winter 2015/2016 Member Nominated Director results State Pension changes Investment matters Fund finances Getting help

Transcription

1 winter 2015/2016 Member Nominated Director results Investment matters Fund finances State Pension changes Getting help

2 Contents A message from Tony Ashford 3 The membership 4 Fund Finances 4 MND results 5 Investment matters 6 Defined benefits 6 State Pension 7 News in brief 8 Pensioners Association 9 Getting in touch 10 Getting online - My Pension 10 2

3 Bringing you the latest news This edition of pensions focus provides a summary of the Scheme s finances taken from the latest Annual Report & Accounts for the year ending 31 December This edition of pensions focus provides a summary of the Scheme s finances taken from the latest Annual Report & Accounts for the year ending 31 December 2014.(you ll find the full report in the library under Other information section) and bringing you up to date with other news, such as: Member Nominated Directors the results of the recent elections to the Trustee Board. How your pension increases a reminder that you should be hearing from the Trustee now. Investment matters a brief look at the economy and how the Scheme s defined benefits investment funds performed. State Pension looking at the changes for anyone reaching State Pension age after 5 April Pensioners Association what it s got to offer if you re thinking about becoming a member has been a challenging year for the Trustee Board. Not least, new pension freedoms were announced in the Budget 2014 which came into effect on 6 April 2015 and major changes were made to the Scheme for all active members from 1 July. Also as a result of the banking reforms, in June 2015 Antonio Simoes, CEO for HSBC Bank plc announced the creation of the new service company structure - HSBC Global Services (UK) Ltd in September. So, what were the highlights for the Scheme in 2015? Well, in January Elizabeth Renshaw-Ames joined the Pension Scheme Executive (PSE) as Trustee Chief Executive Officer. The PSE and the Trustee have worked hard, together with colleagues in the Bank, to implement the Scheme Benefit Change programme. This was a significant project which was completed on time and on budget. Our current focus is the completion of the actuarial valuation, this is undertaken every three years and this time we base it on the position of the Scheme as at the end of December And, what are the priorities in 2016? One of the Trustee s strategic priorities for 2016 is to develop engaging and helpful communications for our Scheme members and to that end we would welcome any feedback from you about how our communications could be improved from your perspective. Please send any feedback to pensionschemeexecutive@hsbc.com. Tony Ashford Trustee Chairman 3

4 Members count This is how the members made up the Scheme on 30 September 2015: Active 48,102 Deferred 99,915 Pensioner 42, ,000 40,000 60,000 80, ,000 Taking a look at the finances This is the money that when in and out of the Scheme in the 12 months to 31 December You ll find the full Annual Report & Accounts under Other information section of the library. DB s DC s Total DB & DC s Market value of the Scheme as at 1 January ,937,478 1,707,959 20,645,437 Money in Contributions 262, , ,143 Transfers in ,907 19,041 Other income Investment income 412, ,261 Total income 674, , ,562 Money out Benefits (559,898) (3,510) (563,408) Payments to leavers (35,973) (32,290) (68,263) Administration and investment expenses (47,080) (2) (47,082) Total expenditure (642,951) (35,802) (678,753) Plus change in market value of assets 3,574, ,470 3,732,548 Transfers between sections 7,777 (-7,777) - Total net assets of the Scheme as at 31 December ,551,062 2,051,732 24,602,794 4

5 The results of the Member Nominated Director election Recently, two vacancies to become Member Nominated Directors (MNDs) of the Scheme have been filled. One hundred and forty four active members of the Scheme applied for the roles and nine were selected to put themselves forward for election. Of the 46,125 active members eligible to vote, 4,933 did so, a turnout of 10.69%. The results of the election are that Richard Dixon has been elected MND to the Trustee Board from 1 December 2015, and Anne Lonsdale re-elected from 1 March Both will be on the Trustee Board for five years. You can see who all the Trustee Directors are here. Look out! Towards the end of 2016, we ll be contacting you about a Member Nominated Director pensioner vacancy so look out for more information nearer the time. A reminder - your pension increases It s that time of year, if an annual increase is due to be applied to your pension it s paid from 1 January and you should ve received a letter from the Trustee. The letter tells you what the increase is for the following year and how it s applied to your pension. The leaflet Your 2016 pension increase in Other information section gives you a brief summary of how the increase works. The Government is changing the way the State Pension works for anyone reaching State Pension age after 5 April You can read more in the section Changing the way the State Pension works. 5

