all of their DC benefits from age 55 as a single lump sum, or a series

3 of lump sums, provided this is permitted by the scheme in question. Previously, most people had been required to use their funds to buy a pension from an insurance company. Most of the benefits that you hold within The Plan are Defined Benefit (DB). This is because the pension that you have earned in The Plan is linked to your pensionable salary and your pensionable service. The only exception is any Additional Voluntary Contributions (AVCs) that you may have paid into The Plan, which are DC in nature. As such, the changes do not directly affect your pension benefits within The Plan. Currently, when members start their Plan pension, there is an option to take up to 25% of its value as a one-off, tax free, lump sum. However, if you wish to use the value of your Plan benefits in a different way and take advantage of the new flexibilities, you must transfer your benefits out of the Plan to a DC plan you may request a transfer of just your AVC funds while leaving your other benefits in The Plan. Deciding whether transferring all your benefits or just your AVC benefits is in your best interests is complex and you should be aware that once a transfer is made it cannot be reversed. Where you wish to transfer DB benefits worth 30,000 or more, there is now a requirement for you to take independent financial advice before making the transfer. This 30,000 amount is the capital value of your pension benefits not the annual amount of your pension. The Trustees recommend you consider taking advice even where your benefits are worth less than this amount. The Trustees cannot advise you in relation to the transfer of your benefits from The Plan. You can find a register of independent financial advisers on the Government's Money Advice Service's website ( The Government has introduced a new free and impartial guidance service to help people understand the options for using their DC pension pot. The guidance can be accessed on the internet, via the Pension Wise website ( or, if you are over age 50, by telephone (from The Pensions Advisory Service), or face to face (from the Citizens Advice Bureau). You can make an appointment for telephone or face to face guidance by calling Pension Scams With the introduction of new flexibilities about how DC investment pension pots can be used, there has been an increase in the promotion of fraudulent and high risk investments. You can find information on the Pensions Advisory Service website which is designed to help you to avoid being scammed ( You should bear in mind that scams are becoming increasingly sophisticated and this is another reason why you should consider obtaining advice before making an important decision about how to use your retirement savings. Member Nominated Trustee election You will see from the enclosed letter that nominations are being sought for a suitable candidate to serve on the Board of Trustees as a member-nominated trustee (MNT). Members of The Plan are invited to put their names forward for this voluntary position, which is unpaid although expenses are reimbursed. Being an MNT can be very rewarding for someone motivated to apply the level of commitment and interest to this challenging role. Full details can be found in the enclosed letter and on The Plan s website, Change of address Finally, please contact our Administrators, Lane Clark and Peacock in the first instance if you change your address or have any queries about your pension within The Plan. Their address is at the end of this report. Addressing such letters to the Trustees may cause delay. Dave Arnold October 2015

4 Plan Accounts for the period ended 5 April 2015 Income and Expenditure for 12 months ended 5 April 2015 Net assets of The Plan at 5 April ,144,383 Income Contributions receivable 240,000 Other Income - Total Income 240,000 Expenditure Benefits payable 1,468,906 Payments in respect of leavers 187,559 Sundry Expenses 704 Investment Manager fees 159,069 Total Expenditure (1,816,238) Returns on Investments Investment income 417 Change in market value of investments during the year 15,122,671 Total Return on Investments 15,123,088 Net assets of The Plan at 5 April ,691,233 The net assets shown include Additional Voluntary Contributions of 919,265 which are invested with the Standard Life, Equitable Life and Phoenix Life.

5 Investment Report One of the Trustees responsibilities is to ensure the prudent management and investment of The Plan s assets. The day to day responsibility of investing the fund is delegated to a professional investment manager whom the Trustees monitor on a regular basis. The assets of The Plan, excluding AVCs, are invested in a unitised insurance policy with Legal & General Assurance (Pensions Management) Limited, part of the Legal & General Group, which is one of the largest financial institutions in the United Kingdom. They are invested within a separate equity portfolio and bond portfolio in line with the benchmarks and ranges set out in The Plan s investment strategy see following page. The Trustees maintain a Statement of Investment Principles as required under Section 35 of the Pensions Act The main purpose of the Statement is to set out details of the investment strategy which is to be followed, the Trustees investment objectives and their attitude to risk. The investment manager is required to comply with this Statement. A copy of the latest Statement is available on request. The portfolio of securities and cash underlying the units issued by Legal & General are held in the name of HSBC Global Investor Services, Citibank and Northern Trust who are responsible for the custody of the fund assets. They are regularly audited by external auditors.

