New contact details. How to protect your personal information

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1 pensions 2013 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND Welcome to our newsletter which focuses on the year to 31 March 2013 What s inside page Chairman s message 2 Protecting your personal information 2 AkzoNobel in the news 3 Financial summary 4 Investment focus during 2012/13 4 Meet the new Trustee Directors 5 Membership facts and figures 6 Taking care of your dependants 6 Finding out more about early retirement 6 Your questions answered 7 The Trustee 8 Help and information 8 New contact details We have recently changed our contact details and in future we can be reached at: Phone: iciscpf@towerswatson.com Alternatively, answers to most of our frequently asked questions can be found on our website at How to protect your personal information We know how important your personal information is and we are vigilant about keeping the information we have about you safe. To help you safeguard personal information relating to your pension, we have included some useful tips on page 2 of this newsletter and also on our website. Using your feedback Thank you to those who completed last year s survey. The data we received has been used to shape member communications going forward. This year we have thought carefully about delivering targeted content in Pensions Review to make sure that the information we convey is directly relevant to you. We understand that many of you prefer to receive paper copies of our communications rather than access them electronically, so we will continue to send you a printed copy of the newsletter each year. Whilst we will continue to issue a printed newsletter, those who prefer can elect to opt out of the paper version and view it online instead by visiting the website at We are always keen to hear how we can improve, so if you have any suggestions, please write or us using the contact details on the back page.

2 FOR 2 MEMBERS OF THE ICI SPECIALTY FOR MEMBERS CHEMICALS OF PENSION THE ICI SPECIALTY FUND CHEMICALS PENSION FUND2 Chairman s message Despite the current difficult financial times, the finances of the Fund are holding up reasonably well and we continue to benefit from the additional security measures introduced last year in the form of the AkzoNobel guarantee and improved arrangements for the letters of credit. As reported last year, ICI and AkzoNobel agreed in 2012, as part of new measures to increase the security of members benefits, a requirement that ICI arrange for letters of credit to be provided to the Fund on an ongoing basis. These letters can be called upon in certain circumstances (for example if ICI ever became insolvent) and would require the counterparty banks to pay enough cash into the Fund to ensure it was fully funded on a solvency basis (as assessed at the previous December). This year, this process led to a slight increase in the value of the letters of credit and one of the banks was changed because the previous bank no longer had an acceptable credit rating. Mike Smith, Chairman ICI Specialty Chemicals Pension Trustee Limited The interim review of the Fund s financial position showed a slight deterioration in the funding level (on an ongoing basis) from 94% to 92% over the year to 31 March This was due to a strengthening in the financial assumptions, reflecting market conditions, which was offset to some extent by a deficit contribution paid by ICI of 3.7 million, and better than assumed investment performance. The Fund s financial position and the need for any further deficit contributions from ICI will be fully investigated as part of the formal actuarial valuation due as at 31 March You can read more about the Fund s financial health in the enclosed Summary Funding Statement. There have been a few personnel changes over the past year. Adrian Dufton left the Board at the end of his term of office and I would like to thank him for his valuable service. Following our advertisement of Trustee Director vacancies earlier this year, we are pleased to welcome Nigel Cribb and Martyn Harrow to the Trustee Board. Nigel held a variety of financial roles in ICI Corporate, National Starch, Quest and Unilever from 1980 to 2008; Martyn held a number of IT and business systems positions in Quest, Unichema and Unilever from 1986 to We also say farewell to Eileen Haughey as head of the Trustee Board s support team and welcome to this role Heath Mottram, an investment and pensions professional with 26 years experience of advising on and directing strategy for some of the largest pension schemes in the UK. Protecting your personal information The Trustee and the administration team take great care in safeguarding your personal information, and we have a number of security protocols in place to make sure you are protected. Set out below is a list of the key things we will and will not do when talking to you about your pension, so that you can be confident that you are dealing with ICI Pensions Services: What we will do: If you phone our helpline, we will always ask you a number of questions to verify your identity before disclosing information to you and addressing any queries you may have. If we phone you back, we will always reference your earlier call. We will only accept changes to your personal details in writing, with your signature. What we will never do: We will never make an unsolicited phone call to you asking for personal information. If we need to contact you we will always write to you in the first instance. We will never you asking you for personal details especially not your bank details. Just as we do our best to protect your information, please ensure that you too remain vigilant against fraud. For more information on how to stay safe, visit for advice.

