THE METAL BOX PENSION SCHEME METAL BOX NEWSLETTER MEMBERS REPORT WINTER 2013/14. In this issue... AUTO-ENROLMENT SCHEME UPDATE

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1 THE METAL BOX PENSION SCHEME METAL BOX NEWSLETTER MEMBERS REPORT WINTER 2013/14 DEFINED CONTRIBUTION SECTION In this issue... AUTO-ENROLMENT Investment update SCHEME UPDATE Pensions update

2 Your contacts It is five years since the day-to-day administration of the Scheme was transferred to Xafinity Paymaster. Xafinity Paymaster became part of the Equiniti group in 2010 and is now called Equiniti Paymaster. The team that looks after your pension records is unchanged, but you may have noticed its new name on letters you receive from the administration team about your pension. Equiniti Paymaster The Metal Box Pension Scheme c/o Equiniti Paymaster Sutherland House Russell Way Crawley RH10 1UH Telephone: +44 (0) Fax: +44 (0) Standard Life Telephone: Scheme website The website has been given a fresh new look and the content updated. The new website provides you with everything you need to know as a member of the Scheme. You can also use the modeller and download useful documents and forms. Let us know what you think of our new website Welcome from the UK Pensions Manager Welcome to your new-look Members Report, sent from the Scheme s Trustee. During 2013, we worked hard to improve our Scheme communications in response to the results of the 2012 Communications Survey (see page 9). In previous years we have produced a combined newsletter covering both DB and DC Sections of the Scheme. In response to feedback from members, we have decided to produce separate versions of the newsletter for DB and DC members. This means we are able to provide you with the most relevant information for your Section. We also wanted to explain the pension scheme in simple terms, especially to those employees affected by the introduction of pensions auto-enrolment (see page 4). As a result, in the summer we launched a range of communications including an updated Scheme website, a new Members Booklet and Investment Guide with clearer information to help you make the most of the DC Section. I would encourage you to use these new communication tools, if you haven t already. After reading through the new information, if you have any general queries about your pension, your Human Resources Department or the Scheme administrators Equiniti Paymaster will usually be able to help. But you can contact me if you have any problems getting the information you need or if you wish to raise a query directly with the Trustee. Recently, there have been some changes to the investment funds available for members. You can find more information on these changes on page 7. An updated list of the funds available to members is included with this newsletter. I hope that you like the new format newsletter and find the information easy to read. As always, you can send your comments and suggestions to me using the details below. Cathy Aston UK Pensions Manager catherine.aston@eur.crowncork.com Tel: +44 (0)

3 4 Pensions auto-enrolment an update The Government introduced pensions auto-enrolment in This is a new law that requires employers to provide workplace pension schemes that meet certain standards and to automatically enrol all eligible employees to help people build up more pension savings for their retirement. Under the Government rules, employees are currently eligible for auto-enrolment if they: are aged over 22, but under State Pension Age; and earn at least 9,440 a year; and work, or usually work, in the UK. There were 700 employees in the UK who met the above criteria and hadn t yet joined the Scheme. On 1 November 2013, these employees were all automatically enrolled into the DC Section. So far, only about 50 have decided that they don t want to remain members and have opted out. At the auto-enrolment date, an additional 100 employees didn t meet the criteria set out above to be automatically enrolled. In most cases, this was because they had not yet reached age 22. If you have colleagues who are not members remember that they can join the DC Section at any time they just need to speak to HR. If you were auto-enrolled in November, you can now increase your contributions from the minimum 1% entry level and also change your investment options by completing the relevant forms. You should also remember to complete your nomination forms: - Nomination for a lump sum death benefit form You should complete this to nominate who you would like to receive any lump sum death benefits. - Nomination for Dependant s Pension form You should consider completing this form if you are not legally married or in a civil partnership, depending on your own personal circumstances. All forms were enclosed with your membership confirmation letter. For copies of these forms visit the website or ask your HR department. Summary of the Report & Accounts The financial information shown below is taken from the Trustee s Report and Financial Statements. Please note that these figures relate to the DC Section only. Therefore, they are not directly comparable with the numbers in the 2012 Members Report which included the DB Section financials. Membership update 31 March March 2012 Active Deferred Total Financials for the DC Section Following pensions auto-enrolment in November December 2013 Active 1,380 Deferred 174 Total 1, thousands 2012 thousands Value of Personal Accounts at start of the year 11,828 10,305 Money into the Section Member contributions 1,317 1,136 Employer contributions 1,360 1,145 Total money in 2,677 2,281 Net returns on investments 1, Money out of the Section Employer contributions for risk benefits and administration expenses (426) (362) Pension purchase and retirement lump sums (58) (105) Death benefits (56) (84) Transfers out (44) (425) Refunds of contributions (10) (6) Total money out (594) (982) Value of Personal Accounts at end of the year 15,122 11,828 5

