Pension Transfer Analysis Report

Transcription

1 Pension Transfer Analysis Report Created for Ms Maxine Investor On 04 December 2018 By IFA Firm In respect of a transfer from DB Scheme Client Reference:AB123456C

2 Introduction This Pension Transfer Analysis Report can be used to assist you and your adviser in making a decision on whether to transfer your benefits from DB Scheme to the Novia SIPP. The report includes: > Summary of benefits > In the existing scheme > In the Novia SIPP > Benefit Comparisons > Transfer value comparison comparing the transfer value offered by your scheme to the capital value required to provide the same retirement benefits, calculated in accordance with the Financial Conduct Authority s rules > Pension comparison comparing your scheme pension to a potential annuity purchased from the capital accumulated in your Novia SIPP > Tax Free Cash and reduced pension comparison > Cash flow models showing how long your fund might last if you were to match the annual pension from your existing scheme by utilising Uncrystallised Funds Pension Lump Sums or Income Drawdown from the Novia SIPP > Death Benefits comparison > Death before retirement > Death after retirement > Pension Protection Fund Analysis - a breakdown of the benefits you might get if your existing scheme entered the Pension Protection Fund regime > Notes > Assumptions used > Data summary - a list of inputs that were used to generate the report The analysis contained within this report does not constitute a recommendation. Before recommending a course of action your adviser will consider many factors such as your personal circumstances, attitude to risk, marital status, tax position, and succession planning requirements. Different types of pension The Novia SIPP provides benefits on a Money Purchase basis, whereas DB Scheme is Defined Benefit. Defined Benefit (aka Final Salary ) schemes are occupational pension schemes in which you accrue benefits whilst you re employed. The pension you get will be based on your length of service and your salary. If you leave your employment before the scheme s retirement age, your pension entitlement will remain and will usually be increased up to retirement and also during payment to offset the effects of inflation. A defined benefit pension is payable for your entire life (and sometimes beyond, via a partner s pension). For that reason, it is considered a secure source of income. However, it is not guaranteed. The sponsoring employer is legally bound to maintain funding for the scheme so that it can continue to pay your benefits, but if the sponsoring employer were to become insolvent then it would no longer be able to maintain that funding. In this situation the Pension Protection Fund (PPF) could take over the scheme and continue to pay some pension benefits to you although it s important to note that this could be at a reduced rate, and payable only so far as the PPF has sufficient funding. If your defined benefit scheme includes a partner s pension then your partner can continue to receive pension benefits after your death, usually at a reduced rate. Money Purchase (aka Defined Contribution ) schemes give you a pot of money at retirement which you can use to provide pension benefits for yourself. Whilst you re working, you and your employer can pay into the scheme in order to build up the pot. The Novia SIPP is a self-invested scheme which means that you can decide (via your financial adviser/discretionary fund manager) how to invest your money. Prepared for Ms Maxine Investor Page 2 of 28 Prepared by Mrs IFA

3 Once you ve reached age 55 you can at any point decide to start taking benefits from the scheme, whether or not you ve retired from your job. You can designate all or part of the fund to drawdown and start making income withdrawals from it, or you can use all or part of it to purchase a Lifetime Annuity (a guaranteed pension for life) on the open market. If you choose drawdown, the money will remain invested in your chosen assets and you can choose how much pension income to draw from the fund. The more you withdraw, the sooner it will run out. When you die, any money left in your pension pot can be paid to anyone you choose. If you die before the age of 75 your beneficiary will receive this tax free, either as a lump sum or via an annuity or a drawdown. If you choose to buy a Lifetime Annuity you ll be exchanging your pot of money for a guaranteed annual pension entitlement for life. You can also buy a partner s pension so that your partner can continue to receive payments after you die. You can choose at what rate your pension increases while in payment. Assumptions The analysis within this report includes projections into the future, which means that assumptions are required. These assumptions include growth rates, annual pension (annuity) rates and inflation rates. Companies that provide reports like this one are regulated by the Financial Conduct Authority (FCA) who set out many of the assumptions that are to be used, which means that Transfer Value Analysis reports should be consistent in the use of assumptions for projecting into the future. The assumptions used are detailed in full in the Assumptions Used in the Report section, towards the back of this document. In terms of growth the FCA sets out three potential growth rates - Low, Intermediate (Mid) and High and you will find these throughout this report. Disclaimer This report has been produced by your financial adviser Mrs IFA using a reporting solution provided by Novia Financial and based on information provided by the administrators of your current scheme. Novia Financial cannot guarantee the accuracy of the report and accepts no liability for any errors in, or omissions from, the information provided or the interpretation of that information in the production of the report. This report does not make a recommendation for or against a transfer of benefits. This report has been produced in accordance with the assumptions set out in the FCA Conduct of Business Sourcebook. Prepared for Ms Maxine Investor Page 3 of 28 Prepared by Mrs IFA

