Group Personal Pension Plan. Speaker: Vanessa Crewe-Yalcin

Transcription

1 Your journey Progress to Rail a Services brighter future Group Personal Pension Plan Speaker: Vanessa Crewe-Yalcin 1

2 Important information Please note that the following presentation should not be regarded as giving any form of investment advice. The value of the Progress Rail Service Group Personal Pension Plan is not guaranteed and can go up and down depending on investment performance. You could get back less than you ve paid in. Tax rules may change. The value of any tax relief depends on the financial circumstances of the investor. Key Features leaflets and other literature for any Friends Life products mentioned will be available on request. You may have heard that we are changing our name to Friends Life. During this transition you may see both Friends Provident and Friends Life being used for a short time while all our systems are being updated. We apologise in advance for any confusion this may cause. To find out more about Friends Life please visit 2

3 What we will cover today Your Plan Investments Managing your account Frequently asked questions 3

4 Your Plan 4

5 Your Plan Personal account Portable Contracted in to the State Second Pension Annual management charge 0.32% for index funds If you invest in externally managed funds, the charges may be higher than this figure Choices at retirement 5

6 Your Plan Tax relief example Extra 20% (higher rate tax payers) 20% (for most people) Your contribution Tax rules may change. Tax year 2011/12 If you don t normally pay income tax, you can still get tax relief, but only on contributions up to a maximum amount in each tax year ( 3,600 in 2011/12) 6

7 Your Plan What Progress Rail is doing for you? Progress Rail Services has researched the market Negotiated a competitive annual management charge 0.32% Deducting contributions from your pay Paying into your plan Life cover* *Life cover not provided by Friends Life 7

8 How your Plan works before retirement Progress Rail Services contributions Your contribution paid via salary sacrifice Your Pension Account Potential Investment Growth 8

9 How your Plan works at retirement Up to 25% Tax-free cash Your Pension Account Remainder of the value of the Pension Plan buys a pension income, or annuity, at retirement The amount of pension depends on how much you pay in, how long you invest for, how well the investments perform, the charges we take and annuity interest rates at the time you retire 9

10 Your journey to a brighter future Investments 10

11 Investments 1 You are automatically invested into the Lifetime Investment Programme 2 On receipt of your policy documents, check your level of risk 3 Switch or redirect your funds free of charge 11

12 Investment Types and Risk High return Cash Fixed interest Property Shares Low return Low risk High risk For illustrative purposes only. 12

13 Investment choices No investment decision made Self select Hands off approach Ready-made investment option Fund manager decides split of investments Hands on approach Wide choice of funds* (both active and passive) You decide split of investments Lifetime investment programme Lifestyle investment programme 13 *Choose up to 10 funds at any time

14 10 Year Lifetime Investment Programme Target % invested in fund 100% 80% 60% 40% 20% 0% Years to retirement Investment programme retirement date FP BlackRock (50:50) Global Equity Index (Aquila HP) FP BlackRock Over 15 Year Gilt Index (Aquila HP) 14 FP BlackRock Institutional Sterling Liquidity Fund

15 Investment Risks Risk band High + High High Medium + Medium Medium Low + Low Your approach to investment risk As a very adventurous investor, you will accept much higher risk for the prospect of much higher returns. You're an adventurous investor willing to accept high risk for the prospect of high returns. As an adventurous investor, you will accept above-average but below high risk for the prospect of high returns. You prefer a balanced approach to investment and are willing to accept above-average risk in the hope of higher returns. You prefer a balanced approach to investment and are willing to accept average risk to achieve more attractive returns. You will accept below-average risk to achieve more attractive returns. Although a cautious investor, you're prepared to accept low levels of risk for the prospect of slighter higher returns You're a very cautious investor and are willing to take a minimal amount of risk only. The colours used in this table may be different to those used online, however the bands and approach 15 to investment risk remain the same.