4 Valuation update By law, the Trustee must carry out an actuarial valuation of the Scheme every three years. The most recent full valuation was undertaken as at 31 March 2013 and was agreed by the Trustee Directors (and the Company) at their meeting in December What is an actuarial valuation? An actuarial valuation is a financial health check to determine the funding position of a defined benefit scheme at a set date. For the DB Section of The Metal Box Pension Scheme, this compares the current value of the Scheme s assets (the investments) with its liabilities (the expected cost of paying benefits to members) and determines if there is a funding surplus or shortfall. The funding position of the DB Section has been communicated to members of the DB Section. In the DC Section, contributions are paid in accordance with the Schedule of Contributions. Credits and contributions are invested in members Personal Accounts with Standard Life. Personal Accounts can increase or decrease in value depending on the investment performance of the funds selected by members. The DC Section does not therefore have a funding position, but the valuation does determine the level of contributions that the Company will pay to provide for future benefits. The contributions paid by the Company are more than sufficient to pay the credits to members Personal Accounts at Standard Life. After these credits have been paid, the balance is then used to meet the cost of any discretionary death-in-service or ill-health benefits that become payable to DC Section members together with the administration costs. Where can I get more information? You can find information in the Documents area on the Scheme website You can also request copies from the UK Pensions Manager. DC investment choices In 2012, the Trustee introduced a new streamlined range of funds for members of the DC Section to select via Standard Life. The Trustee monitors Standard Life as an organisation and also the individual funds to see if they continue to meet their objectives. As a result, following advice from its professional adviser, Towers Watson, the Trustee decided to make two changes to the Standard Life fund range: In November 2013 SL Global Equity Unconstrained Pension Fund (KS) In February 2014 SL Invesco Perpetual High Income Pension Fund (K1) replaced with replaced with SL Veritas Global Focus Pension Fund (ADKL) SL Majedie UK Equity Pension Fund (CZ) In both cases, members savings and contributions were switched to the new fund unless they chose an alternative. Other changes Reviewing your choices It s important to review your investment choices regularly to make sure they are still correct for you. For more information about your investment options in the DC Section, why not read through the new Investment Guide, which was recently issued to all members. If you do not have a copy, you can get one from your HR team or download it from our new-look website Remember, if you are invested in Lifestyle, you also need to review your Target Retirement Age regularly. Otherwise, your savings might not be invested correctly as you approach retirement. An updated list of the funds available to DC Section members is included with this newsletter. During the year, Standard Life informed the Trustee that it had changed the underlying fund for the BlackRock Aquilla HP Equity Pension Fund (JP) to the BlackRock CIF UK Equity Tracker Fund. If you have savings in this fund, you may have noticed the name change. The fund objectives, management charges and risk profiles were not affected by this change and members did not incur any costs when the change was made. i 6 7

5 Scheme update Life Academy pensions auto-enrolment seminars Experts from Life Academy delivered a series of presentations to employees in the autumn about the introduction of pensions auto-enrolment. Over a three-week period in October 2013, more than 400 employees attended 36 presentations at 13 venues across the UK. The seminars aimed to ensure that employees: were aware of auto-enrolment and why it was happening: understood how pensions work, and the options and decisions required in a defined contribution scheme; and had the knowledge about the DC Section to help decide whether they should save in the Scheme for their retirement or opt out. Communications survey During 2012, we carried out some research to find out what you think about the communications you receive from the Scheme. This newsletter is one example of how we have used the feedback to change the communications we provide to you. You will see that although it still includes the facts and figures, they are now presented in a way that should be easier to read and understand. Over the past year, to address the comments about explaining your pension options more clearly, we have also updated the Scheme website On the website you ll find: This newsletter is one example of how we have used the feedback to change the communications we provide to you. Your feedback... The results of the evaluation forms from the attendees were very encouraging: 97% agreed that their knowledge of the DC Section improved as a result of attending the presentations; 88% agreed with the statement the DC Section is a valuable employee benefit ; and 94% agreed that they were better informed about their options and next steps. Detailed information about the Scheme and AVCs A modeller to help you plan your retirement savings The Scheme documents and forms The management team at Life Academy said: The feedback from attendees has been very positive about the support Crown had put in place in relation to the DC Section and auto-enrolment. The majority of those who attended the presentations found them worthwhile. The feedback tells us they are now in a far more informed position to make decisions around auto-enrolment. Visit the new website at 8 9