4 Summary of Existing Scheme Benefits Retirement Benefits The pension benefits in DB Scheme may consist of a number of components that have different characteristics as regards timing, revaluation, escalation in payment and possibly subject to different legislation framework. The components used in this report are: Contracted Out Benefits (including Guaranteed Minimum Pension & S2P) Pension Component Amount p.a. As at Date ** GMP* benefits 6 April April 1997 Post 1997 Contracted-Out Rights 1, Date of Leaving 5, Date of Leaving GMP is only payable from state pension age. If you retire before this age, the scheme may pay a GMP Bridge pension. Other Scheme Pension Benefits Pension Component Amount p.a. As at Date ** Excess over GMP - Pre 97 Excess over GMP - Post 97 2, Date of Leaving 6, Date of Leaving Death Benefits Benefit type Amount As at Date ** Revaluation in Deferment Lump Sum Amount from Employer.00 Date of Leaving 0.00% Return of Member Contributions.00 Date of Leaving 0.00% Lump Sum multiple of Partner' Pension 0.00 Transfer Value The transfer value of 600, from DB Scheme was calculated on 20 November 2018 and is guaranteed until 17 December Tax Free Cash Scheme rules typically permit some pension to be exchanged for a tax free cash sum. DB Scheme uses a conversion factor of 15 for this. There are various restrictions on the amount that can be taken tax free as a lump sum when the pension benefits commence. The permitted maximum is the lower of: > 25% of the available Lifetime Allowance, assuming the standard lifetime allowance (SLA) > 25% of the capital value of the benefits being crystallised In a Defined Benefit arrangement, the capital value is typically calculated as 20 times the initial pension coming into payment. The tax free cash sum is also known as pension commencement lump sum (PCLS). There may be special arrangements for higher amounts of PCLS under various Protection rights, but this is not reflected in this analysis and you should discuss this with your adviser if this may apply to you. Prepared for Ms Maxine Investor Page 4 of 28 Prepared by Mrs IFA

5 Additional Voluntary Contributions If you have participated in an Additional Voluntary Contributions arrangement, there may be an addition to the Existing Scheme transfer value of 600, representing the accumulated AVCs. The AVCs could also be transferred, but as the AVCs are already invested in Money Purchase arrangement we have not included them in our analysis. You should contact your scheme administrator if you are unsure of the current position. Prepared for Ms Maxine Investor Page 5 of 28 Prepared by Mrs IFA

6 Summary of Novia SIPP Benefits Retirement Benefits The transfer value from DB Scheme can be invested in a range of investment funds, arranged by your adviser. The performance of your investments will affect the amount available to provide your pension benefits. You can take your benefits as a series of ad-hoc withdrawals, a regular drawdown income, or you can use your fund to purchase a Lifetime Annuity on the open market. Benefits can be taken from the Novia SIPP from age 55, whether or not you ve retired from your occupation. Death Benefits If you die whilst invested in the Novia SIPP, whether or not you ve started taking retirement benefits, any unused funds in your pot will be payable to your beneficiaries. You can nominate beneficiaries by completing a simple form. If you die before the age of 75 then your beneficiaries will receive the benefits tax free. Transfer Value The full value of your fund will be available for transfer from the Novia SIPP to any UK registered pension scheme. Tax Free Cash You can take some of your fund as tax free lump sum. There are restrictions on the amount that can be taken tax free when the pension benefits commence. The permitted maximum is the lower of: > 25% of the available Lifetime Allowance, assuming the standard lifetime allowance (SLA) > 25% of the capital value of the benefits being crystallised In the Novia SIPP the capital value is the value of the accumulated fund you re using to provide the benefits. The tax free cash sum is also known as pension commencement lump sum (PCLS). There may be special arrangements for higher amounts of PCLS under various Protection rights, but this is not reflected in this analysis. Prepared for Ms Maxine Investor Page 6 of 28 Prepared by Mrs IFA