3 FOR MEMBERS OF THE ICI SPECIALITY CHEMICALS PENSION FUND 3 AkzoNobel in the news In our survey you told us you like reading about AkzoNobel, so we are continuing our series of articles containing more information on the AkzoNobel Group s financial position and recent business developments. Financial performance During the second quarter of 2013, revenues at AkzoNobel fell 4%, mainly due to divestments, such as the sale of the North American Decorative Paints business. The slowdown in global markets continues to affect their top line, and so the AkzoNobel Group is focussing on cost control and business efficiency. New strategic direction On 23 April 2012, Ton Büchner succeeded Hans Wijers as the new Chief Executive Officer (CEO) of AkzoNobel. After qualifying as a Civil Engineer, Ton s early working life was spent in the oil and gas construction industry across Europe and South East Asia until 1997, when he joined Swiss engineering group, Sulzer, as CEO. Ton s career has seen him live and work in the Netherlands, Singapore, Malaysia, China, Switzerland and the USA. In February this year, having spent some time touring the AkzoNobel group worldwide, Ton set out his strategy for taking the Group forward. This aims to increase return on capital, cash generation and margins. He has made improving financial performance the immediate priority for AkzoNobel. The new strategy focuses on end-user segments, operational excellence and sustainability and is summarised by the company s new vision: Leading market positions delivering leading performance. Ton explained: AkzoNobel has leading market positions and brands in paints, coatings and speciality chemicals. With our global scale and sustainability leadership, we will focus our strategy on customer service and operational excellence, creating value for all our stakeholders. Renewable materials AkzoNobel has signed a three-year agreement with Solvay to increase the use of renewable raw materials in its paints and coatings business. The agreement underlines their commitment to play a key role in sustainable development. North East builds new plant The past year has seen work get underway on a 100 million manufacturing plant in Ashington, which will become the heart of AkzoNobel s UK Decorative Paints operations. The move to Ashington reinforces AkzoNobel s commitment to ensuring that some of its most recognisable brands, such as Dulux, continue to be manufactured in the UK, with a particular focus on the North East of England where the company already has its Marine & Protective Coatings operations and a significant Research Development & Innovation centre based in Felling. The site, due to commence operations late next year, will halve AkzoNobel s environmental impact in the area, reducing energy consumption by 60% compared to current operations through cutting-edge manufacturing technology and the latest building design. ICI Specialty Chemicals and AkzoNobel s pension funds AkzoNobel has a number of pension schemes both in the UK and around the world. The ICI Specialty Chemicals Pension Fund is completely separate from any other AkzoNobel pension scheme you may read about and is unaffected by any changes made to these schemes.

4 4 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND Financial summary for the year 1 April 2012 to 31 March 2013 Value of Fund assets as at 31 March 2012: million Money coming in: m Contributions 5.4 Investment income 3.0 Money going out: m Benefits (pensions and lump sums) Payments to, and on account of, leavers -1.9 TOTAL INCOME 8.4m TOTAL EXPENDITURE -15.8m Investment focus during 2012/13 The investment strategy of the Fund has been, since 2010, to allocate the majority of the assets (currently 72%) to stable investments such as government bonds where cash flows closely match a proportion of the liabilities of the Fund. The balance is allocated to riskier assets with the aim of moderately increasing the return from the overall portfolio. The allocation to bonds, together with the use of derivatives, is designed to protect the Fund to some extent against changes in interest and inflation rates. The riskier assets are diversified across various asset classes including developed market equities, emerging market debt, currencies and equities, commercial long-lease property and (since the start of 2013) re-insurance bonds. Overall, the aim is for the return on the assets to be greater than the percentage increase in liabilities. This has been achieved for the one, three and five year periods ended 31 March More information on the investments and their performance can be found in the Summary Funding Statement or the Report of the Trustee and Financial Statements available on our website at The Fund s investment managers generally outperformed their benchmarks during the year to 31 March 2013, delivering an average return of 10.5%. Change in the Fund s assets: m Balance of income and expenditure -7.4 Change in market value 41.9 TOTAL CHANGE IN THE FUND 34.5m Liability matching assets Overseas equities UK equities Emerging market securities/ high alpha bonds Leveraged loans Property Reinsurance 1.3% 3.0% 3.0% 3.0% 8.5% Value of Fund assets as at 31 March 2013: million 9.2% These figures have been extracted from the Fund s Financial Statements for the period ended 31 March 2013, on which an unqualified audit opinion has been given by KPMG LLP. You can find more detailed financial information about the Fund by downloading the Report of the Trustee and Financial Statements available from our website These figures have been extracted from the Report of the Trustee and Financial Statements for the year ended 31 March %

