Capgemini UK Pension Plan

Transcription

1 Capgemini UK Pension Plan Annual Update Defined Contribution Sections Welcome to the Capgemini UK Pension Plan Annual Update for the year ending 31 March This Update is designed to keep you informed of the Plan s development over the past year and is intended for members of the Defined Contribution Section, Ernst & Young Category 3 and Ernst & Young Category 4 Sections. If you are a member of the In Service Deferred Section, a separate Defined Benefit Section Update has also been prepared. The Plan year in brief The Plan s DC Assets increased from 421.9m to 422.3m. The Plan s total DC Membership decreased from 7,984 to 7,817 members. New retirement options were introduced from April 2015 under Freedom and Choice. Alan Murphy and Hugh Tinsley were reappointed as MNTs, and Norman Buckingham replaced Ken Hillebrandt as a Company Appointed Trustee. Chairman s Review - Plan Year ending 31 March 2016 The Plan year saw the introduction of significant changes to pensions legislation. The Freedom and Choice legislation, which came into effect in April 2015, introduced the flexibility for members of company pension arrangements like ours to draw their defined contribution benefits in almost any form. The Trustees reviewed the new options available and how these would interact with Plan benefits. As a result, a number of changes have been made to the Plan structure giving increased flexibility for members with defined contribution benefits (through both Defined Contribution Section membership and Additional Voluntary Contributions). These changes were communicated to all members in April 2015 and were included in the 2015 Plan Update. The year also saw some changes to the Plan s management team. In May 2015 we sought nominations for the positions of Member Nominated Trustees, and I am pleased to announce that Alan Murphy and Hugh Tinsley were both reappointed to their roles. In February 2016, Ken Hillebrandt stood down from the Trustee board, and was replaced by Norman Buckingham, who is also Head of Pensions for Capgemini UK and Secretary to the Trustees. Towards the end of the Plan year, we began to consider actions that may be required following the outcome of the UK Referendum on membership of the EU (Brexit). Since the end of the Plan year, markets have been both volatile and uncertain, and we have been reviewing the impact on the Plan of the vote to leave the EU. As always, our priority remains to protect the interests of our members, and we will continue to work with our advisers to react appropriately to changes in market conditions. This will be an ongoing process as the future landscape of UK pensions develops. As we begin the 2017 Plan year, which we expect to be as challenging and as eventful as the last, I wish to thank my fellow Trustees for all their hard work over the past 12 months. Tony Fisher Chairman of Trustees

2 Plan Management The Plan is managed by a board of Trustees, with the support of the Capgemini Pensions Team in Woking and a number of professional advisers. Contact details for the Plan administrators are at the end of this update. Trustees The current Trustees of the Plan are: Tony Fisher (Chairman) Tony Winslade Peter Birch Norman Buckingham (appointed February 2016) Hugh Tinsley (MNT) (reappointed May 2015) Alan Murphy (MNT) (reappointed May 2015) Norman Buckingham is also the Secretary to the Trustees and the Head of Pensions for Capgemini UK. He is supported by Brenda Thomas, Assistant Pensions Manager, and Sue Richardson, Pensions and Benefits Officer. Advisers to the Trustees The Trustees are assisted in the running of the Plan by a number of professional advisers as follows: Actuaries and Consultants : Xafinity Administrators : Xafinity Insurers (for death-in-service benefits) : Unum Solicitors : Travers Smith Bankers : Lloyds Bank plc, HSBC plc Auditors : PricewaterhouseCoopers LLP (PwC) Investment Update As a member of one of the defined contribution Sections, you can manage your own investments by selecting from the range of funds the Plan has to offer. The Trustees monitor the performance and suitability of both managers and funds to ensure that these remain appropriate for the Plan to invest in, but the decision as to which funds your contributions are held in is ultimately yours. As your personal circumstances and attitude to risk may change over time, it is important that you review your fund choices on a regular basis, to ensure that they remain appropriate for you. Neither the Trustees nor Xafinity Consulting can offer any financial advice - if you feel that you need help in deciding how to invest your funds, or about your investment choices generally, it is strongly recommended that you seek independent investment advice. You can find a list of Independent Financial Advisers (IFAs) in your area at As mentioned in the Chairman s report, the 2016 Plan year was a challenging one for global investment markets. Unpredictable political events led to a great deal of volatility in many funds, and this will have impacted the values of members Personal Accounts. These values are related to the underlying unit prices of the funds offered under the Plan and can change on a daily basis. You can check the value of your Personal Account at any time by logging on to Compendia. Investment Managers: Legal & General Assurance Society Fidelity Investments Life Insurance Aberdeen Asset Management Baillie Gifford Prudential (AVCs only) Clerical Medical Investment Group (AVCs only) 2