7 Transfer Value Comparator The Transfer Value Comparator shows the transfer value offered by DB Scheme compared to the capital you would need to invest in today s terms to enable you to buy equivalent benefits to your existing scheme from the Novia SIPP. The capital difference provides an initial indication of the differences that you need to consider with your adviser before making a decision. The calculation uses the current annuity rate required to provide the same guaranteed income to your current scheme and may not be the same at your selected retirement age. Lifetime Annuity rates are for comparison purposes, and you do not have to purchase an annuity. Your adviser will be able to discuss the flexibility options that would be available to you if you decide to transfer to the Novia SIPP and explain the relevant risks. You have been offered a cash equivalent transfer value of 600, in exchange for you giving up any future claims to a pension from the scheme. Will I be better or worse off by transferring? We are required by the Financial Conduct Authority to provide an indication of what it might cost to replace your scheme benefits. We have done this by looking at the amount you might need to buy the same benefits from an insurer. It could cost you 945,621 to obtain a comparable level of income from an insurer. This means the same retirement income could cost you 345,621 more by transferring. 1,000, , , , , , , , , , , , ,000 Transfer value offered Estimated current replacement cost of your pension income See 'Notes' on the next page for a detailed explanation of this information. Prepared for Ms Maxine Investor Page 7 of 28 Prepared by Mrs IFA

8 Notes 1 The estimated replacement cost of your pension income is based on assumptions about the level of your scheme income at normal retirement age and the cost of replacing that income (including spouse s benefits) for an average healthy person using today s costs. 2 The estimated replacement value takes into account investment returns after any product charges that you might be expected to pay. 3 No allowance has been made for taxation or adviser charges prior to benefits commencing. Prepared for Ms Maxine Investor Page 8 of 28 Prepared by Mrs IFA

9 Critical Yield The Critical Yield is the level of growth required in the Novia SIPP that would enable an annuity to be purchased that is equivalent to the benefits available from the existing scheme, including any post retirement increases and partner s pension available. In other words, it describes how much growth you would need to match the benefits at retirement by purchasing an open market annuity that matches the existing scheme provisions. The overall Critical Yield rate has been split into components indicating the various slices of benefits that are included, and the growth rate that would be required to buy them. The table illustrates the necessary growth rates for securing the level pension, increases in payments and partner s pension included in your scheme benefits. Where the growth rate required for any particular benefit component is negative, this indicates that you already have the means to purchase that benefit within your transfer value. Critical Yield Breakdown - Retirement at Age 60 Critical Yields are based on Transfer Value of 600,000 Funds required to provide benefits Critical Yield Full pension of 23,396 p.a. 949, % Level Pension with 5 year guarantee 544, % Extra funds required for pension increases 339, % Extra funds required for partner's pension 64, % Reduced pension of 16,197 p.a. and Cash of 107, , % Cash and Level Pension 484, % Extra funds required for pension increases 235, % Extra funds required for partner's pension 44, % Critical Yield Breakdown - Early Retirement at Age 55 Critical Yields are based on Transfer Value of 600,000 Funds required to provide benefits Critical Yield Full pension of 15,531 p.a. 751, % Level Pension with 5 year guarantee 403, % Extra funds required for pension increases 297, % Extra funds required for partner's pension 49, % Reduced pension of 11,156 p.a. and Cash of 74, , % Cash and Level Pension 364, % Extra funds required for pension increases 213, % Extra funds required for partner's pension 35, % Prepared for Ms Maxine Investor Page 9 of 28 Prepared by Mrs IFA

10 Pension p.a. Accumulated Value / Pension Transfer Analysis Report Cost of Benefits Breakdown The Cost of Benefits Breakdown shows the different components of the equivalent annuity and their likely costs. This enables you to see how much you might need to spend to buy a level of benefit that is appropriate to you. For example, if you re most interested in a level pension that doesn t increase with inflation, you can use the Cost of Benefits Breakdown to see how much of your SIPP might be used up by purchasing an annuity that offers just this level of benefit. Annuity purchase cost of 949,022 at 60 1,000, , , , , , , , , ,000 64, , ,344 Partner's Pension Escalation Level Pension The chart below shows how long you would need to be taking an index linked pension before you would begin to benefit from the increases in payments. An RPI linked annuity is compared to the level annuity you could buy for the same price. The shaded area indicates the period during which the accumulated value from the level annuity exceeds the accumulated value from the RPI linked annuity. The RPI assumption is 2.50% p.a. 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Pension purchased with 949,022 at , , , ,000 50, Age Accumulated value from RPI better after 43 years Level Pension of 39,135 p.a. RPI Linked of 22,036 p.a. will be greater than level pension after 24 years Prepared for Ms Maxine Investor Page 10 of 28 Prepared by Mrs IFA

