Saving for the future with Unilever

Transcription

1 Unilever UK Pension Fund Saving for the future with Unilever When you start a new job, one thing you re probably not thinking about is your retirement. However, a pension plan is one of the most valuable benefits a company can offer its employees and we d like to introduce you to ours. The Unilever arrangement is actually two plans in one: the Career average plan and the Investing plan. The Career average plan allows you to build up a defined benefit year by year with contributions from you and Unilever. If you want to add to those benefits, you can use the Investing plan to make extra contributions towards more pension or, with Unilever s consent, cash (currently tax-free) when you retire. You don t need to complete any forms to join because we enter you into the pension arrangement on the day you start at Unilever. We ll send you further details of the plans shortly afterwards. Finding out more You can read more about the plans on the website If you have any questions after reading this leaflet, please get in touch with us: Call our helpline on: Send an to: Write to: es.hrservicesuk@unileverhrservices.com 3 St James s Road Kingston-upon-Thames Surrey KT1 2BA

2 2 How the Career average plan works Building up pension Each year, you build up a pension of 1/60 of your pensionable earnings between two levels for that year. From 1 April 2014 the lower level is 5,828 and the higher level is 53,900. Pensionable earnings are generally your basic pay and any other fixed pay elements. You don t earn pension on earnings below 5,828 to allow for the State pension at retirement. The levels are reviewed each April. This yearly amount then increases each year in line with inflation up to a maximum of 5% until you leave pensionable service. Unilever pays contributions on any earnings above the higher level, which you can receive as a contribution into the Investing plan, or take as extra income (less deductions) with your salary. (See Unilever contribution on page 4.) Retiring Your pension is the total of each year s worth of pension added together. Once you start receiving it, your pension will increase each year in line with inflation up to 3%. To receive potentially higher increases to your pension when it comes into payment, you can choose a higher contribution rate. You will receive details about this after you join the Fund. Your normal retirement age is 65, but you may be able to retire early at any age from 55 onwards provided Unilever and the Trustees agree. Your pension will be reduced by a certain percentage for each year you retire early, to allow for it being paid for longer. Whatever age you retire, you will, with Unilever s consent, normally be able to exchange part of your pension for a cash sum (currently tax-free as long as it s within the limits set by HM Revenue & Customs).

3 3 Other valuable benefits The plan isn t just there for when you retire. No-one likes to think about the worst that could happen. But the plan provides life cover and pensions for your family should anything happen to you while you are at Unilever. Once you have been in the plan for five years, there are also benefits payable if you have to stop work early because of serious ill health. What it costs The contribution rate is just 5% of your pensionable earnings (between the two levels) each month. The real cost is less than this because of the tax relief that applies to pension contributions. As well as tax relief, there are also National Insurance savings because contributions are deducted through the Unilever Contribution Arrangement. Unilever pays an amount equal to the contributions you would otherwise have paid directly into the plan (instead of you paying them from your salary). You agree that your pay is reduced by the same amount. This allows you and Unilever to make National Insurance savings on the amount. When we enter you in the plan, you will automatically take part in the Unilever Contribution Arrangement, unless you choose not to (see below), or unless taking part in the Unilever Contribution Arrangement would reduce your gross pay to below minimum levels of pay required by law (in which case you will be unable to take part). If you don t take part in the Unilever Contribution Arrangement, you will pay contributions from your salary and will still benefit from the normal tax relief on pension contributions. If the Unilever Contribution Arrangement would reduce your gross pay to below a minimum annual amount, then it could affect some State benefits which depend on your paying a minimum level of National Insurance. If this applies to you then you can choose not to take part, by completing and returning the enclosed Unilever Contribution Arrangement opt-out form. Further details are in the plan guide you will receive when you join. So if you do not want to take part in the Unilever Contribution Arrangement but you are happy to join the plan, please complete and return the enclosed Unilever Contribution Arrangement opt-out form. Unilever meets all the costs of these plan benefits (not covered by member contributions through the Unilever Contribution Arrangement), along with the fees and expenses involved with running the plan.

