Trustee Report. Sun Life Assurance Company of Canada 1988 UK and Irish Employee Benefits Scheme 2015 Summary Funding Statement

Transcription

1 Trustee Report 1 Sun Life Assurance Company of Canada 1988 UK and Irish Employee Benefits Scheme 2015 Summary Funding Statement

2 2 This statement is being sent to you on behalf of the Trustees of the Sun Life Assurance Company of Canada 1988 UK & Irish Employee Benefits Scheme. As the defined contribution section of the Scheme was transferred to a Master Trust earlier this year, the Scheme now has only defined benefit liabilities. As you are entitled to a defined benefit pension (also known as a final salary pension) from the Scheme, we are writing to give you an update of the Scheme s financial situation. How do we measure the financial position of the Scheme? As pension schemes run for a number of years, any review of the scheme s financial position can only be a snap-shot (a valuation) based on what is known at a given date. A formal valuation of the Scheme is normally carried out every three years the last valuation was at 31 December This statement sets out the estimated funding position of the Scheme at 31 December Scheme management and member communications The Trustees continue to meet regularly to receive information, discuss the affairs of the Scheme and make decisions. In 2014 the full board of Trustees met six times and had two consultation meetings with the Company. Member forum The Trustees encourage members to contact them. If you would like to put a point of view or suggestion to the Trustees, please contact Julie Andrews, Secretary to the Trustees, who will ensure that issues are put to the Trustee Board on a regular basis. Contact information is shown below: Telephone: julie.andrews@sloc.co.uk Address: Sun Life Assurance Company of Canada (U.K.) Ltd Matrix House Basing View Basingstoke Hampshire RG21 4DZ Finally, if you are a pensioner member with life cover in retirement, please remember to keep your nomination of beneficiaries form up to date. This ensures the Trustees have a better picture of your circumstances and wishes in the event of your death. If you need a form, please contact the Scheme Administrator, whose address is shown on page five. Pension increases Pensions were increased on 1 January 2015 in line with the Scheme Rules.

3 3 Defined Benefit (DB) section What is the Scheme s current financial position? The estimated funding position at 31 December 2014 was as follows: 2013 full valuation 2014 estimated funding position Assets 417.0m 491.9m Amount needed to provide member benefits 413.5m 494.5m Surplus/Deficit 3.5m - 2.6m Funding level 101% 99% The Scheme s investment policy The Scheme assets are invested by the Trustees with the Scheme s investment managers with the aim of increasing their value. The Trustees regularly review the investment strategy to ensure it remains appropriate for the Scheme. The Scheme asset allocation at 31 December 2014 was as follows: Scheme funding As the Scheme had a surplus of 3.5m at 31 December 2013, the Trustees and the Company have agreed no additional contributions are to be paid at this time. Full solvency valuation The Trustees are required by law to provide information if the Company were to go into liquidation, and have to wind up the pension scheme. This would involve selling the Scheme s investments and using the proceeds to buy annuities from an insurance company. Hedging portfolio 37% Loans & commercial real estate 25% Asset backed securities 38% The estimated amount needed to ensure member benefits would be paid in full if the Scheme had wound up on 31 December 2013 was 513.0m. With assets of 417.6m there was a shortfall of 95.4m, representing a funding level of 81%. This is for information only and there are no plans to wind up the Scheme.

4 4 Scheme membership The total membership of the Scheme has decreased over the year from 7,604 to 3,432. On 23 June 2015 the defined contribution section was transferred to a Master Trust arrangement with BlackRock. Membership numbers for 30 June 2015 were as follows: Deferred members 1,868 Pensioner members 1,564 Total 3,432 The chart below shows the membership changes and categories over the last five years Deferred members Pensioner members Active members

5 5 Scheme membership Scheme administration The Trustees have delegated the day to day running of the Scheme to a specialist third-party administrator, Capita Employee Benefits Limited. Should you have any questions regarding your pension benefits, please contact the Administrator at the address below: Sun Life Assurance Company of Canada 1988 Scheme, PO Box 2465, Bristol, BS1 9WE slfoc@pensionsoffice.com The trustee group The Trustees are responsible for ensuring that the Scheme is run in line with the Trust Deed and Rules and complies with all legislation. They work closely with their professional advisers and regularly monitor and manage the risks surrounding the Scheme. Helen Brumby Capital Cranfield Pension Trustees Limited 5th Floor, New Liverpool House, Eldon Street, London EC2M 7LA Paul J Davies c/o Sun Life Assurance Company of Canada (U.K.) Ltd Matrix House, Basing View, Basingstoke RG21 4DZ Trustee Chair (Independent Trustee Company appointment) Trustee (Member Nominated Trustee) Robert Payne Sun Life Assurance Company of Canada (U.K.) Ltd Matrix House, Basing View, Basingstoke RG21 4DZ Trustee (Company appointment)

6 6 Other information Additional documents and information available on request Annual Benefit Statement Annual Report and Accounts Actuarial Valuation Report Cash Equivalent Transfer Value (CETV) Scheme Booklet Schedule of Contributions Statement of Investment Principles If you are not receiving a pension, you can ask the Administrator for a statement that gives you an illustration of your estimated pension at retirement. Details the Scheme s income and expenditure over the scheme year. Is the Actuary s full report on the Scheme s assets and liabilities and the recommended contribution rate. You are entitled to one free defined benefit transfer value each year. A charge will be made for any additional requests. You should have been given a copy of this when you joined the scheme but copies can be provided on request. This shows how much money is being paid into the Scheme. Explains how the Trustee invest the money paid into the Scheme and its existing assets. How is my pension protected? Pensions Protection Fund (PPF) became operational on 6 April The purpose of the PPF is to pay compensation to members of eligible defined benefit (final salary) pension schemes, when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme to cover PPF levels of compensation. How much compensation does the PPF pay? The PPF pays two levels of compensation. The level of compensation will depend on your membership status. The actual amount a member will receive depends on when they retire and how much benefit they have earned. Compensation will be at 100% if you: Had reached the Scheme s Normal Pension Age; or Are receiving a survivor s pension. Compensation will be at 90% and subject to the Compensation Cap* if you: Are below the Scheme s Normal Pension Age. In all cases, any part of the compensation resulting from pensionable service on or after 6 April 1997 may increase in line with inflation up to a maximum of 2.5%. Any part of the compensation resulting from pensionable service before 6 April 1997 will not increase in payment. * Further information and guidance is available on the PPF s website at:

7 7 Section 251 of the Pensions Act 2004 The Trustees of the Scheme, at the request of the participating employers, have agreed to pass any necessary resolution under section 251 of the Pensions Act 2004 to ensure that the Scheme s provisions on payment of any surplus funds to the Scheme s participating employers remain as they currently are. This will become effective from 5 April The Scheme Trustees are not giving the participating employers any additional powers, nor are they agreeing to any specific refunds, by passing a section 251 resolution. This note to members constitutes the formal 3 months notice of the Scheme Trustees intention to pass such a resolution under section 251. You need take no action.

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