11 Reduced Pension Full Pension / Pension Transfer Analysis Report Retirement Benefits at age 60 The table below shows the pension benefits you re due to receive at age 60 from DB Scheme compared to the benefits you might be able to buy as an annuity from the funds accrued in your Novia SIPP at that time. The graphs show the benefits projected from age 60 to age 100. Full Initial pension Existing Scheme Novia SIPP Low 1.84% Novia SIPP Mid 4.84% Novia SIPP High 7.84% 23,396 10,822 20,408 36,270 Tax Free Cash Reduced Initial Pension 107, , , ,384 16,197 8,116 15,306 27,203 Full Annual Pension 140, , ,000 80,000 60,000 40,000 20, Age attained Projected Scheme Pension Low 1.84% Mid 4.84% High 7.84% Tax Free Cash and Reduced Annual Pension 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Age attained Projected Scheme Pension Low 1.84% Mid 4.84% High 7.84% Tax Free Cash 300, , , , ,000 50,000 Prepared for Ms Maxine Investor Page 11 of 28 Prepared by Mrs IFA

12 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Cash Flow Modelling The tables below show the money that might be left within the Novia SIPP, assuming you withdraw the same amount each year as would be payable from DB Scheme. The initial pension payable at age 60 from DB Scheme is 23, Allowing for tax of 20%, your net income would be 18, UFPLS/Drawdown in the Novia SIPP This table assumes the UFPLS or drawdown option would be used periodically in the Novia SIPP, whereby 25% of the amount drawn each time would be tax free. Retirement Benefits - Member's Pension Projected Projected Fund Values Growth Age Scheme Pension Low 1.84% Mid 4.84% High 7.84% required * 60 23, , , , , , ,098 1,185, % 70 29, , ,769 1,442, % 75 33, , ,440 1,768, % 80 38,398 12, ,535 2,183, % 85 43, ,341 2,719, % 90 49, ,558 3,413, % 95 56,166 73,289 4,319, % ,876 5,509, % * Growth rate required to maintain the projected Scheme Pension to the indicated age, at which point the funds would run out. 6,000, % 5,000, % 4,000,000 3,000,000 2,000, % -5.00% 1,000, % Age attained Low 1.84% Mid 4.84% High 7.84% % Low Growth Mid Growth High Growth Growth Rate to Age Prepared for Ms Maxine Investor Page 12 of 28 Prepared by Mrs IFA

13 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Full Drawdown with PCLS in the Novia SIPP The table below assumes the full drawdown option is used in the Novia SIPP, whereby 25% of the entire fund would be tax free. The tax free cash is used to provide income until such time as it runs out, then the remaining drawdown fund would be used to provide a taxable income. Retirement Benefits - Member's Pension Projected Projected Fund Values Growth Age Scheme Pension Low 1.84% Mid 4.84% High 7.84% required * 60 23, , , , , , ,647 1,134, % 70 29, , ,377 1,365, % 75 33, , ,488 1,659, % 80 38,398 11, ,410 2,022, % 85 43, ,497 2,483, % 90 49, ,470 3,073, % 95 56,166 3,833, % ,876 4,819, % * Growth rate required to maintain the projected Scheme Pension to the indicated age, at which point the funds would run out. 6,000, % 5,000, % 4,000, % 3,000,000 2,000, % 1,000, % Age attained Low 1.84% Mid 4.84% High 7.84% % Low Growth Mid Growth High Growth Growth Rate to Age Prepared for Ms Maxine Investor Page 13 of 28 Prepared by Mrs IFA

14 Reduced Pension / Pension Transfer Analysis Report Retirement Benefits on Early Retirement at age 55 The table below shows the pension benefits you are due to receive at age 55 from DB Scheme compared to the benefits you might be able to buy as an annuity from the funds accrued in your Novia SIPP. The graphs show the benefits projected from age 55 to age 100. Full Initial pension Existing Scheme Novia SIPP Low 1.84% Novia SIPP Mid 4.84% Novia SIPP High 7.84% 15,531 8,449 14,638 23,685 Tax Free Cash Reduced Initial Pension 74, , , ,411 11,156 6,337 10,979 17,764 Annual Pension Benefits Full Pension 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Age attained Projected Scheme Pension Low 1.84% Mid 4.84% High 7.84% Tax Free Cash and Reduced Annual Pension 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Age attained Reduced Scheme Pension Low 1.84% Mid 4.84% High 7.84% Tax Free Cash 200, , , , , ,000 80,000 60,000 40,000 20,000 Prepared for Ms Maxine Investor Page 14 of 28 Prepared by Mrs IFA