6 The value of the units held under the Policy at the beginning and end of the reporting period, on a bid market price basis, were as follows: Asset Value and Distribution Investment Sector Fund Value and Distribution on 1 April 2014 Value and Distribution on 1 April 2015 Benchmark Distribution Control Ranges GBP % GBP % % % Global Equity 60:40 Index 15,871, ,290, Global Equity Fixed 60:40 GBP hdg 15,972, ,424, Global Emerging Markets Index 366, , World Emerging Markets Equ Ind 1,297, ,508, n/a - Total Equities 33,508, ,640, Active Corp bond All Stock 29,595, ,852, Real Fund 1,895, ,967, Real Fund 2,681, ,870, Real Fund 4,026, ,589, Total Bonds 38,199, ,280, Cash (charges invoiced) 246, , n/a n/a Total Assets 71,955, ,044, The unit prices for these valuations were based on market closing prices on the previous working day. The values shown include any activity that took place on the valuation days. 1st April 2014 and 2015 were the last weekly dealing dates before 5 April 2014 and 2015 respectively. Performance The time-weighted investment returns on The Plan s assets were as follows: Time-Weighted Returns to 31 March 2015 Last 12 Months Last Three Years Last Five Years Fund Index Fund Index Fund Index Investment Sector Fund % % % pa % pa % pa % pa Global Equity 60:40 Index Global Equity Fixed 60:40 GBP Hgd Global Emerging Markets Index World Emerging Markets Equity Ind Total Equities Active Corp Bond-All Stocks n/a n/a n/a n/a 2025 Real Fund n/a n/a n/a n/a 2035 Real Fund n/a n/a n/a n/a 2045 Real Fund n/a n/a n/a n/a Total Bonds n/a n/a n/a n/a n/a Cash (charges invoices) Total Scheme n/a n/a n/a

7 Membership Statistics Details of the membership of The Plan as at 5 April 2015 are given below: Members with preserved benefits Pensioners Total membership Pension Increases During the year pensions in excess of the Guaranteed Minimum Pension were increased in line with the Retail Prices Index (up to a maximum of 5% pa), the rate payable for April 2014 was 3.2% 1. This was in line with the provisions of The Plan Rules. Pensions in respect of the Guaranteed Minimum Pension in payment were partly increased by The Plan and partly increased by the State, in accordance with statutory requirements. No discretionary increases were awarded in the year. Actuarial Statement The actuary to The Plan carried out the last formal actuarial valuation of The Plan as at 5 April The actuarial valuation indicated that the value of the assets on that date ( 72.2 million) was 0.7 million greater than the technical provisions ( 71.5 million), ie the statutory method of valuing a scheme's liabilities. This means that there was an ongoing funding surplus of 0.7 million as at 5 April A copy of the actuarial certification relating to the valuation is available on request. Schedule of Contributions Employer contributions were paid in accordance with the Schedule of Contributions, and the Rules of The Plan. FUJIFILM Europe BV (The Company) has paid deficit funding contributions of 40,000 per month up to September 2014 amounting to a total of 240,000 in financial year However, based on the results of the valuation as at 5 April 2014, The Company is no longer required to fund a recovery plan, and has decided to discontinue paying the above monthly funding contributions. The Company continues to pay the expenses of running The Plan. 1 The equivalent pension increase for 2015 was 2.3%.

8 The Trustees The following have served as Trustees during the year: David Arnold (Chairman) Brandon Cox Michael Hicks Graham Webb (Member Nominated) John Hemmings (Member Nominated) Advisors to the Scheme Investment Managers - Legal & General Assurance (Pensions Management) Ltd AVC Providers - Standard Life Assurance Society, Equitable Life Assurance Society and Phoenix Life Auditors - Ernst & Young LLP Solicitors - Dentons UKMEA LLP Actuaries - Lane Clark & Peacock LLP Bankers - HSBC Bank plc Administrators - Lane Clark & Peacock LLP 95 Wigmore Street London W1U 1QW Other Information If you change your address or have any queries about your pension within The Plan, please contact our Administrators, Lane Clark & Peacock LLP. Lane Clark & Peacock LLP (FFEI Pension Plan Administrators) 95 Wigmore Street London W1U 1QW - Team-Fujifilm@lcp.uk.com Copies of the full Report and Accounts, the most recent actuarial valuation and The Plan s Statement of Investment Principles are available and you may also request to see a copy of The Plan's Trust Deed and Rules. If you require further information about The Plan you should contact: The Trustees of the FUJIFILM Electronic Imaging Pension Plan PO Box 63 Knebworth Herts SG3 6WP - trustees@ffeipensionplan.co.uk