5 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND 5 Meet the new Trustee Directors Nigel Cribb Martyn Harrow What attracted you to the role of Trustee Director? As Group Financial Controller of ICI, I was responsible for the financial reporting of ICI s pension funds in its financial statements and so developed an interest in the Fund. On leaving ICI, I joined SABMiller and became a member of the Governance Committee of its US pension schemes (which is the US equivalent of being a trustee in the UK) and enjoyed this role. When I left SABMiller I was then interested in the possibility of becoming more closely involved in the governance of a UK pension fund and so decided to apply to become a Trustee Director. Nigel Cribb, (Director) Investment Committee What attracted you to the role of Trustee Director? I still feel a deep association with my ex-colleagues and friends in ICI and Unilever. That period of my life and career was very special to me. I believe the role of a pension trustee is very important and needs to be done well. I thought my experience and background would enable me to make a useful contribution. What skills do you bring tell us about your background? I like to think that I bring a rather different background to my other Trustee Director colleagues; and this should be a strength, when combined with their amazing skills and expertise. Martyn Harrow, (Member Nominated Director) Administration and Appeals Committee What skills do you bring tell us about your background? Most of my career has been in the finance function, first in Unilever and then in ICI (including roles in both Quest and National Starch) so I have developed a broad range of financial and management skills, which I hope will help me in the Trustee Director role. I have also acquired more specific pensions skills: understanding the various methods for valuing pension liabilities and in investment management. What are the everyday issues affecting the Investment Committee and how do you contribute? Work in the investment committee is centred around ensuring that we have the right investment strategy in place and then monitoring how our investments and investment managers are performing. I hope to be able to contribute by applying my financial and pensions skills and provide fresh thinking and challenge to our work. What do you like to do in your spare time? I particularly enjoy exploring the canals of England on my narrowboat, Elsie May, which I moor near Rugby. I am also an enthusiastic long distance walker and this summer completed the Tour du Mont Blanc over 10 days. More specifically, I ve had significant financial responsibilities throughout my career. This includes my role as chief executive and the only executive trustee of a large education charity, where the sustained effective and prudent management of our financial resources is fundamental. I have also run a successful business of my own. My original degree in mathematics and statistics is also a sound underpinning. What are the everyday issues affecting the Administration and Appeals Committee and how do you contribute? My role is to support the chair of the Administration and Appeals Committee in taking its important work forward; and to bring to our deliberations all the constructive, help, input and thinking that I can. The Committee has a crucial role in ensuring the efficient and effective operation of the Fund and its interaction with members and beneficiaries. It has been a real eye opener in my early days to see how much is involved and how much business the committee handles. What do you like to do in your spare time? I enjoy spending time with my partner, friends and family, as we all do. I have a real passion for Formula 1 Grand Prix and am a lifelong rock music fan and still play when I can; my latest acquisition being an original black and white Rickenbacker guitar.

6 6 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND Membership facts and figures Change in membership of the Fund compared to 10 years ago This article shows how the Fund membership has changed over the last 10 years. The diagram below shows the numbers of Active members (those still contributing to the Fund), Deferred members (those who no longer contribute to the Fund but have benefits built up for retirement) and Pensioner members (those who are currently receiving benefits). The trend of declining membership continues, with the total membership reducing by 909 members compared to 10 years ago Total: 2,780 Taking care of your dependants As a member of the Fund, your family and dependants may be entitled to benefits when you pass away. Although it can be hard to think about, it is important to make sure your relatives and dependants know what benefits may be payable to them, for example a pension, and/or a lump-sum benefit if you re an active or deferred member of the Fund. Everyone wants the peace of mind of knowing that those they care about are looked after once they are gone and we have provided a page on our website to help dependants when a member has died. The most important thing for family and dependants to do is to let the Trustee know that a member has died; we need to know as quickly as possible so we can pay the right benefits to the right people at the right time. This also avoids the Fund having to reclaim any overpayments of benefits if the member is currently receiving a pension from the Fund. Amongst other things, a dependant s entitlement to benefits from the Fund will depend on their relationship to the member. It is also important that your wishes are known by the Trustee. You can let us know what you would like to happen by completing an Expression of wish form, available on our website Most pensioners benefit entitlements include a pension payable on their death to their spouse or civil partner and to any eligible children. Other dependants who are wholly or partly financially dependent on you at the date of your death may, in some cases, also be entitled to a pension from the Fund. Pensions for such dependants are only payable if you have nominated the dependant or at the discretion of the Trustee. In order to give the Trustee as much supporting information as possible, there are a few things that will need to be provided by your spouse, civil partner and/or your dependants at the relevant time. For spouses or civil partners, this includes the member s death certificate; the spouse s birth certificate; a Bank details form; and a declaration of continued marriage/civil partnership. Further information may be needed in the case of non-married partners and other dependants. You and your family can find more information on what to do on our website at 1, Total: 1, Pensioners Deferred members Active members Finding out more about early retirement Members receive their Fund pension from their Normal Retirement Date, which for most members is their 65th birthday. However, we understand that some members may be thinking about retiring early, so we d like to tell you about your options and where you can find more information. You can read more on page 7 about early retirement. Most members can choose to retire from age 55, or earlier on the grounds of ill health, depending on certain circumstances. If you choose to retire early, your pension will be reduced as it is likely you will receive it for longer. The amount of the reduction will depend on your individual circumstances and is calculated with reference to certain factors. The factors may change from time to time and therefore the amount of your early retirement pension may vary depending on when your pension is put into payment. For Deferred members, up to two early retirement quotations can be provided each year without charge. If you are thinking about taking your Fund pension early, you can ask for an early retirement quotation by contacting ICI Pensions Services (contact details on the back page).