15 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Cash Flow Modelling The tables below show the projected funds left within the Novia SIPP, assuming you withdraw the same amount each year as would be payable to you if you stayed in the Existing Scheme. The initial pension payable at age 55 from the existing scheme is 15, Allowing for tax of 20%, your net of tax income from the scheme at age 55 would be 12, UFPLS/Drawdown in the Novia SIPP This table assumes the UFPLS or drawdown option would be used periodically in the Novia SIPP, whereby 25% of the amount drawn each time would be tax free. Retirement Benefits - Member's Pension Projected Projected Fund Values Growth Age Scheme Pension Low 1.84% Mid 4.84% High 7.84% required * 55 15, , , , , , , , % 65 19, , ,189 1,092, % 70 22, , ,677 1,353, % 75 25, , ,507 1,689, % 80 28,798 70, ,723 2,127, % 85 32, ,777 2,699, % 90 37, ,158 3,453, % 95 42, ,114 4,452, % , ,484 5,783, % * Growth rate required to maintain the projected Scheme Pension to the indicated age, at which point the funds would run out. 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Age attained Low 1.84% Mid 4.84% High 7.84% 10.00% 5.00% 0.00% -5.00% % % % % % Low Growth Mid Growth High Growth Required Growth Rate Prepared for Ms Maxine Investor Page 15 of 28 Prepared by Mrs IFA

16 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Full Drawdown with PCLS in the Novia SIPP The table below assumes the full drawdown option is used in the Novia SIPP, whereby 25% of the entire fund would be tax free. The tax free cash is then used to provide income until such time as it runs out, then the remaining drawdown fund would be used to provide a taxable income. Retirement Benefits - Main Pension at Age 55 Projected Projected Fund Values Growth Age Scheme Pension Low 1.84% Mid 4.84% High 7.84% required * 55 15, , , , , , , , % 65 19, , ,784 1,035, % 70 22, , ,630 1,258, % 75 25, , ,970 1,562, % 80 28,798 67, ,379 1,942, % 85 32, ,765 2,436, % 90 37, ,684 3,079, % 95 42, ,493 3,924, % ,907 5,041, % * Growth rate required to maintain the projected Scheme Pension to the indicated age, at which point the funds would run out. 6,000, % 5,000, % 0.00% 4,000,000 3,000, % % 2,000, % % 1,000, % Age attained Low 1.84% Mid 4.84% High 7.84% % Low Growth Mid Growth High Growth Required Growth Rate Prepared for Ms Maxine Investor Page 16 of 28 Prepared by Mrs IFA

17 Benefits on Death before Retirement DB Scheme If you die before you retire, a payment of.00 would be payable plus interest at 0.00% per annum. This represents your member s contributions. A partner's pension is payable at a reduced rate which is normally expressed as a percentage of your scheme pension. It will be taxed when it is paid to your partner via Pay As You Earn (PAYE). The level of partner s pension increases after you ve left the employment of the company, to mitigate the effects of inflation. The partner s pension payable from each pension component is as follows: Guaranteed Minimum Pension (GMP) Pension Component (Contracting-Out Related) Revalued Scheme Pension Now Partner % Death Benefit Partner's Pension Escalation In Payment see Notes GMP* benefits 6 April April , % GMP Fixed Post 1997 Contracted-Out Rights 6, % 3, CPI Max 5% Member s GMP is only payable from state retirement age. The scheme may pay a GMP Bridge pension which would mean your partner would start receiving benefits before this age. Other Scheme Pension Benefits Pension Component (Non Contracting-Out) Revalued Scheme Pension Now Partner % Death Benefit Partner's Pension Escalation In Payment see Notes Excess over GMP - Pre 97 2, % 1, RPI max 5% Excess over GMP - Post 97 8, % 4, RPI max 5% Novia SIPP If you die whilst invested in the Novia SIPP, whether or not you ve started taking retirement benefits, any unused funds in your pot will be payable to your beneficiaries. You can nominate beneficiaries by completing a simple form. If you die before the age of 75 then your beneficiaries will receive the benefits tax free. If you die after you ve reached 75 then your beneficiaries will pay tax via PAYE. Prepared for Ms Maxine Investor Page 17 of 28 Prepared by Mrs IFA

