Your Pension Helping you plan ahead, whatever the future holds

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1 Your Pension Helping you plan ahead, whatever the future holds Inside this issue: Pension changes in 2010 that may affect you Preparing for retirement Accounts and investments Events Scheme overview Delivering the Local Government Pension Scheme locally

2 More changes ahead for the LGPS Welcome to this year s edition of Your Pension our annual newsletter to keep you up to date with changes to the Local Government Pension Scheme (LGPS) and other pensions issues. Once again in 2010, there are important changes being introduced to the LGPS Scheme. More details are in this booklet. Please read this section carefully. If you think that the changes may affect you and you want to know more, please contact us at the Norfolk Pension Fund. Our contact details are on the back of this booklet. 2 The Local Government Pension Scheme (LGPS) is a national pension scheme that is administered locally by 100 Pension Funds across England, Scotland and Wales. Your scheme is administered by the Norfolk Pension Fund, from our offices in Norwich. As at 31 March 2009, the Norfolk Pension Fund had 60,750 members and pensioners (5,609 more than the year before). Across England, the LGPS has 3.9m members and pensioners.

3 What will I get as a member of the Local Government Pension Scheme? The Local Government Pension Scheme is a very good, secure pension scheme, and will provide you with a regular income in retirement, plus other benefits. A pension for life, based on your final pay and years of membership, whatever happens in the financial markets The option of a lump sum when you retire Your pension will go up, in line with the cost of living (based on the Retail Price Index) Cover for your dependants (whether you die before or after you retire) Life cover a lump sum payment equal to 3 years pay if you die in service (and if you die in retirement we will still pay out a small lump sum if you haven t drawn a minimum amount of pension) You may be able to get your pension early if you have to retire through permanent ill health, or are made redundant. This is only a summary of the scheme benefits. You can find out more about the scheme in our scheme booklet, or on our new website You could also join us at one of our events or get in touch with us. More details about our events are in this booklet, and our contact details are on the back page. The amount of money that you will get when you draw your pension will be based on your years of membership and final pay, nothing else. It will not be affected by the performance of the investment market. Once you are receiving your pension, it will go up in line with the Retail Price Index (RPI). Your pension is guaranteed by the Government. 3

4 What has changed in the scheme since we last wrote to you? Here is a summary of recent scheme changes... The Local Government Pension Scheme (Miscellaneous) Regulations 2008 Statutory Instrument 2008:2425: This brought in a number of small changes to the scheme, for example that pension contributions need not be taken from pay received for keep in touch days worked during periods of maternity, paternity, adoption and parental leave. Other changes included making clearer who are eligible children (children who might get a pension if you die), allowing employers to increase membership, up to 6 months after a member leaves employment on the grounds of redundancy, and other changes to the payment of death grants. The Local Government Pension Scheme (Amendment) Regulations 2009 Statutory Instrument 2009:1025: The Government are looking at ways to make sure that the LGPS remains fair and affordable. This includes looking at cost sharing options, which might lead to changes in contribution rates for scheme members and employers. In order to look at cost sharing options in more detail, they are gathering data from all LGPS schemes to create a national model fund. This statutory instrument requires Pension Funds and employers to provide statistical data for the model fund. The results from the model should be known in late

5 These changes come into effect in The earliest age at which pension benefits are payable goes up from 50 to 55: From April 2010, the earliest age at which benefits can be paid (excluding ill-health retirements) is moving from age 50 to age 55. This covers people taking flexible retirement, early retirement with their employer s consent and redundancy retirements. If your official last day of service will be 1 April 2010 or later then you will need to be aged 55 or over to qualify for early payment of your LGPS benefits. Anyone whose last day of service is 31 March 2010 or earlier will only have to be aged 50 or over to qualify. If you are thinking about requesting flexible or early retirement, you should discuss this with your manager or HR department. Example: If your post was made redundant after 31 March 2010 and you were under age 55 at that time, you would not be able to take your LGPS benefits until age 60 at the earliest. Tax changes affecting high earners: This change affects members earning over 150,000 p.a. and is part of the tax changes being introduced from April There are restrictions on the amount of additional pension saving from 22 April 2009 so that members do not increase their pension contributions excessively ahead of the changes. From April 2010 there are changes to the income tax system which will see a new top rate of income tax of 50% for earnings over 150,000 p.a. and a reduction in personal allowances for those with incomes above 100,000 p.a. From April 2011 there will be a limitation of tax relief on pensions savings, meaning that those earning over 150,000 p.a. will not get full tax relief at their marginal rates as now. If you think that these changes affect you, you may wish to seek independent financial advice in order to find out exactly how you might be affected. 5

6 Dates for your diary The Norfolk Pension Fund runs a number of scheduled events each year. These are the dates for 2010: Pensions Committee 23 February 2010 Pension Clinics 15 and 16 March 2010 Annual Meeting 16 March 2010 Retired Members week April Pensions Committee 22 June 2010 Pensions Committee 21 September 2010 Details of the annual meeting and pension clinics are enclosed with this booklet. The Pensions Committee meets quarterly, if you would like to attend please contact us on February 2010 M T W T F S S

