Building for your retirement Your Guide to the Defined Contribution Section of the Allen & Overy Pension Scheme

Building for your retirement Your Guide to the Defined Contribution Section of the Allen & Overy Pension Scheme November 2013

2 Allen & Overy Scheme Booklet Contents Introduction 3 Summary of the Scheme 4 1. What can the Scheme do for me? 5 2. How do I join the Scheme? 6 3. How much can I contribute? 8 4. How is my money invested? 10 5. What do I get when I retire? 11 6. What benefits are payable in the event of my death? 13 7. What happens to my benefits if I leave the Scheme? 15 8. What happens if I am absent from work? 17 9. What about my State Pension? 19 10. Have I got everything covered? 20 11. Is there anything else I need to know? 21 Glossary of Terms 22 Allen & Overy LLP 2013

3 Introduction Welcome to your guide to the Defined Contribution (DC) Section of the Allen & Overy Pension Scheme. This guide, together with the separate booklet A Guide to your Pension Scheme Investment Choices, describes the DC Section of the Allen & Overy Pension Scheme. Under the DC Section, the contributions paid by you and Allen & Overy, including any investment returns, are invested in your own individual Retirement Account. At retirement, the money available in your Retirement Account is used to buy retirement benefits. The Scheme is a registered pension scheme under the Finance Act 2004. This means that the Scheme s investments receive valuable tax advantages from HMRC and members contributions currently receive full tax relief. The Scheme is not contracted-out of the State Second Pension (S2P), previously called the State Earnings Related Pension Scheme (SERPS). This means that the benefits you receive from the Scheme will be in addition to any benefits paid to you by the State. The Trustee of the Scheme is Allen & Overy Pension Trustee Limited. The Trustee is responsible for investing the Scheme s assets and has set out the principles adopted in a Statement of Investment Principles. A list of the Trustee Directors can be found at, which is updated regularly. The Scheme s Trust Deed and Rules govern its provisions. This guide is for general guidance and provides only summary information. It is overridden by the Trust Deed and Rules if there is any inconsistency between them or uncertainty to any entitlement. If you were a member of the DB Section of the Scheme immediately before 1 January 2007 different terms may apply to your benefits - these are noted in this guide where relevant. All other information in this guide applies to your benefits under the DC Section only. The day-to-day running of the Scheme is looked after by Capita - an external service provider. The Administration Team can be contacted using the details provided at the end of the guide. If you have any questions about the Scheme or your entitlement to benefits please address them to Kellie McFarlane in the Human Resources department at Allen & Overy LLP, 68 Donegall Quay, Belfast, BT1 3NL. You can also obtain a copy of the statement of Investment Principles and Scheme Trust Deed and Rules from Kellie McFarlane. A number of the terms used in this guide are shown in bold type. These are defined terms and can be found in the Glossary of Terms at the back of the guide.

4 Allen & Overy Scheme Booklet Summary of the Scheme A brief outline of contributions and benefits payable in the Scheme. Allen & Overy makes Core Contributions to the Scheme, which vary according to your age You do not have to contribute, but you can contribute Ordinary Contributions to a maximum level according to your age If you choose to pay Ordinary Contributions, Allen & Overy will then pay Matching Contributions to the same level. You may also pay Additional Voluntary Contributions (AVCs) at a level of your choosing Allen & Overy does not match any AVCs until You leave You die in service You retire With 3 to 18 months Pensionable Service: If you have completed at least three months Pensionable Service but less than 18 months, you may elect to take a refund of the value of any contributions that you have paid, or transfer the full cash value of your Retirement Account to another registered pension arrangement. You cannot retain any entitlement in the Scheme. With 18 to 24 months Pensionable Service: If you have completed at least 18 months Pensionable Service but less than 24 months, you may elect to take a refund of the value of any contributions that you have paid, or transfer the full cash value of your Retirement Account to another registered pension arrangement. Alternatively, you can leave your Retirement Account invested in the Scheme until your retirement or death. After 2 or more years Pensionable Service: You can leave your Retirement Account invested in the Scheme until your retirement or death. Or Transfer the cash value of your Retirement Account either to your new employer s plan or into a registered personal pension of your own choosing. A lump sum related to your Salary will be payable.* Plus The cash value of any contributions that you paid will be payable as an additional lump sum. Plus A Spouse s/ Dependant s pension may also be payable. *Subject to the terms of your contract of employment. The cash value of your Retirement Account will be used to provide you with benefits that are based on the options you have selected. Part of your Retirement Account may be taken as a taxfree cash sum. Allen & Overy LLP 2013