18 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Comparison of Death Benefits before Retirement In order to compare the existing scheme s partner s pension with the Novia SIPP fund values, the partner s pension has been converted into a capital sum using FCA prescribed methodology. The table and graph below show this capital value alongside the projected fund values that could be available to pay death benefits from your Novia SIPP. Death Benefits Comparison before Scheme Pension Age 60 Age Capital Value of Projected Partner Scheme Pension Fund Value at Low 1.84% Capitalised Value of Death Benefits before Retirement Projected Novia SIPP Values Fund Value at Mid 4.84% Fund Value at High 7.84% , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,719 NRA 395, , , ,538 1,000, , , , , , , , NRA Age attained Capital Value of Projected Partner Scheme Pension Fund Value at Low 1.84% Fund Value at Mid 4.84% Fund Value at High 7.84% Prepared for Ms Maxine Investor Page 18 of 28 Prepared by Mrs IFA

19 Benefits on Death after Retirement DB Scheme Your pension will continue to be paid for a minimum of 5 years from the date of retirement. On your death, any partner you may have at that time could receive a partner s pension. Based on the information provided by DB Scheme this could be 50% of your annual pension entitlement at the point of death. The level of partner s pension increases in payment, to mitigate the effects of inflation. Novia SIPP If you die whilst invested in the Novia SIPP, whether or not you ve started taking retirement benefits, any unused funds in your pot will be payable to your beneficiaries. You can nominate beneficiaries by completing a simple form. If you die before the age of 75 then your beneficiaries will receive the benefits tax free. If you die after you ve reached 75 then your beneficiaries will pay tax via PAYE. Prepared for Ms Maxine Investor Page 19 of 28 Prepared by Mrs IFA

20 Projected Novia SIPP Fund Values / Pension Transfer Analysis Report Comparison of Death Benefits after Retirement In order to compare the existing scheme s partner s pension with the Novia SIPP fund values, the partner s pension has been converted into a capital sum using FCA prescribed methodology. The table and graph below show this capital value alongside the projected fund values that could be available to pay death benefits from your Novia SIPP. Death Benefits Comparison after Scheme Pension Age 60 Age Capital Value of Projected Partner Scheme Pension Fund Value at Low 1.84% Projected Novia SIPP Values Fund Value at Mid 4.84% Fund Value at High 7.84% , , , , , , ,038 1,177, , , ,919 1,420, , , ,364 1,726, , ,984 2,113, , ,994 2,608, , ,111 3,243, ,780 4,065, ,709 5,137,495 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Capital Value of Projected Partner Scheme Pension Fund Value at Low 1.84% Age attained Fund Value at Mid 4.84% Fund Value at High 7.84% Prepared for Ms Maxine Investor Page 20 of 28 Prepared by Mrs IFA

21 Pension Protection Fund The PPF was set up in April 2005 to protect you in the event that your employer or former employer becomes insolvent or cannot continue to pay your promised pension. It provides benefits to members of eligible schemes where the scheme has insufficient assets to provide members with pension benefits. Details of the PPF compensation levels are set out below. If your scheme is eligible for PPF protection, the level of benefit payable will depend on the pension scheme rules and on your circumstances immediately before the assessment date. For the purpose of this analysis the assessment date is the date on which your transfer value was calculated, and the date the scheme applies to the PPF is assumed to be the date of this report. The PPF does not provide absolute guarantees, as its ability to pay benefits depends on the PPF itself being solvent. It is funded by levies on final salary pension schemes, and the government does not underwrite the scheme. Therefore, it is possible that the PPF solvency may fall to such level that the PPF benefits may need to be reduced. Summary of PPF provisions The PPF provides compensation at two levels: 100% or 90%. 100% compensation level The 100% compensation level normally applies to those in receipt of benefits, typically all types of pensioners: normal retirements, ill-health retirements and those in receipt of survivors benefits. Broadly speaking, this means a starting level of compensation that equates to 100% of the pension in payment immediately before the assessment date (subject to a review of the rules of the scheme by the PPF). However, no pension increases are provided in respect of pensionable service prior to 6 April 1997 and compensation that is derived from pensionable service on or after that date is only increased each year in line with CPI capped at 2.5%. This could potentially result in a lower rate of increase than the original scheme would have provided. 90% compensation level The 90% compensation level normally applies to pension scheme members who have not yet reached the scheme s normal pension age, including those who are not yet taking benefits and those who have taken early retirement. The compensation at retirement will be based on the accrued benefits immediately before the assessment date plus revaluation to retirement, currently based on CPI. Revaluation is subject to a cap of 5% in respect of service from April 1997 to April 2009, and 2.5% in respect of service thereafter. Once compensation is in payment, pension increases are applied in the same way as outlined under 100% compensation level above. Again, this could result in a lower rate of increase than the scheme would have provided. Pension scheme members who are only entitled to receive 90% compensation are also subject to the compensation cap. At April 2018 this was 35, at age 65 after the 90% has been applied. Prepared for Ms Maxine Investor Page 21 of 28 Prepared by Mrs IFA

