ReAssure Trustees Limited

Transcription

1 ReAssure Trustees Limited Windsr Huse, Telfrd Centre, TF3 4NB Telephne (0800) Fax: (0870) ReAssure Number Three Executive Pensin Plan Annual Gvernance Statement fr the Year 2017 This is the secnd year that I have prepared a statement as Chair f ReAssure Trustees Limited (previusly Admin Re Trustees Limited) n behalf f the Trustee Bard in respect f the ReAssure Number Three Executive Pensin Plan. This is in rder t cmply with the requirement f the Pensin Regulatr and in accrdance with Regulatin 23 f the Occupatinal Pensins Scheme (Scheme Administrin) Regulatins 1996 (The Regulatins ) which states that all mney purchase schemes must prduce an annual gvernance statement telling members hw gvernance standards have been met within this Scheme. This regulatin came int effect frm 6 April 2015 and the annual statement is based n when the Scheme Year End falls. Hwever, the ReAssure Number Three Executive Pensin Plan cmprises f 768 Principal Emplyers, all f whm have their wn Scheme Year End, therefre the annual statement is being based n Calendar Years. Zahir Fazal, Chair, ReAssure Trustees Limited REGISTERED OFFICE:WINDSOR HOUSE, TELFORD CENTRE, TF3 4NB. REGISTERED IN ENGLAND NO

2 Prepared in Accrdance with Regulatin 23 f the Occupatinal Pensins Schemes (Scheme Administratin) Regulatins 1996 (The Regulatins ) Intrductin Frm 6 April 2015, trustees f defined cntributin (DC) schemes like yurs, need t meet new requirements n gvernance standards, charge cntrls (subject t certain exceptins) and cmmunicating abut pensin flexibilities. The requirements include: appinting a chair f trustees wh signs the annual statement meeting certain gvernance standards and explaining this in an annual chair s statement, which include: that any default arrangements are designed in members interests and kept under regular review; that cre financial transactins are prcessed prmptly and accurately; that the value f charges and transactin csts brne by scheme members is reasnable; and that the trustee bard has the knwledge and understanding necessary t run the scheme prperly infrming members abut the increased range f ptins they have at retirement The requirement t prduce an annual statement is based n when the Scheme Year End falls. Hwever, the ReAssure Number Three Executive Pensin Plan cmprises f 768 Principal Emplyers, all f whm have their wn Scheme Year End, therefre the annual statement is being based n Calendar Years. This apprach has been discussed with The Pensins Regulatr and apprved by the Trustees n 28 January 2016.

3 Default Funds The Plan des nt ffer a specific default fund and there is n evidence f mney being placed int specific funds by default. This means that members had t make an active investment chice frm the range f funds available and were nt autmatically placed int a default fund. Investment Strategies Evidence has been prvided that the characteristics and net perfrmance f all the unitlinked funds are regularly reviewed by ReAssure s Bard Investment Cmmittee (BIC) t ensure that they are aligned with the interests f members. Their terms f reference include reviewing histric perfrmance figures, including vlatility f returns relative t benchmarks. The Fund Manager is HSBC Glbal Asset Management (HGAM). The investment strategy in place fr plicyhlder assets aims t utperfrm benchmarks ver the medium t lng-term, which is cnsidered as a perid f at least three years. Members can select funds frm a wide range available, which represent the majr asset classes. ReAssure allw members t switch funds free f charge, but fund switch vlumes are minimal. ReAssure has been taking actin t drive greater custmer engagement with fund selectin by making available richer infrmatin n funds and their risks and perfrmance (via Mrningstar) and making fund switches easier t d nline r by phne. 49 % f members mney is held in the diversified Balanced Fund. This cmprises apprximately 75% equities and invests acrss a wide range f asset types, industry sectrs and gegraphic areas. A further 22% f custmers mney is held in the UK All Cmpany Tracker fund, 13% in the UK Equity fund, 11% in the Glbal Equity fund, and the ther 18% acrss a range f funds including UK Fixed Interest fund, Defensive fund and in the Mney Market fund. The trustees have received quarterly data shwing the investment perfrmance f each underlying fund cmpared t the investment benchmark f its cnstituent assets. The average investment return (weighted by the ttal value f funds under management) has been abve benchmark ver the last five years but has underperfrmed ver shrter perids. ReAssure s BIC mnitrs perfrmance and we have seen evidence f actin being taken where medium-term underperfrmance has persisted. The Trustees will receive minutes and reprts f the BIC n a quarterly basis t ensure that apprpriate mnitring f investment perfrmance is nging. Overall, we have cncluded that the investment strategies are designed and executed in the interests f custmers and include clear statements f the funds aims and bjectives. Security f Assets Each member has their wn mney purchase pt int which mnies are paid. Each pt frms part f a fully insured fund(s) backed by ReAssure part f the Swiss Re grup. ReAssure is an authrised cmpany wh is a member f the Financial Services Cmpensatin Scheme (FSCS). The FSCS prtects cnsumers shuld an authrised financial firm ges bust. This means that in the event that ReAssure was unable t pay ut yur accumulated pt f mney, the FSCS can pay cmpensatin up t 100% f the claim amunt.

