Better Living. in retirement

Transcription

1 Better Living 2 TRUST GUIDE in retirement A guide to the Company s pension scheme Better Living with The Schneider Electric DC Trust

2 Contents Better Living in retirement 04 Welcome to Better Living 06 Schneider Electric helps you save 07 Look... It only costs 68 to save 238! 08 A pension built to last 10 Pension Quality Mark 12 Affording to save 13 The savings race The details 14 Building up your savings 16 Managing your savings online 17 Benefits if you die 18 Leaving early 19 Regulation 22 Need help or information? About this Trust Guide: This guide from Schneider Electric, dated 1 April 2015, outlines the benefits of saving into the Schneider Electric DC Trust and explains how The Trust is managed by The Trustees. Your benefits will always be determined under a governing document called The Trust Deed and Rules, copies of which are available on request. In case of any discrepancies between this booklet and the governing document, The Trust Deed and Rules will prevail. Any reference to taxation, National Insurance and legislation in this guide is correct at the time of going to print. Materials provided This guide is one of four items that together explain Better Living with The Schneider Electric DC Trust, please read them all: 1. Benefit Summary 2. Trust Guide 3. Investment Guide 4. Retirement Guide. Additional information A Glossary of Terms and an interactive modeller are available at For printed copies of the glossary, please ask The Help Desk. Other formats for ease of reading Please ask The Help Desk. 3

3 Welcome to Better Living Switch on to the power of pension savings A message from the Company Every day through your work you help customers worldwide make the most of their energy. As a result, many people enjoy a better standard of living. Closer to home, as an employer, we use our guiding ethos of sustainability to ensure employees enjoy a better living throughout their careers - and beyond. You ll sleep better with a pension to take care of you in retirement That s why we re inviting you to join the Schneider Electric DC Trust. It s a simple and tax-efficient way to build up savings to sustain you in retirement. Plus, to help your savings grow even more, the Company pays in too. Whether your retirement is a long way off or just round the corner, saving into the Schneider Electric DC Trust gives you the opportunity for Better Living in retirement! JOINING IS LIKE GETTING A PAY RISE If you accept our invitation and start saving, both Schneider Electric and the tax man will pay into your Personal Account each month. See page

4 Schneider Electric helps you save for your future LOOK... It only costs 68 to save 238! Because saving for retirement is such an important undertaking, you get lots of help from the Company and the Government: As an incentive to help you save, the Company also contributes money each month based on how much you pay in - it s like getting a pay rise! You can get both income tax and NI relief on your contributions - this makes The Trust a very cost-effective way for you to save. Your pension savings will grow free from many investment taxes - this gives your money extra chance to grow compared to ordinary savings which may be taxed. Plus when you take your benefits you can decide whether to take all the money as one or more lump sums, or an income for the rest of your life - or a combination of both. Some of the money will even be tax free! LOOK AT YOUR BENEFIT SUMMARY It shows all your contribution options and how much extra you can expect to get each month from Schneider Electric. This example is for a member with a Pensionable Salary of 20,000 pa who gives up 6% of this each month ( 100 gross, 80 net) and the Company pays in 7.5% ( 125). If the member is subject to NI, paying by Salary Exchange reduces this member s NI by 12 a month so it only costs them 68. The Company s NI reduces by a month and this is added to the Company contribution too. YOU TAX MAN COMPANY If the member pays in by Salary Deduction instead, there is no Company NI relief so the total paid in is less ( 225). It also means that membership will cost more ( 80) because the member makes no NI saving. If you are a higher rate taxpayer, it costs less as income tax and NI relief at your highest marginal rate are added in. See your Benefit Summary for details of your contribution options It s like getting a pay rise! Every month you get over 3 1/ 2 times what you pay in yourself