22 Pension Protection Fund Analysis 93.90% of your pension benefits are in respect of post April 1997 service and will receive escalation in the PPF subject to PPF rules. The remaining 6.10% will not receive escalation. The Normal Retirement Age for DB Scheme is 60. For the purposes of this comparison it is assumed that the scheme applies to the PPF. Assuming Retirement at Age 60 Full Pension Pension on 04/12/2018 Pension at 60 Capital Value of Benefits Critical Yield in Novia SIPP Existing Scheme 19,197 23, , % PPF 17,277 20, , % PPF as % of Scheme 90% 87% 70% PCLS plus Reduced Pension PCLS at 04/12/2018 Reduced Pension at 60 Capital Value of Benefits Critical Yield in Novia SIPP Existing Scheme 107,981 16, , % PPF 162,436 15, , % PPF as % of Scheme 150% 95% 87% The commutation rates used to convert pension into tax free cash are 15 in DB Scheme and per 1 of pension in the PPF. Assumed Early Retirement at Age 55 Full Pension Pension on 04/12/2018 Pension at 55 Capital Value of Benefits Critical Yield in Novia SIPP Existing Scheme 19,197 15, , % PPF 17,277 17, , % PPF as % of Scheme 90% 110% 85% PCLS plus Reduced Pension PCLS at 04/12/2018 Reduced Pension at 55 Capital Value of Benefits Critical Yield in Novia SIPP Existing Scheme 74,374 11, , % PPF 160,061 12, , % PPF as % of Scheme 215% 114% 104% Any applicable early retirement factors have been applied on both the existing scheme and the PPF in the calculation of the pension at age 55. The commutation rates used to convert pension into tax free cash are 17 in DB Scheme and per 1 of pension in the PPF. Prepared for Ms Maxine Investor Page 22 of 28 Prepared by Mrs IFA

23 Notes Funding statement We were told that the current scheme is Fully Funded Scheme Status The scheme administrator has indicated that the scheme is Fully In Force Transferred-in Benefits If there are any other special arrangements in place due to transferred in benefits these were not included in the analysis. Ill Health Retirement Benefits Some defined benefits schemes will pay enhanced benefits to members who wish to retire early due to illhealth. This is out of the scope of this analysis and is not considered in the report. Early retirement due to ill health is available from the Novia SIPP. You can take benefits from the SIPP before age 55 subject to required medical evidence. Transfer Value Expiry Date This analysis is based on a quoted transfer value from DB Scheme that expires 17 December A new transfer value will need to be quoted by the scheme trustees if a transfer is to happen after this date. Prepared for Ms Maxine Investor Page 23 of 28 Prepared by Mrs IFA

24 Assumptions Used This report uses assumptions prescribed by the Financial Conduct Authority (FCA). The FCA assumptions are regularly reviewed and will change from time to time. Enhanced or ill health annuities are not considered in the annuity rate assumptions. Indices such as CPI or RPI are tracked using the FCA assumptions for both past and future growth. Low Mid High Annuity Interest Rates (Level) -0.50% 1.50% 3.50% Annuity Interest Rates (RPI Linked) -4.00% -2.00% 0.00% Annuity Interest Rates (CPI Linked) -3.50% -1.50% 0.50% RPI indexation 0.50% 2.50% 4.50% NAE Indexation 2.00% 4.00% 6.00% Retail Prices Index 2.50% Average Earnings Index (Section 148 Orders) 4.00% Pre & Post Retirement Limited Prices Index 2.50% Consumer Prices Index 2.00% PPF Revaluation (at CPI) 2.00% PPF Reduction Factor 90.00% TVC Annuity Purchase Expense Loading 4.00% TVC Investment Management Charges 0.75% TVC Risk Free Discount Rate 1.50% Prepared for Ms Maxine Investor Page 24 of 28 Prepared by Mrs IFA

