DSV UK Group Pension Scheme Your pension matters 2016 newsletter. Inside. Part 1 Money Purchase Section. Part 2 Final Salary Section

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1 DSV UK Group Pension Scheme Your pension matters 2016 newsletter Dear Member Welcome to the 2016 newsletter for members of the DSV UK Group Pension Scheme (the Scheme). This edition focuses on the key information from the latest Report and Accounts for the year ended 31 December 2015 and pension changes that come into effect from April Change to your investment options Money Purchase Section members At the start of the year we replaced the investment lifestyle strategies available in the Scheme following the flexibilities announced by the Government, giving you more options at retirement. Therefore, you should try to invest your funds in line with the option you think is best for your circumstances at retirement. You should have received a communication telling you which of the new lifestyle strategies or other self-select funds your pension account was transferred into at the time (for more information see Part 1). Why not log into the new-look website and see where you re invested, change your investment option if you need to, and tell us what age you plan to retire from the Scheme. For more information about the investment options please read the investment guide which is also available online. If you ve forgotten your login details, please contact the Scheme Administrator contact details below. Risk management project completed Final Salary Section members I m pleased to confirm that the risk management project I mentioned in the last newsletter is now complete. It involved the Trustee purchasing a buy-in policy from an insurer. The buy-in policy is an investment of the Scheme which aims to reduce risk for the Scheme by the insurer providing an income to the Scheme which can be used to pay members pensions each month. This buy-in insurance policy covers some (but not all) of the Scheme s commitments and it has no impact of the amount of pension payable to members. Yours sincerely Rene Falch Olesen Chairman of the Trustee Your newsletter is split into four parts, so you can find the information relevant to you. Inside Part 1 Money Purchase Section Part 2 Final Salary Section Part 3 Financial highlights for all members Part 4 General information for all members Please contact the Scheme Administrator if you re unsure if you have benefits in the Money Purchase section. Your new look website Visit Get in touch If you have any questions about this newsletter or the Scheme, simply contact: DSV Scheme Administrator Hymans Robertson LLP 45 Church Street Birmingham, B3 2RT Please help us keep in touch with you by telling the Scheme Administrator when you change your address, or if you would prefer us to correspond with you by . 1

2 Part 1: Money Purchase Section Your investment choices The performance of your chosen investment funds will affect how much you have when you retire. Following a review of the investment options available to members under the Money Purchase Section, in January 2016 the Trustee introduced five new lifestyle strategies and changed the names of the individual funds available to you. The name changes will allow the Trustee to update the funds more easily in the future if they believe this is required. Although the funds now have DSV in their name, they still invest in underlying funds managed by Legal & General. The table below shows the five new lifestyle strategies available to members. Lifestyle strategy options Lifestyle Full Cash Lifestyle Balanced Drawdown Lifestyle Annuity Lifestyle Extra Cash Lifestyle Full Drawdown The below table shows how each of the self-select funds currently available to members performed up to 31 March As the newly named funds were only introduced in January 2016, the performance shown is for the underlying Legal & General funds. It should be noted that past performance does not guarantee future returns. name Growth funds Asset class % One year Benchmark % % each year Three years Benchmark % each year DSV Global Equity Equities DSV UK Equity Equities DSV World (ex UK) Equity DSV Emerging Markets Equity Equities Equities DSV Consensus Mix DSV Diversified * Mix LGIM Diversified ** Mix Protection funds DSV Retirement Income * Bonds DSV Gilts Bonds DSV Index-Linked Gilts Bonds DSV Annuity Bonds DSV Cash Cash ! * These funds do not yet have a full year s track record. 1 year performance will be reported in next year s newsletter. **This fund is no longer available to members from January If you would like further information on fund performance, charges and your investment strategy please contact the Scheme Administrator. 2

3 Part 2: Final Salary Section matters Reminder the Scheme s funding level You should have received your Summary ing Statement. It s essentially an update setting out: how much money the Scheme needs to pay members benefits; and how much of that money the Scheme actually had at a certain point in time (known as the funding level). In summary: Date 31 December % 31 December % 31 December % ing level As you can see the funding level is lower than it was in 2013, but started to recover by The recovery was largely due to employer contributions paid into the Scheme and the buy-in policy purchased in June 2015 (explained on page 1). Investing the Scheme s money All investment decisions are made by the Trustee with the help of professional advisers. The Trustee s investment strategy is set out in a Statement of Investment Principles, copies of which are available on request from the Scheme Administrator. As at 31 December 2015, the money in the Final Salary Section was invested with the fund managers and an insurance company as follows: UK equities Absolute return Fixed interest bonds and gilts Cash Insurance policies 37.3% 20.9% 38.3% 1.9% 1.5% 3