5 A pension built to last TAKE THE CASH You can take out all the money at once if you wish. See the Retirement Guide. ENJOY A SECURE INCOME FOR LIFE To last throughout retirement. See the Retirement Guide. TAKE CASH AS YOU NEED IT Leave the rest invested with the chance for extra growth. See the Retirement Guide. TIME TO ENJOY YOUR BENEFITS You can start taking benefits from age 55 - whether or not you stop working. Although you re free to take pension benefits from age 55, you may prefer to continue working way into your 60s or even 70s. So, when designing this Trust we ve built it to last - and included plenty of choice and flexibility for all stages of your life. Plus there are simple ways to protect the value of your pension savings as you get closer to retirement. Take a look at this route to Better Living From when YOU JOIN THE TRUST to when it is TIME TO ENJOY YOUR BENEFITS - it shows all the flexibility and benefits on offer DIE BEFORE RETIRING? Your pension savings will go to your family. See p17. OTHER ABSENCES? Contributions (yours + the Company s) will be based on the actual pay you receive. MATERNITY/ PATERNITY/ADOPTION LEAVE? During paid leave you can keep paying in based on your actual on-leave pay, and the Company will pay in based on your pre-event pay. LEAVE SCHNEIDER ELECTRIC? If you give up work or change jobs you can transfer to another pension scheme. See p18. STOP PAYING IN? You can - but if you leave you may not be able to rejoin. See page 18. No matter where life takes you in the future, The Trust can adapt to match your changing needs. You can alter your contributions and decide exactly when and how to take your benefits. Plus, you have the convenience of managing your pension savings online at: www. SWITCH INVESTMENTS? You can do this at any time, free of charge. See the Investment Guide. ALTER CONTRIBUTION AMOUNTS? You can do this in April and October each year; for special lifestyle events like marriage, childbirth etc you can do this at other times as well. Ask PeopleLink. YOU JOIN THE TRUST Start your pension savings and enjoy Company contributions and tax and NI relief as well. See p7 and p

6 Value for money and high levels of employee support The Schneider Electric DC Trust has been awarded the Pension Quality Mark by the National Association of Pension Funds. This prestigious Pension Quality Mark recognises the high levels of support and Company contributions provided by The Trust, as well as its low cost to members: Schneider Electric meets ALL costs related to trustee and pension adviser services; plus the cost of administration and any levies. You pay just for the investment options you choose (costs are automatically deducted from the investments, so there are no direct costs for you to pay). These charges are shown on the Fund Factsheets and are typically higher for actively managed funds. With generous Company contributions you can still enjoy life while building your pension 10 11

7 Affording to save - it s easier than you think! It s surprising how small cut backs today can mount up to big savings for tomorrow! The savings race - starting early costs you less It is never too late to start saving for retirement. As a general rule the sooner you start the less it will cost you and the better off you ll be. = 569,000 Deciding to save is a choice about affording the really important things in life. If you couldn t live on just the State Pension when you retire, you may want to save as much as you can into The Trust from day one and increase your contributions when you can afford to. Doing this can help you achieve a more self-sufficient retirement. If you re on a tight budget, a few small cut backs today can make for a much Better Living in the future. This is backed up by the research figures opposite which underline the power of diverting spare cash in this way. Time for a coffee break? Look at the average cost-savings a 30 year old, working to age 68, could achieve:* Cut one takeaway coffee a week save 11,800 Switch mobile phone tariff save 16,100 Cut one packet of cigarettes a week save 31,400 Cut out takeaway food once a week save 50,900 Take a packed lunch to work instead save 63,700 Here s a simple example for a set of twins - Both twins start work at age 21 and earn the same salary until they retire at 65. Sue starts saving straight away, but Sam waits until his 40th birthday. Both twins get Company Contributions and earn 6.5% net growth a year on their savings. Sue wins Contributions total over 44 yrs: 105,600 Pension fund value at age 65: 569,000 Sue beats Sam by a massive: 278,000 Sam trails behind Contributions total over 25 yrs: 120,000 Pension fund value at age 65: 291,000 Because Sam started 15 years after his sister, he tried to play catch up. Despite 14,400 extra being paid into his account, Sue still got nearly twice as much as him. For the same result, Sam s contributions would need to have been 782 a month from age 40. = 291,000 *Source: Nest NB: Although accurate, these simplistic examples are purely illustrative and do not indicate what you could achieve with similar monthly savings into The Trust. SAM and the Company pay in a total of 400 a month for 25 years SUE and the Company pay in a total of 200 a month for 44 years 12 13