3 Investment Funds and Performance Defined Contribution Section The investment returns for the year ended 31 March 2016 were as follows: 12 months (%) 3 years (% per annum) Fund Benchmark Fund Benchmark Aberdeen Life Multi Asset (ex-property) Global Growth UK Equity Global (ex-uk) Equity Fidelity Life Multi Asset Growth Pensions Global Equity (60:40) Pensions UK Equity Pensions International Equity Pensions Legal & General Global Equity Fixed Weights (60:40) Index * Over 15 Year Gilts Index * Cash * Property UK Equity Index Ethical Global Equity Index North America Equity Index - GBP Currency Hedged Europe (ex UK) Equity Index - GBP Currency Hedged Japan Equity Index - GBP Currency Hedged Global Emerging Markets Equity Index * these funds form the basis of this Section s Lifestyle strategy Prudential With-Profits Fund The latest declared reversionary bonus rate (effective from 6 April 2015) is +2.25%. This means that an investment account will be increased on a daily basis by 2.25% a year compound from 6 April 2015 until further notice. 3

4 Ernst & Young Money Purchase Section (Category 3) The investment returns for the year ended 31 March 2016 were as follows: Legal & General 12 months (%) 3 years (% per annum) Fund Benchmark Fund Benchmark UK Equity Index Fund* World (ex UK) Equity Index Fund* Over 15 Year Gilts Index Fund* Cash* Baillie Gifford UK Equity Core Pension Fund International Equity Fund * These funds form the basis of this Section s Lifestyle strategy Ernst & Young Money Purchase Section (Category 4) The investment returns for the year ended 31 March 2016 were as follows: Legal & General 12 months (%) 3 years (% per annum) Fund Benchmark Fund Benchmark LGIM Blended Fund Trustees Annual Report and Accounts The accounts for the year to 31 March 2016 have been audited by PricewaterhouseCoopers (PwC), the Plan auditors and were signed in October A summary of the accounts and membership movements during the year is set out below. A full copy of the formal report covering the Plan as a whole is available from the Capgemini Pensions Helpline at Xafinity Consulting contact details are shown at the end of this Update. Summary of Accounts 2015/ /2015 ( 000) ( 000) Fund Value at Start of Year 421, ,847 Money Paid into the Plan Contributions 30,554 33,153 Transfers In and Other Income 2,110 2,023 Net Investment Return (11,423) 44,932 Money paid out of the Plan Pensioner and Leaver benefits (inc. Transfers between Sections) (20,897) (12,985) Fund Value at End of year 422, ,970 4

5 Members in the defined contribution Sections Active members at 31 March ,949 Less adjustments (56)* Plus New members during the year 58** Less Retirements (13) Leavers (refunds, deferred, transfers out) (566) Deaths (4) Active members at 31 March ,368 Deferred members at 31 March ,449 Total 7,817*** *Leavers processed after the year end **New members following the closure of the DB Section to future accrual. ***Includes In Service Deferred Members of the Defined Benefit Section Pensions in the News Your Questions Answered There has been a lot about pensions in the press over the past 12 months. We have set out below some common questions which we hope will help. A lot of company pension arrangements seem to be struggling at the moment. Is my pension safe? Many of the pension issues reported in the press are about defined benefit pension schemes. With people living longer and continuing low interest rates, pensions are becoming more expensive to provide and many household name companies are reporting very large pension deficits. Similarly, challenging market conditions have led to some companies becoming insolvent and this creates uncertainty in relation to pension obligations. However, in a defined contribution arrangement like ours, your and Capgemini s contributions are held in your own Personal Account, and this is invested with professional investment managers. These investments are held completely independently of the Capgemini, so in the unlikely event that Capgemini UK became insolvent, the Personal Account that you ve built up would not be affected. I have seen on the news that pensions can now be taken as a cash lump sum can I do this? In April 2015 the laws around certain types of pension benefits changed, allowing more flexible retirement options for individuals over the age of 55. This legislation applied to defined contribution arrangements like the defined contribution Sections of the Plan and the Plan Trustees chose to introduce some elements of this flexibility in April This was set out in last year s Plan update and a separate announcement was issued in April Both documents are available on Compendia. With effect from April 2015, members over the age of 55 may now take their DC Section benefits as a cash lump sum in the majority of cases. Taking all of the pension benefits you ve built up as a one-off lump sum may be the right decision for some people, however the full implications of this option and any tax charges should be fully explored to make sure that it s the right decision for you. We strongly recommend that you take Independent Financial Advice before making any decisions about your pension benefits. 5