4 Transactins Prcessing We received management infrmatin and reprting frm ReAssure t cnfirm that imprtant financial transactins, such as receipt f cntributins, investment allcatins, charges and the payment f benefits, have been prcessed prmptly and accurately. ReAssure presented details f the gvernance framewrk in place t ensure apprpriate mnitring and versight. Plicy transactins n the system are prcessed in a timely manner accrding t Custmer Services service level agreements. Any breaches due t delays r incrrect administratin are lgged and dealt with in agreed timescales. The identificatin, tracking and rectificatin f issues is dne thrugh a well-gverned prcess, including the establishment f rt causes and trends t help prevent future breaches. This is managed by the Cmpliance functin with apprpriate mnitring and escalatin in place, as necessary. ReAssure advise us f any late payments made by emplyers in line with The Pensins Regulatr requirements. There has been n instance f late payment reprting made t the Trustees.

5 Charges and Transactin Csts The prduct charges fr existing cntributins t the ReAssure Number Three Executive Pensin Plan are: Bid/ffer spread f 5% Allcatin rates fr regular premiums between 65% and 102% Allcatin rates fr single premiums between 100% and 103% The prduct charges fr existing funds are: 1% annual management charge (n additinal transactin charges) A Lyalty Bnus is payable when taking retirement, early retirement r n death but nt n transfer. These are based n a percentage f the bid value f units 10 Years + 2% 15 Years + 3.5% 20 Years + 5% 25 Years + 6.5% 30 Years + 8% New cntributins where a member increases their premium Since the business transferred t ReAssure, where a custmer increases their existing cntributin, the new mnies get an allcatin rate f 100% with n bid ffer spread. Last year the Master Trust Bard reviewed the prduct charges assciated with the ReAssure Number Three Executive Pensin Plan, and identified sme areas where value fr mney shuld be imprved. We have wrked with ReAssure Limited and are pleased t annunce the fllwing: Charge Capping Yur plicy will be subject t a cap n nging charges n accumulatin units f 1%, including the bid ffer spread r similar explicit transactin csts incurred. This will be implemented in May 2017 and backdated t take effect frm 1 January Exit Charge Capping In additin, a 1% exit charge cap was intrduced n the 19 January 2017 fr custmers wh want t take r mve their benefits nce they reach 55 years f age. New Funds ReAssure have included details f three new funds available t yu in the annual statement they send yu. These funds have an Annual Management Charge f 0.65%, and n bid ffer spread. These funds d bear their wn investment expenses which vary ver time, the charges at present range between 0.06% and 0.09%.