25 Data Used Client Information Name Gender Date of Birth Employment Status Marital Status Partner's Date of Birth Partner's Forename Partner's Surname Partner's Gender Attitude to Risk (Novia Risk Level) Marginal Income Tax rate to use Is impaired life annuity applicable Impaired Life Rating (additional years to age) Adviser Information Client Case Reference Adviser Firm Name Adviser Firm Contact Name Ms Maxine Investor Female 30-May-1967 Not provided Married 30/05/1964 Martin Transfer Male Not provided Basic Rate Not provided Not applicable AB123456C IFA Firm Mrs IFA Adviser Initial Fee (% of initial investment) Adviser Initial Fee ( amount) Adviser Ongoing Fund Based Fee (% of fund) Adviser Ongoing Fixed Fee ( ) Adviser Fixed Fee Frequency 1.00% %.00 Monthly Novia Platform Charges Used Annual account charge between and 250, % between 250,000 and 500, % between 500,000 and 750, % between 750,000 and 1,000, % above 1,000, % Discretionary Fund Management Fee for DFM provider (% of fund) 0.00% New Arrangements Funds and Weights Fund Name or Generic Asset Group Name % OCF Mid Growth % Cash 2.00% 0.00% 2.75% European Wealth Stg Bd A Acc 20.00% 2.35% 5.00% Fidelity Index UK A Acc 30.00% 0.30% 5.00% Henderson All Stks Crd I GrAcc 48.00% 0.54% 4.75% Prepared for Ms Maxine Investor Page 25 of 28 Prepared by Mrs IFA

26 Current Pension Arrangement Scheme Name Date Joined Scheme Date of Leaving Scheme (dd/mm/yyyy) Was Scheme ever Contracted Out? Date Scheme Contracting Out Started Date Scheme Contracting Out Ended Scheme Retirement Age Early Retirement Illustration required Scheme Funding Status Funding level PPF Assessment Date Scheme Status Basis for revaluation of pension benefits in excess of GMP DB Scheme 05-May June-2011 Yes 05/05/ /06/ Yes Fully Funded Assumed 04 December 2018 Fully In Force Exact Months Transfer Value Information Transfer Value Calculation date Total Transfer Value (Cash Equivalent) Money Purchase AVC (included in transfer value) Assumed Rebate to be received in relation to Limited Revaluation Premium Transfer Value Guaranteed until 20-November , December-2018 Death Benefits Benefit type Amount As at Date ** Revaluation in Deferment Lump Sum Amount from Employer.00 Date of Leaving 0.00% Return of Member Contributions.00 Date of Leaving 0.00% Lump Sum multiple of Partner' Pension 0.00 Prepared for Ms Maxine Investor Page 26 of 28 Prepared by Mrs IFA

27 Pension Component Amount p.a. As at Date ** Revaluation in Deferment see Notes Escalation In Payment see Notes Partner % Death Benefit Guaranteed Years GMP* benefits 6 April April , Date of Leaving GMP Fixed GMP Fixed 50% 5 Post 1997 Contracted-Out Rights 5, Date of Leaving CPI Max 3% CPI Max 5% 50% 5 Pension Component Amount p.a. As at Date ** Revaluation in Deferment see Notes Escalation In Payment see Notes Partner % Death Benefit Guaranteed Years Excess over GMP - Pre 97 2, Date of Leaving RPI max 3% RPI max 5% 50% 5 Excess over GMP - Post 97 6, Date of Leaving RPI max 3% RPI max 5% 50% 5 * ** *** If the scheme has been contracted out of the State Second Pension (S2P), it must provide a minimum level of pension, which is broadly equivalent to the amount of State pension given up. This pension is called the Guaranteed Minimum Pension. If left blank will be assumed to be at the date at which the Transfer Value was assessed. For PPF calculations, pre and post 6 April 1997 pensions have different treatment so need to be separated if accurate assessment is to be made. Notes for standard revaluation/escalation RPI max 5% CPI Max 3% CPI Max 5% Benefits are revalued pre-retirement or increased post-retirement at RPI, subject to a maximum of 5% Benefits are revalued pre-retirement or increased post-retirement at CPI, subject to a maximum of 3% Benefits are revalued pre-retirement or increased post-retirement at CPI, subject to a maximum of 5% Prepared for Ms Maxine Investor Page 27 of 28 Prepared by Mrs IFA using inputs version TVAS_2016_v7 TVAS_v48

28 Notes for non-standard revaluation/escalation Rate Used Prepared for Ms Maxine Investor Page 28 of 28 Prepared by Mrs IFA using inputs version TVAS_2016_v7 TVAS_v48