7 Want to know more about your pension? Come and talk to us Join us at the Fund s Pension Clinic, at our offices in the centre of Norwich in March, or for our Annual Meeting your invitation is enclosed. If you can t make it, don t worry contact us to make an appointment to come and see us another time. or we can come and talk to you All you need to do is get permission from work, find a suitable room and make sure that there are at least ten of you who wish to attend. Then simply ring us on and we ll take it from there. If you are a smaller organisation and haven t enough people, get in touch anyway. If there is enough interest, we will run an open seminar for mixed groups. Financial advice We are very happy to help you understand your pension and pension options, but we are not able to offer financial advice. If you need financial advice, you should contact an Independent Financial Adviser (an IFA ), regulated by the Financial Services Authority (FSA). You can find a list of 8 independent financial advisers in your area at 7

8 Are you preparing for retirement? Two-day pre-retirement courses are run each month to help members prepare for retirement. The course is aimed at people considering retiring in the next 18 months to two years. The course includes: Creating a new future and managing change Making the most of your retirement, leisure and learning opportunities Maintaining health and fitness, turning good intentions into reality Information about the Local Government Pension Scheme Investment options and where to get financial advice Opportunities in the voluntary sector Unison Retired Members Branch Courses are open to all scheme members and are run each month. Norfolk County Council (CTD) manage and run the courses. Please speak to your manager or contact Norfolk County Council (CTD) to find out more and to book this course. Norfolk County Council (CTD) Telephone: CTDtrainingmailbox@norfolk.gov.uk Pre-retirement course dates for early 2010 Tuesday 26 and Wednesday 27 January 2010 Monday 22 and Tuesday 23 February 2010 Tuesday 23 and Wednesday 24 March 2010 Nearly 200 people went on the pre-retirement training courses run by Norfolk County Council (CTD) in

9 Please tell us what you think We re very excited about our new website, which went live at the end of The new website is the start of a big project for the Pension Fund that in time will let you look at your pension details securely over the internet. We hope that the new-look website is easy to use and a useful source of information for you but only you can tell us that. Our main customer care standards To answer the telephone within 15 seconds, and to respond to telephone enquiries within three working days To respond to letters and faxes within five working days To respond to or text phone enquiries within three working days To meet visitors within five minutes of their appointment time When visiting, to agree a time in advance and show an identity card Please let us know what you think of the new website your feedback will help us help you! Thank you to the scheme members, employers and retired members who helped review the website before it went live. 9

10 Investments and accounts Here is a summary of the Norfolk Pension Fund accounts and investments. Accounts Our full accounts for 2009/10, and also our Statement of Investment Principles (which includes details of our Socially Responsible Investment and Corporate Governance Activities) are on our website: If you would like a paper copy, please contact us on s 000 s Opening net assets of the scheme 1,891,261 1,842,917 Employees contributions to the fund 25,032 28,056 Employers contributions to the fund 68,812 74,503 Transfer Values Received 14,866 10,930 Payments to pensioners and dependants -73,003-80,134 Transfers out and other payments to leavers -6,366-4,500 Advisor fees and general administration costs -1,959-2,000 Net investment return including income and the change in value of investments -75, ,393 Closing net assets of the scheme 1,842,917 1,476,379 10

11 Investments The Pension Fund s money was invested with eleven fund managers as at the 31 March We aim to have a mix of assets that provide a good return whilst managing the risk to the Fund in other words, we try not to put all our eggs in the same basket! Since 31 March 2009 we have replaced Aberdeen Asset Management as managers of our government and company bonds with Goldman Sachs and M&G. Like all schemes, the Norfolk Pension Fund lost a lot of money as a result of the problems in the financial markets and the recession last year. Since March 2009 bond and equity markets have recovered well. This is good news, but we still expect problems in the investment markets to continue for some time to come. This will not affect either your current or future benefits. As at 31 March 2009, the manager holdings were as follows: Standard Life Investments, Private Equity 4% Henderson Global Investors, Government and company bonds 10% Aberdeen Asset Management, Government and company bonds 11% HarbourVest Partners, Private Equity 2% Auriel Capital Management, Active currency 1% Goldman Sachs Asset Management, Active currency 1% Northern Trust Global Funds, Custodian bank 1% Fidelity Pensions Management, Shares in overseas companies 20% Baillie Gifford & Co, Shares in UK companies 11% Alliance Bernstein, Shares in UK companies 9% Capital International Limited, Shares in overseas companies 17% Aviva Investors (formerly Morley), Property 13% 11

12 12 Let s keep in touch... The Norfolk Pension Fund 4/5th floor Lawrence House General Enquiries 5 St Andrews Hill Norwich NR2 1AD Pension Administration Team Pensions Enquiries Fax pensions@norfolk.gov.uk Pensions Investment, Accountancy and Strategy Team Enquiries Fax doreen.metcalf@norfolk.gov.uk Check out our new website: If you would like this report in large print, audio, Braille, alternative format or in a different language please contact Doreen Metcalf on (minicom ). Printed on recycled paper using vegetable based inks NCCPFYP 2009 G /09 CB