8 The details Building up your savings RETIREMENT CAN LAST A VERY LONG TIME So you may need to save all you can to build up enough money to last. On average, men aged 65 expect to live for 18 years or more, and women 20 years or more. Saving by Salary Exchange gives many employees best value for money - you get NI relief and Schneider Electric also pays its Company NI relief into your pension savings to help them grow. The payments you and Schneider Electric make into your Personal Account are called Contributions. We will automatically enrol you into paying by Salary Exchange, but you can opt-out of this and into Salary Deduction if you prefer. Paying by Salary Exchange (also known as Salary Sacrifice) For many employees this method of contributing means they get a higher Company contribution. Here s how it works. You agree to take a lower annual salary (based on the contributions you wish to make). In exchange, Schneider Electric pays the difference into your Personal Account in 12 monthly instalments during the year. As well as getting tax relief at your highest rate on the difference, if you are subject to National Insurance (NI) you also get a slight increase in your take home pay because you pay less (NI). As part of its Better Living ethos, Schneider Electric pays its NI savings directly into your Personal Account for your benefit as well. Not all employers do this. Paying by Salary Deduction If you opt out of Salary Exchange your contributions will be deducted from your salary each month, before it is paid to you. You will still get tax relief but you won t get the extra benefit of any NI savings. You are free to opt in or out of either payment method. A WORD OF WARNING... Although Salary Exchange is normally advantageous, it is not best for everyone. For example, if you receive certain earningsrelated State Benefits or are on, or close to, the minimum wage you may be better off paying in by Salary Deduction. You can find out more at: Regular Company contributions While you are an active member, Schneider Electric also pays money into your Personal Account. How much will depend on how much you are contributing yourself. Your Trust Benefit Summary shows how much Schneider Electric will contribute. Lump sum payments At the Company s discretion, you may be allowed to top up your Personal Account with lump sum payments - for example bonuses. Any allowed payments would qualify for tax relief at your highest marginal rate but would not attract Company contributions or NI relief. Transfer-in payments If you already have other pension savings, maybe from a different job or a personal plan of your own, you can transfer them all into this Trust if you wish. Transfers-in may not be best for everyone, so it is best to seek Independent Financial Advice before taking any action. Combining different pensions into The Trust may have the following advantages: You may reduce the overall cost for administering and investing your savings, so your money has more chance to grow. It may be easier for you to keep track of all your retirement savings because they are all in one place. You will be able to use The Trust s valuable at retirement service on your combined pension savings, to help you more cost-effectively arrange all the benefits you need. The Trust makes no charge for transfers, so if it sounds attractive, here s what to do: 1. Log into My Account and use the Pension Calculator to see if you would be better off by transferring into The Trust - compared to leaving the funds where they are. 2. Check with your current pension provider to see if they charge for transfers out. 3. Take expert opinion to make sure you won t lose any retirement benefits or important options by transferring. See, Independent Financial Advice on page If you decide to go ahead, simply complete the Transfer-in Form from My Account or the Help Desk. The Trustees will contact your other pension arrangement/s and let you know when everything is completed (there is no charge for this)

9 Managing your savings online with My Account Benefits if you die while you are a member If you have access to the Internet, you can view and manage your Personal Account using The Trust s secure online service called My Account. When you join The Trust we encourage you to complete a Nomination of Beneficiary Form and keep it up to date as the years go by. This way The Trustees will know exactly who you want the money to go to - and how to find them. My Account gives you access to your: Personal details - your name, National Insurance (NI) number, date of birth, the date you joined Schneider Electric, the date you joined The Trust, your target retirement age (TRA), your salary and whether or not we hold a completed nomination form for you and, if so, the date it was received. Savings and investment details - a summary of your total savings (total Personal Account fund value), your contribution history, details of the investment funds linked to your savings and a full Benefit Statement history. You can use My Account to alter your investment choices, amend your target retirement age, check if your savings are on track, do What if? calculations to help you plan for the future. Document library - copies of all the leaflets, forms and other paperwork related to The Trust and your Personal Account. Plus a Glossary defining all the terms used in The Trust documents. Powerful planning tools - and other information that will help you understand and consider all the important aspects of achieving a better retirement outcome for you. Like online banking - you have access 24/7 Value of your Personal Account The value of your Personal Account as at the date of death will be paid to your Dependant(s) or nominated beneficiaries by The Trustees at their discretion. If you die before age 75 - the cash will be paid as one or more tax-free lump sums. If you die at or after age 75 - the cash would be taxed at your beneficiary s marginal rate of income tax (45% tax if paid in one lump sum before April 2016). If they in turn die before using up the whole value of your Personal Account, any balance will pass to their beneficiaries. NOMINATION OF BENEFICIARY FORMS You can download these from My Account or get copies from The Help Desk

