Member Guide Arriva Workplace Pension Plan

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1 Arriva Workplace Pension Plan I'm dreaming of taking up deep sea fishing

2 This member guide is designed to help you understand the Arriva Workplace Pension Plan so you can make decisions that are right for you and your future. The Arriva Workplace Pension Plan is a Group Flexible Retirement Plan provided by Standard Life. If you would like more information, please contact Standard Life on (calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.) or visit

3 Contents Welcome 2 1: Is the plan right for me? What does my future look like? 4 What decisions do I need to make now? 6 2: How much must I pay in? How much must I pay in? 8 How much should I pay in? 9 Tax efficient savings 10 Paying by salary sacrifice 11 3: How can I invest my money? What happens to my payments? 12 My investment options 13 Other information What happens when I retire? 16 Next steps 18 Laws and tax rules may change in the future. The information in this guide is based on our understanding in April Your personal circumstances also have an impact on tax treatment. 1

4 Welcome Arriva has set up the Arriva Workplace Pension Plan (we'll refer to it as 'the plan' in this guide), with your pension provider Standard Life, to help you save for your future. It s a great way to help you make sure that life after work is on your terms and you get the retirement you want. When you save into the plan, you may get extra payments from Arriva and you may qualify for tax benefits from the government. Even if you re not automatically enrolled, you can still apply to join. What happens next? We want you to get the most out of the Arriva Workplace Pension Plan and suggest you ask yourself three questions: 1. Is the plan right for me? After you've joined the plan, you can stop paying in at any time, but remember your pension is a long-term investment designed to help you save for retirement which means you usually can't access your fund until you retire. You'll have 30 days from the date you're automatically enrolled to decide whether you want to stay in the plan or opt out and get a refund of any contribution you've made. 2. How much should I pay in? Your payments will start at a level set by Arriva, but you need to decide whether this is enough to get the lifestyle you want when you retire. 3. How can I invest my money? Your money will automatically go into an investment option that Arriva has chosen with the help of its advisers. This may be the right choice for you but it s worth checking out the other options that are available. You should think carefully about this as opting out would mean missing out on extra payments from Arriva and tax benefits from the government. 2

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6 Step 1: Is the plan right for me? What does my future look like? Even if it seems a long way off, it s really worth thinking about your life after work and what it might cost. You may not need quite as much to live on when you retire. You might have paid off your mortgage by then, and some of your expenses might be lower. That said, you might still want to do a lot of the things you enjoy doing right now. Little luxuries like going out for dinner with friends can all add up. Your company pension is one way of helping you get the retirement you want. Could you live on the Basic State Pension? Right now the flat-rate state pension for a single person is a week. However, the amount you will actually receive is dependent on your national insurance record. Some people could get more, many could get less. As you can see below, this is a really tight budget especially after expenses like your fuel and phone bills, council tax and the cost of running your car. If you want a higher standard of living than this when you retire, you need to have your own retirement savings in place too. A company pension is one of the best ways to do this energy car = food shopping phone and broadband council tax State Pension 4

7 It s not just your payments You re in control A pension is a unique way of saving because it s not just your money that goes into it. In addition to your savings, Arriva may pay into your pension plan and you can receive tax benefits from the government. No other way of saving gives you this. It s your pension no matter what. It remains yours even if you move job or the company you work for changes hands. It s one way of saving for life after work, and there's lots you can do to get the most from your company pension. 5

8 What decisions do I need to make now? It's never too early or too late to think about saving for your future, but you should think carefully about whether or not the Arriva Workplace Pension Plan is right for you. 1. Is the plan right for me? Decide whether to stay in, or opt out. To opt out, I should contact Standard Life by telephone or online. 2. How much must I pay in? I can find out more on page How can I invest my money? I can find out more on page 12. 6

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10 Step 2: How much must I pay in? How much must I pay in? When you become a member, your payments start at a level set by Arriva, but you can choose to pay more if you want to. The basic contribution rates are: Your contribution Arriva's contribution Total 3% minimum 2% 5% 4% 3% 7% 5% + 4% 9% + 6 April 2019 onwards Your contribution Arriva's contribution Total 5% minimum 3% 8% 6% 4% 10% 7% + 5% 12% + The contributions you pay will be based on everything that you earn (including basic salary, overtime, shift allowances) above 116* per week or 503* per month. If you're eligible for different contributions, Arriva will tell you this. * Please note that this figure is set by the government and is reviewed annually. The figures of 116 per week, or 503 per month, are correct for tax year 2018/19. Please speak to your payroll department if you would like an up to date figure. 8