7 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND 7 Your questions answered I m a pensioner when is my P60 issued? Your P60 is a statement issued to all tax payers annually. It is generally issued in the second week of April each year and will be sent to your home address. Who decides how much tax is taken from my pension? When a new pension is set up we apply the emergency tax code. From this point onwards we act on the instruction of HM Revenue & Customs only. How do I update my bank and address details? To let us know the bank or building society account you would like your pension payments made to, please complete a Bank details form, available on our website or from the administration team. If you need to update your personal information, you will need to contact the administration team in writing this is for your own security. You can download the relevant forms from our website at I am a deferred member and have not yet taken my pension. How can I find out the current pension amount due to me when I retire? You can request an update of your pension from the administration team. Your pension when you left ICI service will then be re-valued to the present day and this will be the current figure due at your Normal Retirement Date. I m no longer an active member do I need to update my Expression of wish form? Yes, it is very important that the you keep the Trustee up to date with any changes to your circumstances. This is easy to do you can either download a form from our website at or contact the administration team. I have been contacted about taking my pension early can I do so before age 55? You may have heard about pension liberation fraud which is on the increase in the UK. Under such arrangements, companies offer to help pension scheme members cash in their pensions early by transferring their benefits to another pension scheme. However they usually fail to explain the high costs and tax charges that are likely to be incurred, which would significantly reduce the value of members benefits. If you are contacted by an organisation making an offer to help you access your pension before you reach age 55 it could possibly be a case of pension liberation fraud. You can find out more about pension liberation fraud on The Pensions Regulator s website at How early can I take my pension? It is also worth remembering that there are circumstances in which the Fund can pay your pension before your Normal Retirement Date. For example you can take your pension early from age 55, or earlier on the grounds of ill heath, depending on certain circumstances. More details on early retirement are provided on page 6. Coming soon Pension legislation is constantly evolving and one of the planned changes is the introduction of a Single Tier State Pension. We expect to have more information about the impact of this change next year.

8 8 FOR MEMBERS OF THE ICI SPECIALTY CHEMICALS PENSION FUND The Trustee Help and information The ICI Specialty Chemicals Pension Fund website contains key information about the Fund and useful updates for members. You can find this at The contact details for the administration team are: Phone: from Monday to Friday The Trustees at work, from left to right: Richard Eden-Green, Nigel Cribb, Donny Hay (Law Debenture), Mike Smith (Chairman), Charles Morgan (Law Debenture), Alan Bate, Tony Atkinson and Martyn Harrow. The Trustee Board consists of seven Directors: three Member-Nominated Directors (MNDs) who are members of the Fund and applied for the role with membership support; three other Directors, appointed subject to the agreement of the Independent Trustee Director; and an Independent Trustee Director (The Law Debenture Pension Trust Corporation p.l.c.). The current Trustee Board comprises: Mike Smith, Chairman * Tony Atkinson, Director Alan Bate, MND * Nigel Cribb, Director * Richard Eden-Green, MND Martyn Harrow, MND The Law Debenture Pension Trust Corporation p.l.c. * (generally represented by Charles Morgan and/or Donny Hay) The Board uses the following committees to help in the running of the Fund: Administration and Appeals Committee * Investment Committee Secretary to the Board Pensions Secretariat Services Limited You can find more information on the Trustee at Write to: PO Box 545 Redhill, Surrey RH1 1YX Please keep us informed if your circumstances change, for example if you change address or change your marital status. Every effort has been made to ensure that the information contained in this newsletter is accurate. If there is any difference between this information and the Trust Deed and Rules, then the Trust Deed and Rules take priority.