10 Leaving early Regulation If you stop paying contributions you will no longer be an active Member of The Trust, and Company contributions will stop. What happens to the pension savings built up in your Personal Account is up to you - there are two options: 1. Transferring to a new pension scheme You can transfer your savings out of The Trust and into another pension scheme. Your transfer value will include all the contributions made by you and Schneider Electric, plus any investment growth or minus any loss. 2. Keeping your pension savings within The Trust You can keep your Personal Account invested under The Trust and continue to benefit from future investment performance. Its value will then be available to provide either your pension benefits when you retire (see the Retirement Guide), or a transfer value if you later decide to move to another pension scheme. If you remain invested in The Trust your pension savings can go up or down. Relevant fund charges will continue to be deducted from your Personal Account which will affects its value and your eventual benefits. If you move or leave the Company Please help The Trustees to keep in touch with you by advising The Trust Administrators about any changes of address. Alternatively, you can update your details online at My Account or by phoning The Help Desk. For more details about leaving early, please see your Benefit Summary. If you leave the Company you can take your pension savings with you Standard information from The Trustees. Assignment You cannot assign your benefits or entitlements from The Trust in any way, for example as security for a loan. Trust Amendment or Discontinuance Schneider Electric has every intention of continuing to contribute to The Trust but it does reserve the right to alter (with The Trustee s consent) or discontinue its contributions at any time. Tax, NI and legislation Any reference to taxation, National Insurance and legislation in this Trust Guide is correct at the time of going to print. The Trust is registered with HM Revenue & Customs (HMRC); the effect is that: The investment income of The Trust is mostly tax free. A quarter of the Personal Account can be taken tax free. Limits and tax implications Annual Allowance: You can contribute up to 100% of your taxable earnings to The Trust. There is a limit to the total contributions that qualify for tax relief. This limit, known as the Annual Allowance, relates to the combined total of all contributions or benefit accrual in a tax year. For 2015/16, the Annual Allowance is 40,000 pa. This amount is usually reviewed each year by the Government. If you don t use all your Annual Allowance in any year, you may be able to carry it forward and make larger contributions the following year. The Annual Allowance does not apply in your last year before death or ill health retirement. For more details visit The Trust website at www. Salary Exchange (also known as Salary Sacrifice): If you choose to contribute by Salary Exchange please note your taxable pay cannot reduce below the National minimum wage. If this affects you, PeopleLink will contact you. Lifetime Allowance: There is a limit on the amount of tax efficient benefits you can receive in retirement. This limit, called the Lifetime Allowance, includes the total value of most pension schemes (except State Pensions). If the total value of your Personal Account at retirement + the value of any other pension arrangements you might have equals more than the Lifetime Allowance at that time, you will be responsible for paying tax on the excess. See www. for more details. Divorce or Civil Partnership Dissolution If you get divorced or dissolve a Civil Partnership, the Court may take your pension benefits into account when agreeing a financial settlement. The Court may: Offset your pension against other matrimonial assets, leaving your Personal Account unaffected, or Issue an earmarking order (a portion of your Personal Account is earmarked for your former partner to use at retirement), or Issue a pension sharing order (the pension is split between you and your former partner so you receive less). If any orders are issued, we will let you know at the time how this order will be applied