11 How much should I pay in? There are no hard and fast rules about how much to pay in. But if you re serious about saving for your future, you should consider the following: Pay in as much as you can afford Make sure your payments are realistic Think about making additional one off payments but you should make sure you can meet your other financial commitments. to achieve the lifestyle you want when you retire, you probably need to save a little more. if you have some extra money, think about putting some of it into your pension. If you would like to increase your Contributions, contact your payroll department. As with any investment the value of your investment can go down as well as up and may be worth less than what was paid in. 9

12 Tax efficient savings Some members will see their contributions deducted from their net salary (their salary after income tax has been deducted). Here s how it works: The government pays 20% of your monthly contribution. Let s say your pensionable salary is 18,000 a year, and you re paying 3% of this into your pension. Your monthly contribution is 45 but you will only pay 36 of this the government will pay in the extra 9 on your behalf. However, with Arriva's contribution of 30 on top, you'll save 75 per month overall: 36 From you 9 30 From the government From your employer Monthly Savings 75 If you pay higher rate or additional rate tax, you can claim the extra tax relief by contacting HMRC. Tax rules and limits may change in the future. The information here is based on our pension experts understanding of the current situation as at April

13 Paying by salary sacrifice The majority of Arriva Workplace Pension Plan members have pension contributions made to their pension via salary sacrifice. Salary sacrifice is a way of making contributions to your pension that could let you increase your take home pay. Here s how it works 1. You agree to reduce your salary by an amount equal to the gross pension contributions you would normally make. 2. You no longer make these pension contributions. 3. In exchange, Arriva increases its contributions into your pension by an equal amount. 4. The same total amount is paid into your pension. With salary sacrifice, you'll save on National Insurance contributions and reduce the amount of your earnings that are subject to income tax. You effectively receive all the tax relief you are entitled to automatically, meaning you will not need to claim any tax relief in your annual return. It s important to remember that salary sacrifice isn t right for everyone. It s a change to your terms of employment and could affect any state benefits, other company benefits or your ability to borrow. If you earn below the Personal Allowance, salary sacrifice may not be right for you. For more information about salary sacrifice, see the salary sacrifice guide provided by Arriva. If you re still not sure whether salary sacrifice is right for you, you should ask a financial adviser for guidance. 11

14 Step 3: How can I invest my money? What happens to my payments? The money that's paid into your pension is invested. This gives it more opportunity to grow than if you put it in a savings account. Where your money is invested can make a big difference to what your pension will be worth and to your lifestyle when you retire. It s important that you find out where your money is invested and what your options are. As with any investment, the value can go down as well as up and may be worth less than what was paid in. 12

15 My investment options Here s a quick summary of your options. The guide How to choose the right investment options for your pension' has more information about the options available through your company pension. Option 1: Lifestyle profiles Option 2: Arriva selected fund range Lower-involvement options If you want a lower level of involvement in the selection of your investment options, or find it confusing to choose where to invest your money for your pension, then a lifestyle profile could be for you. If you don't want to make your own investment choice your money will be automatically invested in the Passive Plus III Universal Strategic Lifestyle Profile when you join the plan. It's considered to be an appropriate option for many people's pension plan investments. Your money will stay invested in this option unless you decide to change where you invest it. You should review this and check it is suitable for your needs. Medium-involvement options If you want a bit more involvement in investing your money, then the Arriva selected fund range could be for you. Arriva and its advisers have selected this small range of investment options to give you some choice over where your money is invested. It's easier to handle than the full range of options. Remember, Arriva isn t recommending that the options in the selected range are suitable for everyone. If you choose from the selected range, you may need to spend a bit more time reviewing your investments to help make sure that they stay on track to get the retirement income you want. 13