4 4 How the Investing plan works Boosting your benefits Year by year, you ll be able to keep track of the pension you are building up in the Career average plan. You may decide that you want to add to this pension maybe you re joining Unilever mid-career and want to top up the benefits that your years to retirement will provide, or you could simply have special plans for when you give up work. You can boost your benefits by paying extra voluntary contributions above the normal 5% rate. These contributions will go into an Investing plan account for you. In addition, Unilever will match any extra voluntary contributions you elect to pay, up to 2% of your pensionable salary up to 49,000 (this figure is reviewed each year and may change in the future). Investing for the future You then decide how you want to invest your account over your working life from a range of investment options. The aim of investing is to grow your account to provide a good level of extra benefit when you retire. But remember, all investing involves some form of risk which is why financial products always carry warnings like your investment may go down as well as up. Over the years, you can make changes. As you near retirement, your attitude to risk is likely to change should you carry on growing your account, or focus on protecting the money you have built up already? Equally, you may want to vary the amount of extra contributions you pay from time to time. Unilever contribution If your pensionable earnings are above the higher level, Unilever will make 12.5% contributions based on those additional pensionable earnings that don t count towards your Career average plan pension. You normally have a choice about how you would like to receive this contribution: A contribution to an Investing plan account; or A cash payment paid to you with your salary but less deductions to take into account tax and National Insurance; or A combination of the two. If you would like a cash payment paid to you with your salary, you will need to complete the enclosed Contribution Election form and return it to the address on the form. Please note that if you make this choice, you cannot qualify for the 2% matched contribution (see Boosting your benefits left). Using your account When you retire, you use your account to buy additional benefits. It can provide extra pension or with Unilever s consent you can take some or all of the account as cash, currently tax-free (provided that the sum is within the HM Revenue & Customs tax allowances) before having to exchange any of your Career average plan pension.

5 5 It s your choice Because we feel saving for retirement is important, we enrol everyone starting at Unilever into the plan. You can opt out If you decide the plan is not for you, you need to complete, sign and return an opting-out form after you have started work at Unilever, and have joined the plan (that is, become an active member of the plan). Although you will join the plan on the day that you start work at Unilever, if you return this opt-out form, duly completed, within a month of your employment start date, then your membership will be cancelled with retroactive effect from your employment start date. (You can also opt out at a later stage if you so wish, but in that case your membership will stop when that opt out takes effect.) The opting-out form is available from the plan website or the Unilever Pensions Team. Call them on: Send an to: unileverpensionsteam@aonhewitt.com Write to: Unilever Pensions Team, Hewitt Associates Outsourcing Ltd, PO Box 1480, Hemel Hempstead HP1 9PB. You should think carefully before taking the decision to opt out, as it may mean that you will no longer be saving towards your retirement. You may also want to take independent financial advice before deciding. If you do not have a financial adviser, you can use the website to find one in your local area. In addition, there are a number of websites available that can provide you with guidance on pensions and saving for your retirement, such as The Pensions Advisory Service ( and the Government s website, You can change your mind If you opt out, you may choose to opt back in at any time. A joining form is available from the Enterprise Support HR Services on Please note that you may have to undergo a medical or give evidence you are in good health before re-joining, and Unilever reserves the right to restrict benefits if you re-join. We may have to enrol you again in the future anyway To make sure more people are saving towards their retirement, in 2012 the Government introduced new laws that give more people access to pensions through their workplace. This is the automatic enrolment legislation. In this legislation, the Government has specified a category of employees that we have to enrol automatically. In simple terms, we have to automatically enrol you into active membership of a pension plan which meets certain minimum standards set out in legislation if you: are at least 22 years old and under State pension age; and work, or ordinarily work, in the UK; and earn above 9,990* a year. * threshold this equates to 833 per month (if you are paid monthly) or 192 per week (if you are paid weekly). These thresholds are to be reviewed by the Government each tax year, and can be expected to change. There are also specific rules that apply to people that do not fit into the above category. So, if you re not an active member of the Career average plan in around three years time (or possibly sooner if you become eligible in the meantime), we may have to enrol you again automatically. We will send you information at the relevant time if this is relevant for you. You can still choose to opt out again, but do remember, it will mean that you may no longer be saving towards your retirement.

6 6 IMPORTANT NOTE INDIVIDUALS WITH ENHANCED PROTECTION OR FIXED PROTECTION If you have successfully applied for Enhanced Protection with effect from 6 April 2006 under the Finance Act 2004, or for Fixed Protection with effect from 6 April 2012 under the Finance Act 2011, you must consider the implications of joining the Unilever UK Pension Fund. As a new employee, you will be enrolled into the Unilever UK Pension Fund from your employment start date. However, if you do not immediately opt out, this could cause your protected status to be lost. It is therefore vital that, if you have elected for Enhanced Protection or Fixed Protection, you contact our Expert Administration team on ( expertadminteam@unilever.com) as soon as possible ideally, before your actual start date. If you wish to keep your protection, you will need to complete the opt-out form correctly and return it within one month of joining the Unilever UK Pension Fund to Enterprise Support HR Services. Pensions tax allowances and protection Please note that it is your responsibility to contact us about this. We will have no advance knowledge about your position against the tax allowances or whether or not you have protection. If you do not complete the opt-out form correctly and return it to Enterprise Support HR Services within 1 month (this period CANNOT be extended) of starting at Unilever, you should assume you will lose your protection and suffer a substantial financial loss. This leaflet outlines some of the main features of the plans it does not give you any rights to contributions or benefits. You can read more about the plans on the website If you join Unilever, and the pension plans, we will send you a pack, containing: The Career average plan guide Further details of plan benefits as well as other information you might need to know from the legal small print to how to find financial advice. The Investing plan guide The range of investments available, with background information about investing. SB4279