11 Disclosure of Information As a member of The Trust, you and your beneficiaries have the right to information and documents about The Trust, all of which can be accessed via co.uk, including: The Trust Guide The Investment Guide Investment Fund Factsheets News Updates. Trust Deed and Rules Trustees Annual Report & Audited Accounts Statement of Investment Principles The Trustees will provide annual benefit statements at the end of each Trust Year which runs from 1 April to 31 March. These will be available to view on My Account where you can also check the value of your savings throughout the year. An Annual Report will be made available on request. Disputes If you have a query about The Trust, the Trust Administrators will normally be able to resolve it. However, in the unlikely event of you being dissatisfied with the response you receive, The Trustees have established a 2 stage complaints process. Complaints can be made by you or any surviving beneficiaries after your death. Complaints should normally be made within 6 months of the event that led to the complaint. If you stop being a beneficiary of The Trust, you must raise any complaint within 6 months of the date you stopped. Making a complaint Step 1: You (or your representative) may contact the Schneider Electric HR Services Manager at: PeopleLink Team Schneider Electric Limited Stafford Park 5 Telford Shropshire TF3 3BL You must give your name, address, date of birth, NI number and provide a full explanation of your complaint and as much supporting information as possible. The HR Manager will acknowledge receipt of your complaint and aims to provide you with a full written reply within two months. If that is not possible, you will be sent an interim response explaining the reason for delay and confirming when a full reply will be ready. Step 2: If you do not agree with the Step 1 decision, you (or your representative) may contact the Chair of Trustees of The Trust, at the same address above. You should send a copy of the Step 1 decision. You must give your name, address, date of birth, NI number and provide a full explanation of why you remain dissatisfied. The Chair of Trustees will aim to provide you with a full written reply within two months of you making your Step 2 complaint. If that is not possible, you will be sent an interim response explaining the reason for delay and confirming when a full reply will be ready. In any case, The Trustees will make a decision within 4 months. Step 1 and Step 2 complaint outcomes: Decisions on the outcome of a complaint will be sent to you within 15 working days of the decision being taken. The communication will state clearly the decision reached and will refer to any relevant part of The Trust Deed and Rules, or legislation, or any discretion exercised in reaching the decision. If you do not agree with the decision, it will also remind you of your right to take up your complaint with The Pensions Advisory Service (TPAS) and/or the Pensions Ombudsman. It is important to note that the above resolution procedure will stop if a complaint becomes exempt, or if court or tribunal proceedings start or if the Pensions Ombudsman begins an investigation. The Pensions Advisory Service (TPAS) TPAS is available to help you and beneficiaries of pension schemes at any time, in connection with any pension queries and or difficulties which have failed to be resolved with The Trustees or Administrators. Here are their contact details: The Pensions Advisory Service 11 Belgrave Road LONDON SW1V 1RB Telephone: Website: The Pension Ombudsman You may also refer complaints to the Pensions Ombudsman who will investigate and determine any complaint or dispute of fact or law. The services of the Ombudsman are available to assist members, beneficiaries and prospective members. Here are their contact details: The Pensions Ombudsman 11 Belgrave Road LONDON SW1V 1RB Telephone: Website: The Pensions Regulator (TPR) TPR has power to intervene in the running of pension schemes where trustees, employers or professional advisers have failed in their duties to operate the scheme in accordance with legislation. Here are their contact details: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW Telephone: Website: Pension Tracing Service If you have lost track of your pension benefits with an old employer, you can contact the Department for Work and Pensions Pension Tracing Service who will provide you with up-todate address of The Trustees of that scheme. Here are their contact details: Pension Tracing Service Pension Service 9 Mail Handling Site A Wolverhampton WV98 1LU Telephone: Website: Data Protection Act 1998 The Trustees have registered The Trust under data protection legislation. You have the right to check that your personal details held by The Trust are accurate and security is maintained. The Trustees and the Company are regarded as Data Controllers with legal obligations to process data about you for the purpose of administering and operating The Trust and paying out benefits. This may include passing on data about you to The Trust auditor, administrators and other third parties as necessary for running The Trust. Independent Financial Advice Neither The Trustees nor Schneider Electric can give you financial advice. If you want to see a fully regulated and approved Independent Financial Adviser (IFA) about your pension arrangements, you can search for firms near you at: Website:

12 Need help or information? Here s what to do... My Account If you have Internet access you can login to My Account and manage your pension savings online. If you have any difficulty logging in please us. Website: www. SchneiderTrustOnline@xafinity.com If you don t have Internet access, you can manage everything by contacting the Help Desk or writing to The Trust Administrators. PeopleLink For HR Services queries, eg Lifestyle Events, Salary Exchange or Deduction, complaints or to return completed Joining Forms and Nomination of Beneficiary Forms please contact PeopleLink. Telephone: peoplelinkgb@schneider-electric.com PeopleLink Team Schneider Electric Limited Stafford Park 5 Telford Shropshire TF3 3BL Help Desk The Help Desk, provided by The Trust Administrators, will answer your queries and help you manage your Personal Account. Phone: Monday to Friday, 9am to 5pm schneiderdc@xafinityconsulting.com Trust Administrators You can write to the administrators about any aspect of your Personal Account. Address: Schneider Electric DC Trust Trust Administration Xafinity Phoenix House 1 Station Hill Reading Berkshire RG1 1NB THE HELP DESK IS HERE TO HELP Don t hesitate to get in touch if you have any questions or need more information. Our friendly experts will be pleased to assist. 22

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