5 Section 1 What can the Scheme do for me? Regardless of how far away retirement is, you need to start thinking about the standard of living you would like when you retire. The State Pension will give you a basic income, but it s important to consider if this will be enough for you to live comfortably. The Scheme is a money purchase arrangement this means that contributions made by you and Allen & Overy are paid into your own personal Retirement Account in the Scheme. The pension provided under the Scheme will depend on the amount you have accumulated in your own Retirement Account (which depends on the contributions made by you and Allen & Overy and the investment returns on them). There are many benefits to being a member of the Scheme, including: A low-cost tax efficient way to save for your future The option to pay extra towards your pension Flexibility you choose how to invest your Retirement Account As a member of the Allen & Overy Pension Scheme DC Section: You will have an account to which your own and Allen & Overy s contributions will be credited You can participate on a non-contributory basis and receive Allen & Overy s Core Contributions only You can take advantage of Allen & Overy s Matching Contributions by making Ordinary Contributions yourself You can choose to make Additional Voluntary Contributions (AVCs) in excess of your Ordinary Contributions but these will not be matched by Allen & Overy You will be a member of the State Second Pension (S2P) The option to take a tax-free lump sum when you retire The option to retire early Employer contributions in addition to any contributions that you choose to pay

6 Allen & Overy Scheme Booklet Section 2 How do I join the Scheme? Joining the Scheme is easy and a step in the right direction to saving for your retirement. Can I join? You are eligible for membership of the Scheme at any time starting from the beginning of any month, following the month in which you started employment with Allen & Overy, if: you are normally employed in the UK; and you are aged over 16 but under age State Pension Age (SPA). If you have fixed or enhanced protection for your pension benefits which has been granted by HMRC, you may not be able to join the Scheme as doing so may invalidate your protection. Please speak to an Independent Financial Advisor for more information. Changes from 1 November 2013 There are a number of Allen & Overy employees in London who are not currently members of the Scheme as they have either opted to leave the Scheme, or never joined. If this applies to you and you: earn over 9,440 a year ( 787 per month) are aged 22 or over; and are under State Pension Age you will be enrolled into the Scheme with effect from 1 November 2013. If you do not currently meet the above criteria, you may be automatically enrolled in the future if you do qualify. What happens next? Membership is from the 1st of the month following your join date. Core Contributions will be invested for you in the default investment fund. Further information on the default investment fund and the other investment options is available from the Scheme website,. If you wish to pay Ordinary Contributions, and thereby receive Matching Contributions from Allen & Overy (see page 8), you should access My Self-Service and amend your contributions. Full details of the Scheme can be obtained from either the Scheme website (), the Allen & Overy intranet site, or from Kellie McFarlane in the Human Resources department. Can I choose not to join? If you opt out of the Scheme: and you do not meet the age / earnings criteria described above at that time, you will be auto-enrolled from the 1st of the month following the first occasion that you meet those criteria; you will be re-enrolled automatically on the third anniversary of Allen & Overy s automatic enrolment staging date (on or around 1 August 2016) if you meet the age / earnings criteria described above at that time and have not opted-out in the previous 12 months; in either case, having opted out you will be treated as never having been a member of the scheme and any existing tax protections will continue. If you opt out (or opt out but stay in Allen & Overy s employment) you will still be covered for the lump sum death in service benefit subject to the terms of your contract of employment. You will not be required to pay any contribution for this benefit. Allen & Overy LLP 2013

7 What happens if I already have a personal pension? You can be a member of the Scheme and contribute to a personal pension arrangement at the same time. If you already have a personal pension when you are eligible to join the Scheme, it may be possible to transfer the value of your personal pension into the Scheme. Can I transfer benefits into the Scheme from a previous pension arrangement? If you have benefits in a previous employer s scheme you may be able to transfer them into the Scheme with the Trustee s agreement. You should be aware that we can only accept transfer values if your previous scheme gives the Trustee assurances about certain technical matters. If your previous pension scheme will not give the Trustee such assurances, it will not be possible for the Trustee to accept the transfer value. If you decide that you wish to transfer benefits please complete a Transfer In Enquiry Form and return it to Capita. Don t forget You should note that it may not necessarily be in your best financial interests to transfer your previous pension benefits into the Scheme. Neither Allen & Overy, the Trustee, nor the Scheme Administrator are authorised to provide you with any advice in this regard. You should seek independent financial advice before making a decision to transfer other pension benefits into the Scheme. How will I find out how my fund is performing? You will receive an annual statement of your Retirement Account which will detail your contributions paid and any investment growth gained in the current Scheme year, provide confirmation of your chosen investment options, and give estimated projections of the possible pension available if you remain an active member of the Scheme until retirement. In addition, you can view a wealth of general information regarding the Scheme, as well as detailed information regarding your pension contributions and investments, securely online at the Scheme website -. You will be emailed registration and initial password details for the website upon joining the Scheme. If you have lost your log in details, please access the My Pension page of the website and click on the link. Full details of the funds available to you and their risk ratings can be viewed, and investment switches made, through the Scheme website.