6 Investment matters Focusing on the economy a look back Global Equities went up throughout This was helped by improving US economic data, healthy corporate earnings and the US Federal Reserve promising to be patient when looking to increase interest rates. Central Banks in Europe, Japan and China continued to increase money supply into the markets which in turn helped boost Equity markets. Nearly all Corporate Bond markets continued their impressive run, mainly due to lower government bond yields and easing monetary policies. Property also performed strongly, both globally and in the UK, while Commodities (like gold and oil) fell because of growing supplies and weak demand. It was the fourth year in a row commodities declined. Between 1 January 2015 and 30 September 2015 most asset classes have gone through a difficult period. The performance of the global equity market was negative due to a number of factors including uncertainty in European financial markets, fears over a slowdown in economic growth, (mainly due to China) and the Greek debt crisis. UK equity markets also underperformed. Emerging markets were particularly affected by continually low commodity prices, disappointing manufacturing data from China and slumps in Russian and Brazilian stock markets. Elsewhere, gilts were broadly level, with significant losses in Q2 (as a result of a slump in German bonds and a lack of liquidity) offset by positive performance in Q1 and Q3. Globally and in the UK, property performed strongly. Commodities continued to perform badly and are down 37% since September last year. 6 Defined benefits how the assets are invested On 31 December 2014, the total market value of the Scheme s defined benefit assets 22.5bn. These are spread across 20 managers and invested in a broad range of funds, the breakdown opposite shows how these were split on that date and there has been little change since. The last formal valuation of the Scheme as at 31 December 2011 showed the funding level was 100%. The next formal valuation is due as at 31 December 2014 and is currently being undertaken. Once the valuation is completed the Trustee will update you on the results. Funds % Equity 13.4 Private Equity 2.6 Property 4.6 UK Government Bonds & Swaps 36.3 UK Corporate Bonds 9.7 Global Government Bonds 5.3 Global Corporate Bonds 21.7 Cash 2.6 Alternatives 3.8 Total 100.0

7 Changing the way the State Pension works Anyone reaching State Pension age after 5 April 2016 will have their State Pension calculated in a different way. A single tier State Pension is being introduced and this will normally build up over 35 years of qualifying National Insurance contributions. This is replacing the current State Pension which is made up of three parts: the basic State Pension, the earnings related State Second Pension, the means-tested Pensions Credit. The base amount of the single State Pension will be a week. However, the amount of State Pension under the new system could be higher or lower depending on the individual s National Insurance record and whether they ve previously been contracted-out of the State Second Pension (either through the HSBC Scheme or during previous employment). Most Scheme members who have defined benefits were contracted-out of the State Second Pension before 1 July This meant the employee and employer paid lower National Insurance contributions so little or no additional State Second Pension was being built up. This being the case members will have a deduction applied to their State Pension reflecting their contracted-out National Insurance record. A deduction may also apply for contracted-out periods under a previous employer s arrangement. If you want to find out how much State Pension you re likely to get go to: There s also more information about the new State Pension arrangements at: If you reach State Pension age before 6 April 2016 these changes don t affect you. 7

8 Latest news In June 2015, Antonio Simoes CEO for HSBC Bank plc announced some changes to the structure of HSBC in the UK. At the end of September 2015, HSBC established a new service company structure, HSBC Global Services. This means that the Scheme which is made of defined benefits (DB) and defined contribution (DC) benefits now has two legally segregated sections: the HSBC Bank section and the HSBC Global Services (HGSU) section. Employees who are active members of the Scheme are employed by a participating employer in either the HSBC Bank section or HGSU section. What s important to note is that there have not been any changes to Scheme benefits. 8

9 On behalf of the HSBC Bank UK Pensioners Association If you re not a member of the Pensioners Association here s a reminder of some of the benefits it offers: Meeting former colleagues and friends through: - organised regional activities including subsidised lunch, and - an invitation to the Association AGM and annual national lunch (alternately in London or the provinces). Representation to HSBC on matters that affect your pensions. The Pensioner Today magazine which you ll receive is issued three times a year. Regular updates about the Bank Workers Charity. Access to the website, which includes news items, helpful information, find- a-colleague facility and much more. The Pensioners Association makes a small charge of 10 a year to help maintain the benefits of being a member. If you want to know more you can: - Contact Alan Cull on , or - membership@hsbcpensioners.org or - Visit where you can join online. The Pensioners Association is completely separate from our Scheme. 9

10 Getting in touch Your feedback is important to the Trustee because it tells us what you want to know about and how you want to receive it. If you have any comments or suggestions for future editions of pensions focus, please at: Alternatively, you can write to Trustee via: The HSBC Administration Team Towers Watson Limited PO Box 652 Redhill Surrey RH1 9AL My Pension online Do you need to print off past pension payslips? Go to: click on My Pension You ll need your user ID which is HSBC + your 8 digit employee ID + the year you were born. So, if your employee ID was and you were born in 1946, your user ID is HSBC And you ll need to know your password but if you can t remember you ll see you can choose forgotten password. In My Pension, we d like you to tell us your mobile number and personal address so we can contact you with pension information that s just relevant to you. Issued by the HSBC Bank (UK) Pension Scheme (the Scheme) HSBC Bank Pension Trust (UK) Limited, 8 Canada Square, London, E14 5HQ Registration number: Copyright HSBC Bank Pension Trust (UK) Limited All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank Pension Trust (UK) Limited. Members of the pension scheme may, however, copy appropriate extracts in connection with their own benefits under the Scheme. January Pensioner Edition