4 Part 3: Financial highlights for all members Financial highlights The accounts show how much money was paid into different sections of the Scheme and how much was paid out by the Trustee. They were audited by Grant Thornton UK LLP. The auditors of the Scheme have confirmed that in their opinion the Scheme s financial statements give a true and fair view of the financial transactions of the Scheme during the year ended 31 December 2015 and of the position at that date of the Scheme s assets and liabilities. Money Purchase Section Trustee accounts for the year ending 31 December 2015 Value at 31 December ,629,147 + What came into the Scheme Company contributions 459,736 - What Members contributions 500,378 Change in market value of investments 308,712 Interest 158 came out of the Scheme Retirement lump sums ( 55,059) Transfers out ( 56,199) Annuities purchased ( 91,913) Transfer between Sections ( 428,222) Value at 31 December ,266,738 Final Salary Section Trustee accounts for the year ending 31 December 2015 Value at 31 December ,512,059 + What came into the Scheme Company contributions 2,100,000 - What Term insurance claims received 137,040 Investment income 773,636 Change in market value of investment 105,041 Transfer between Sections 428,222 came out of the Scheme Pension payments ( 1,654,096) Retirement lump sums ( 777,090) Death benefits ( 29,175) Annuities purchased ( 47,219) Individual transfers out ( 686,490) Administration and investment manager expenses ( 117,173) Value at 31 December ,744,755 4

5 PART 4: General information for all members The new flat-rate State Pension is now in place If you reached State Pension age on or after 6 April 2016, you will receive the new flat rate State Pension. This replaces the Basic State Pension and State Second Pension ( S2P ). The flat rate State Pension is currently a a week. The amount you receive may be a little lower if you weren t originally making payments towards the S2P this was known as contracting out. To find out more, including how much you might receive from the flat rate State Pension, visit How much can I save tax-free towards a pension? Annual allowance is the maximum amount you can save towards your pension each year and still benefit from tax relief. It was previously set at 40,000, but from April 2016: If you have a taxable income (including pension contributions and benefits) of over 150,000, your Annual Allowance will decrease from 40,000 using a sliding scale. If your taxable income (including pension contributions and benefits) is over 210,000 a year, the Annual Allowance will be limited to 10,000. Lifetime Allowance is the maximum amount you can save towards your pension over your whole lifetime without incurring additional tax penalties. From April 2016, the Lifetime Allowance is set at 1 million. You ll be taxed on any pension savings above this amount. If you think you might be affected by these changes you can seek financial advice. You can find an adviser at Trustee Insights Gary Kioussis Gary first joined our Trustee Board in 2002 so has a great deal of expertise to bring to the Trustee Board. We re pleased to confirm that Gary was re-elected to continue in his role as a Member Nominated Trustee in June 2015 for a further four-year term. I wanted to continue in my role for multiple reasons. In recent years, there has been no shortage of news articles written about this subject and everyone s awareness has been greatly heightened by some high profile cases of pension funds beings mismanaged. This, in addition to the increasing amount of legislation surrounding this most valuable of assets, made me feel that it is important to keep the continuity of knowledge within the Trustee group. An individual s pension is, in the majority of cases, the main source of income when they retire and it s important that the Trustee Board have a good understanding of how pension funds are managed and can help to protect members interests. The Trustee Board and its advisers who look after our Scheme have a wealth of knowledge and I am privileged to be a part of it. I feel that I am contributing to ensure that it continues that way, not least because the day that I will look to draw my own pension is getting ever closer! 5

6 PART 4: General information for all members Who runs the Scheme? Trustees managers Employer Nominated Trustee Member Nominated Trustee Money Purchase Section fund managers Final Salary Section fund managers Rene Falch Olesen Alan Burnet Legal & General Assurance Pyrford Gary Ridsdale Frank Hall Jesper Hansen (since January 2015) Andrew Cheeseman (PAN Trustees Limited independent trustee) Gary Kioussis Yvonne Tabberer (Pensions Management) Limited Zurich Assurance Limited Aberdeen Asset Management Equitable Life Assurance Society Baillie Gifford Legal & General Assurance (Pensions Management) Limited Invesco Perpetual Prudential Plc Phoenix Life Group Independent professional advisers: Actuaries Administrators Annuity Broker Auditors Bankers Legal Advisers Hymans Robertson LLP Hymans Robertson LLP Origen Financial Services Grant Thornton UK LLP Barclays Bank plc Eversheds LLP and Squire Sanders Hammonds Principal employer: DSV Road Holding Limited, Scandinavia House, Parkeston, Harwich, Essex CO12 4QG Useful pension websites Find out more about your pension and access great resources, like online videos and a retirement calculator. For a list of financial advisers in your area. If you are thinking of leaving the Scheme for any reason, we recommend that you seek financial advice first. There may be a charge for any advice, which you will be responsible for paying. Find information about retirement planning and tax, as well as general public services. The Department for Work and Pensions tracing service has now gone online. If you have lost contact with a former pension scheme and believe you are entitled to benefits, please visit the above website. If you re retiring soon, Pension Wise is a free and impartial service provided by the Government to help you understand what your retirement. You can visit the website or call the helpline: For more tips on building a better retirement and how to take the next step 6