6 Trustee Knwledge & Understanding ReAssure Trustees cmprises five members, the majrity f which (including the Chair) are independent. We act slely in the interests f members, with any ptential cnflicts f interest cnsidered, in accrdance with the cnflict f interest plicy, t ensure they d nt interfere with ur capacity t act independently f ReAssure. The trustees were carefully selected t ensure that, individually and cllectively, we have the apprpriate skills, knwledge and experience in relatin t acting as Trustees, t be able t execute ur duties, and assess and make judgements n trustee respnsibilities. Independent trustees were surced frm leading prfessinal services firms prviding such skills t the well-established Defined Benefit Pensin Scheme trustee market. An pen and transparent recruitment prcess was implemented, which invlved the Chair f trustees in the appintment f ther trustees, t ensure credibility and independence. Shrt Bigraphies fr each f the Trustees Zahir Fazal - Chair Zahir is a Chartered Accuntant and a Directr f BESTrustees plc. His current appintments cver a wide range f pensin schemes, bth defined benefit and defined cntributin, and diverse industry sectrs. He has several appintments as Chair f Trustees, is a trustee f a Master Trust and als Chairs tw Gvernance Cmmittees fr cntract based pensin arrangements. Giles Payne Giles has ver 25 years' experience in pensins, having wrked fr cnsultancies, an insurance cmpany, an asset manager and nw as an Independent Trustee. Giles chairs 5 schemes and wrks with anther fur investment sub-cmmittees. Befre jining HR Trustees, he wrked fr 10 years fr Legal & General Investment Management as a client manager, lking after a range f schemes cvering varius investment mandates, including bth defined benefit and defined cntributin. Andrew Parker Andrew is invlved in a number f pensin trustee bards f varying sizes and cmplexity, in bth defined benefit and defined cntributin areas. He chairs several f these trustee bards. He jined Law Debenture frm BT Grup where he was a spnsrnminated trustee directr f the BT Pensin Scheme (BTPS). Andrew is als a directr f Law Debenture Gvernance Services and leads the gvernance services practice acrss crprate and pensin trustee bards. Andrew is a slicitr by training. Paul Parsns Paul has wrked in Management and Executive psitins within the Custmer Services and Infrmatin Technlgy functins f ReAssure and ther grup cmpanies fr the past 30 years. During that time he has cntributed twards the implementatin f the key business administratin and system strategies f the Cmpany and played a key peratinal rle in histric business acquisitins and migratins Simn Thmlinsn Simn is an actuary and has ver 25 years f experience in financial services in bth mutual and prprietary rganisatins. He jined ReAssure in 2006 with the acquisitin f the GE Life grup f cmpanies, where he was respnsible fr the develpment f individual pensins business. He sat n the Trustee Bard f the defined benefit pensin scheme, with particular fcus n the terms n which schemes were merged.

7 The independent Trustees have cmpleted the Pensin Regulatr s tlkit and undertaken sufficient CPD t meet the requirements f the Assciatin f Prfessinal Pensins Trustees. The tw nn-independent trustees were selected t bring valuable in-depth ReAssure plicy -specific knwledge and understanding t the wrk f the Trustee Bard. They are bund t act in the interests f scheme members, in their capacity as trustees. Hwever, they will als be wrking thrugh The Pensins Regulatrs Trustee Tlkit training t ensure they have the latest knwledge arund their respnsibilities as trustees. Membership will be reviewed n a regular basis, t ensure that the independent trustees cntinue t be independent and the balance f expertise is apprpriate. Actin wuld be taken if it is cnsidered that any trustee has subsequently taken n ther respnsibilities that cmprmise their independence. Single fixed terms f n lnger than five years (with a cumulative maximum duratin f ten years if reappinted) ensure trustees cntinue t be able t challenge effectively. This satisfies the requirements t ensure current trustees have the apprpriate skills and expertise. ReAssure prvided gd supprt t the Trustee Bard during The Trustee Bard intends t build n this first year f activity and cntinue t serve its purpse and act in the interests f ReAssure s members f the Master Trust. On behalf f the trustees: Signature:... Title:... Date:...