16 Investment Risks Risk Investment Volatility Inflation Annuity Price 16

17 Investment - styles Active Funds Active funds are actively managed and invest in a portfolio of shares chosen by the Active fund manager. They are suitable for those who are prepared to risk short-term volatility for the prospect of higher longterm returns. Tracking funds (also known as passive funds) invest in the companies of a particular market, for example the FTSE100 Tracking Index, and or passive aim to match funds (index the return funds) of the market they track. They are suitable for those who are happy with a fund that doesn t aim to outperform the index it tracks, only to follow it. 17

18 Choosing a strategy When do you intend to retire? Are you looking What for long are term your objectives? growth? Consolidation? Some people are cautious, others willing to take more risk to get a better return Generally, most Decide people your want approach to take less to risk risk as they get closer to retirement 18

19 Choosing a strategy For example you may wish to manage your pension investments so that you: Invest in riskier funds (with the objective of providing growth) but which have the scope for excellent returns but also for sharper falls when you are younger and Switch into lower risk funds (with the objective of providing protection) which tend to have less extreme returns or losses as you approach retirement Your strategy, the period over which you switch from higher risk to lower risk funds and the funds you select will depend upon your approach to investment risk and your personal objectives. 19

20 Important Information Please remember the value of an investment is not guaranteed and can go up and down depending on investment performance. You could get back less than you ve paid in. Property funds mainly invest in commercial properties which are not easy to sell. In exceptional circumstances, we may need to delay the cashing in or switching of units in the fund. You may not be able to access your money during this period. This does not apply at your selected retirement date or on death, At times a fund may need to change the way its price is calculated, to ensure that those moving into, and out of the fund, are treated fairly. This can have a negative effect on the funds price and performance. 20

21 Important Information Where a fund invests overseas, the value can go up and down simply because of changes in currency exchange rates. Fund managers have the ability, in exceptional circumstances, to suspend trading in their funds for as long as necessary. When this occurs we may need to delay the cashing in or switching of units for a particular fund. You may not be able to access you money during this period. In addition, for some funds there are also additional expenses which are taken directly from the underlying fund. This may have the effect of increasing the overall cost of investing in a particular fund. No advice on investments has been given to you. If you have any doubts whether the plan is suitable for your needs, you should contact a professional adviser for advice on investments. 21

22 Your journey to a brighter future Joining and Managing your 22 account

23 Joining the Plan Read all the information in your booklets Existing members - Automatically enrolled into the plan New members can return your application form to HR now, but you will automatically be enrolled into the plan 1 st September (may opt out) You will receive a member confirmation statement Right to cancel 30 days First contribution is deducted from salary Policy documents are sent to your home address 23

24 Managing your account-online Internet access View & print real time statements Change personal details Alter investment choice Investment fact sheets Pensions calculator eforecaster Risk-profiler efunds Financial Toolbox efinance Member education elearn & etutor 24

25 Managing your account Friends Life helpline (Mon-Fri 8.30am-6pm) Real time account information Change personal details Alter investment choice Request nomination forms Transfer request Friends Life,PO Box 1550,Milford, Salisbury, SP1 2TW Human Resources 25

26 Your journey to a brighter future Frequently asked questions 26

27 Frequently asked questions 1 plan? Can I transfer previous pensions into this 2 What happens if you leave? 3 What happens if you die? 27

28 Summary Valuable employer contributions Tax relief and National Insurance savings Wide range of funds Competitive charges Direct from salary 28

29 Thank you very much for listening? 29

30 Useful Contact Details & More Information Vanessa Crewe-Yalcin Financial Education Development Manager Friends Life Member Helpline (Tel: ) Friends Life One New Change London EC2V 7AN Mobile IFA Promotions - The Pension Service (DWP) Useful State Benefit Guides Pensionsandretirementplanning The Money Advice Service Her Majesty's Revenue & Customs (HMRC) Tel:

31 31 Appendix

32 32 Managing your pension plan online - Member Summary

33 33 Managing your pension plan online - Transaction Summary

34 34 Managing your pension plan online - Investment Summary

35 35 Managing your pension plan online - eforecaster

36 36 Managing your pension plan online - efunds