6 Pensions update Pension liberation fraud The Pensions Regulator has highlighted the practice of pension liberation as possible fraud, so please treat any approach with extreme caution. You may have seen articles in the press and on TV recently about pension liberation scams. This is where companies offer a transfer of a scheme pension to an arrangement which allows the individual to access their funds before the minimum retirement age. This mainly affects deferred members who have left the Scheme but have not yet taken their pension. However, if you are an active member of the Scheme, this could affect you if have any pension benefits from previous arrangements. Pension liberation arrangements are usually promoted through unsolicited calls, text messages, s or adverts, often delivered in a pushy manner and featuring unrealistic promises. The scheme presented to you may seem attractive, but there are serious consequences of liberating your pension: Pension tax changes Annual Allowance and Lifetime Allowance The Government has announced that the Annual Allowance and the Lifetime Allowance will be reduced from 6 April What is the Annual Allowance? The Annual Allowance is the amount of pension savings that you can build up in any one year without having to pay a tax charge. It is possible to carry forward unused Annual Allowance from up to three previous tax years. Currently From 6 April 2014 Annual Allowance 50,000 40,000 You will most likely be charged a high commission fee of between 10-30% of your pension benefits. You will be liable for a tax bill from HM Revenue & Customs of 55% of your benefits, plus other potential penalties. This could leave you with just 15% of your pension benefits as a cash lump sum and no income at retirement. What is the Lifetime Allowance? The Lifetime Allowance is the limit on the total amount of pension savings you can build up over your lifetime without having to pay a tax charge. Lifetime Allowance Currently 1.5 million From 1.25 million 6 April 2014 It is highly recommended that you seek financial advice before transferring your pension benefits. You can find a financial adviser in your area by visiting You can find more details of the Regulator s Don t let your pension become prey campaign at both its website and The Pensions Advisory Service website or call them on The allowances are currently set at a high level, so the reductions are unlikely to affect the majority of members. However, if you think you may exceed the limits, you should speak to a financial adviser. You can find a factsheet that explains the Annual Allowance in more detail on the website. Pension liberation arrangements are usually promoted through unsolicited calls, text messages, s or adverts, often delivered in a pushy manner and featuring unrealistic promises

7 Who looks after the Scheme? Metal Box Pension Trustees Limited (the Trustee) is responsible for the stewardship of The Metal Box Pension Scheme and AVC Plan. There are four employer-nominated and two member-nominated Trustee Directors: Employer-nominated Terry Cartwright (Chairman) Consultant Member-nominated Mike Davis (until 30 June 2014) Supply Chain Director, Crown Food Europe Paul Browett Vice President and Treasurer, CROWN Europe replaced with Member Nominated Trustee Directors (MNDs) are appointed for a three-year term. As previously advised, Mike Davis s period of office was extended for 12 months to 30 June 2014 so that there wasn t a change in the middle of the important valuation discussions. The process to find his replacement was completed in February 2013 and Richard Westcott, Head of Methods and Standards, Europe, was selected. Richard has been attending Trustee meetings since March 2013 and will be formally appointed on 1 July 2014 for three years. Howard Lomax* Retired Richard Westcott (from 1 July 2014) Head of Methods and Standards, Europe John Riley Director, Production Engineering, North American Food Division *Tom Kelly resigned from the Trustee Board with effect from 1 March He will be replaced by Howard Lomax, who has recently retired from the Company. Howard s previous role with the company was Senior Vice President & CFO, Crown Europe. David Powell Pensioner David Powell, the pensioner MND, will complete his three-year term of office on 31 March Information about the nomination process will be provided to pensioners in due course. We thank Tom and Mike for their service as Trustee Directors and welcome Howard and Richard to the Board. Designed and produced by Anthony Hodges Consulting Ltd 2014_ On behalf of Metal Box Pension Trustees Limited, the Trustee of The Metal Box Pension Scheme 2014