6 I ve heard a lot about pension scams in the press. Should I be concerned about my Capgemini pension? The Capgemini Plans are run by a Trustee board, with the support of advisers who are regulated by the Financial Conduct Authority. All of these bodies are audited regularly and subject to tight regulations. If you wish to consider transferring your pension savings to another pension arrangement, you need to be aware of possible pension scams in the marketplace. The Trustees and their administrators have put into place a number of controls to protect our members on transfer, however you can also protect yourself with the following actions: - Be careful if you receive unsolicited cold calls and s offering pension advice. You should only ever take advice from an Independent Financial Adviser registered with the Financial Conduct Authority. You can check the register at - Don t be time pressured scammers will try to complete a deal as quickly as possible, often offering to complete documents on your behalf and courier them to you. Make sure you take your time to understand what you are being offered, and complete the documents yourself. - If any potential advisers approach you suggesting that you can access your funds before age 55, this is likely to be fraud. Under current legislation the earliest that you can access your pension savings is age 55, unless you have an earlier pension age of 50 specifically protected under the terms of your contract of employment. - Check the FCA s list of known scams to see if the arrangement you are being offered has already been identified as a scam at - If you are still not sure, do not transfer. Contact The Pensions Advisory Service (TPAS), a regulated financial adviser or Xafinity if you think you ve been targeted by a pension scam. The Pensions Regulator, the governing body for occupational pension arrangements in the UK has put together a guide for individuals with a reminder of the measures you can take to protect yourself at Does the Plan provide protection for my family in the event of my death? All current employees have a life assurance benefit and, if elected via Flex Choices, there may also be a provision for a dependant pension benefit. If you hold a Personal Account in the Plan, this would become payable as a lump sum benefit on death at any time. These benefits are payable at the discretion of the Trustees, which means that the Trustees will take account of all of the information available to them at the time of death, and make a decision as to whom the benefit should be paid to. Whilst life assurance benefits and your Personal Account can be paid to a fairly wide range of beneficiary, dependant pensions can only be paid to a financial dependent. You can help the Trustees make their decision by completing a Nomination of Beneficiary and, if appropriate, a Nomination of Dependant form, which you can download from your Compendia record, or obtain from the Plan administration team. Whilst the information you provide is not legally binding on the Trustees, they will take your wishes into account when making their decision so you can assist them in this process by giving them as much information as possible. If in doubt, please complete and return an up to date Nomination Form reflecting your current wishes. Keeping in Touch - Useful information Pensions Talent Site The Pensions Talent site can be accessed via the Core Services link on Capgemini s Talent site. The site includes a lot of useful information about the Plan, together with current news items and links to Compendia and the Plan s investment managers. Compendia Your Compendia record contains details of your own benefits, useful Plan documents and announcements relating to Plan changes. You can access your record through MyConnect, the Employee Self Service portal on the Capgemini network, via the Benefits, Pay and Pensions link. If you are not on the Capgemini network, you can log in in with your username and password at If you need a reminder of your Compendia password, please compendiahelpdesk@xafinityconsulting.com 6

7 Contacting the Plan Administrators If you can t find the information you re looking for on the Pensions Talent site or in Compendia, you can contact the Capgemini Pensions Helpline at Xafinity Consulting by phone on or by at capgemini.pensions@xafinityconsulting.com, or by post: Capgemini UK Pension Plan Xafinity Consulting Phoenix House 1 Station Hill Reading Berkshire RG1 1NB Should Xafinity require any input on any issues that arise, they will contact the Company as appropriate. Helpful contacts There are a number of other places you can look for information, and we would encourage you to research your options before making important decisions about your retirement: Financial Advice Before making any important decisions about your pension savings, you should consider consulting an independent Financial Adviser (IFA) who should be able to help you understand the pension options available to you. You should only ever take financial advice from a registered Independent Financial Adviser - you can find an IFA in your area at and check the IFA register at The Pensions Advisory Service The Pensions Advisory Service (TPAS) can provide a range of information about occupational pension schemes. You can contact them on or visit State Pension Guide HMRC provides an overview of the State pension which you should review to understand how this will work for you at If you are: a man born on or after 6 April 1951 a woman born on or after 6 April 1953 there are new State pension rules that will apply to you. These can be found at If you would like an indication of what your State pension might be, you can check this at December 2016 Capgemini UK plc No. 1 Forge End Woking Surrey GU21 6DB Tel: Fax: Pension Wise The government has set up a service to provide guidance to individuals aged over 50, with defined contribution pension benefits. Go to for more details. Registered Office: Capgemini UK plc, No 1 Forge End, Woking, Surrey, GU21 6DB Registered in England Number