16 Option 3: Standard Life's full fund range Higher-involvement options If you re confident about investing then you can choose from Standard Life's full fund range, or take complete control of your investments through a Self-Invested Personal Pension. There are choices to suit your level of experience with investing and how much time you want to spend monitoring and managing your investments. The full fund range gives you access to investment funds covering all the main asset classes and geographical regions. For details of the funds available in the full fund range, see the guide 'How to choose the right investment options for your pension', available to download from your pension website Remember, whatever option you choose you can change your selection at any time. For more information on your investment options and the related charges read the guide 'How to choose the right investment options for your pension'. We recommend that you seek financial advice before making your selections. 14

17 If you're unsure about your attitude to risk, we have a risk questionnaire to help you visit 15

18 Other information What happens when I retire? There are a range of ways for you to access your pension savings when you reach 55 (age 57 from 2028) from guaranteed income (annuity) and flexible income (drawdown) options, to combinations of the two. You can also take a lump sum, with normally no tax to pay on the first 25% of your pension pot. When the time comes for you to consider retirement, we ll write to you and explain your options in more detail, to help you find the right option for you. Your options at retirement will always depend on your personal circumstances. If you want to access some of the more flexible options, you may need to move to a different pension product first. Whether you re thinking about flexible or fixed income take time to shop around for the best deal. You could transfer your pension to another provider and you might get a better retirement income. We recommend you seek appropriate guidance or advice before you make any decisions. An adviser may charge a fee for this. You can also get free impartial guidance over the phone or face-to-face with Pensionwise. Go to or call The Money Advice Service (MAS) guide is also available on the Pensionwise site. Transferring will not be right for everyone. There are a number of points to consider, as you could be losing money by giving up any valuable benefits or guarantees that your current plan offers. Option 1: Flexible Income Flexible income, or drawdown, gives you the freedom to choose your own level of income and the flexibility to suit your personal needs. To access this you may need to move to a different pension product which offers this functionality. Different charges may apply and you have to pay income tax on it, just as you would your salary. As with all investments, your capital is subject to risk, and the value can go down as well as up. Option 2: Guaranteed Income Guaranteed income, or an annuity, is a guaranteed income for life. It s easy to set up and won t need any further attention from then on. You have to pay income tax on it, just as you would your salary. You should be aware that the decision to purchase a fixed income product should be carefully considered, as it normally can t be changed in the future. 16 Option 3: Take cash from your pension Withdraw lump sums from your pension whenever you like. The first 25% is normally tax-free. If you take it all out as cash, you need to think about the tax you ll pay. What happens to your pension if you die before you retire? If you have another source of income or want to support others after you re gone then leaving your pension invested could be the right choice for you. When you die, any pot that remains can be passed on. Who receives it, is at the discretion of Standard Life. You can let Standard Life know who you would like it to be paid to by completing an Expression of Wish form. As Standard Life decides who will receive the pot, it is normally inheritance-tax free. If you die before you are 75, payments out will normally be free of income tax If you die after reaching 75, payments out will normally be charged income tax at the beneficiary's marginal rate.

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20 Next steps Step 1 Is the plan right for me? I've read the joining information on the pension website, including the 'Key features' document and Illustration. I understand that the state pension (and any pension credit or other benefits in retirement I receive from the government) may not provide me with the lifestyle I want for the future. I understand that if I opt out I will lose my contributions from Arriva. I understand that I only have 30 days to opt out and receive a refund. Step 2 How much should I pay in? I've used the tools on the pension website to assess how much to save. I've considered how much I can afford to pay. Step 3 How can I invest my money? I've measured my attitude to risk using the risk questionnaire on the pension website. I've decided how involved I want to be. I understand that if I don't make my own investment choice, my contributions will be invested in the Arriva Lower to Medium Risk Lifestyle Profile. If you have any questions, you can call us on (calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary). To find out more or manage your pension online, visit It might be a good idea to seek financial advice if you re unsure about any aspect of your company pension. If you don t have your own adviser you can find one in your area by visiting 18

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24 Find out more If you d like more information on the products or services within this literature, or if there s anything more we can help you with, just call us on this number or visit our website. Call us on (Mon Fri, 9am to 5pm). Call charges will vary and calls may be recorded and/or monitored to help improve customer service. Products provided by subsidiaries of Standard Life Aberdeen plc or other specified providers. Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. WSMEE1DARR Standard Life Aberdeen, images reproduced under licence. All rights reserved.