8 Allen & Overy Scheme Booklet Section 3 How much can I contribute? By paying into the Scheme now, you are taking important steps towards preparing for retirement. How much does Allen & Overy contribute and how much do I contribute? All members of the DC Section may participate on a noncontributory basis and receive Allen & Overy s Core Contributions only. However, if you wish to take advantage of Allen & Overy s Matching Contributions (which are paid in addition to the Core Contributions) you must make a contribution yourself. Contribution levels are set on an age-related scale (see the flow chart below for details). Allen & Overy s contributions to the DC Section of the Scheme are shown below and will either be paid in by Allen & Overy or credited from the general assets of the Scheme. If you join the DC Section of the Allen & Overy Pension Scheme Allen & Overy will pay Core Contributions, which are scaled depending on your age at commencing employment in the London Office (or 1st January thereafter) If you are 16-29 If you are 30-39 If you are 40-49 If you are 50+ Allen & Overy will pay 4% Allen & Overy will pay 6% Allen & Overy will pay 8% Allen & Overy will pay 10% You may elect to pay Ordinary Contributions to a maximum level based on your age at commencing employment in the London Office (or 1st January thereafter) You may pay up to 2% You may pay up to 3% You may pay up to 4% You may pay up to 5% Allen & Overy will match this amount in addition to the Core Contributions shown above You may elect to pay AVCs - these are not matched by Allen & Overy (see page 9 for full details) All the contribution types detailed above are based on your capped Pensionable Salary, and are deducted automatically via payroll from your pay in order to ensure the correct tax relief is granted at source. Allen & Overy LLP 2013

9 Can I pay extra above the matched contribution levels? You can pay AVCs but they will not attract any further contributions from Allen & Overy. AVCs plus any Ordinary Contributions can be made up to a maximum of 100% of total gross earnings from Allen & Overy in each tax year. AVCs are processed through the payroll in order for you to receive your full tax relief at your highest marginal rate. Restrictions may apply to ensure you leave enough pay to cover your other statutory deductions such as National Insurance. If your pension savings exceed the 50,000 Annual Allowance in any Pension Input Period (PIP), a special tax charge is payable on the surplus savings above this amount. The PIP under the Scheme is 1 January to 31 December. Thus, your Pension Input Period for the 2013/14 tax year will be the year 1 January 2013 to 31 December 2013. Due to payroll processing, the last contribution that will be included in the current PIP year will be your November contribution, which is invested in December. Your December contribution will be recorded in the following PIP year. We recommend that you seek financial/tax advice if you think you will be likely to exceed this allowance. Please refer to the Annual Allowance, Lifetime Allowance and Pension Input Period notes in the Glossary of Terms section for information on the maximum tax free payments you may make to your pension arrangements. How it works in practice A member aged 25 has a Pensionable Salary of 20,000 pa. She decides to pay Ordinary Contributions of 2% to the Scheme which amount to 33.33 a month ( 400 a year). With tax relief (assuming a basic rate of 20p in the ) it only costs 26.66 a month ( 319.92 per annum). However, because of Allen & Overy s contributions, she will have the benefit of contributions far greater than this amount. Member s Ordinary Contributions: 20,000 x 2% = 400 Employer s Core Contributions: 20,000 x 4% = 800 Employer s Matching Contributions: 20,000 x 2% = 400 Total contributions for year = 1,600 at a personal cost of 319.92 Can I change my contribution rate? When you first join the Scheme, or start to make Ordinary Contributions, you choose your contribution level subject to the maximum levels in the diagram on page 8. You can pick any whole percentage, including nil% up to the maximum for your age band. When you move into the next age band you will be able to make contributions at a higher level from the 1st January following your birthday. Allen & Overy s Core Contributions automatically increase with effect from the 1st January following any change to your age band. If you wish to contribute at the higher level, as Allen & Overy s Matching Contributions will only be increased if you increase your own contributions, you will need to make the change through My Self Service. Can I change my contribution rate before the 1st January? You can change your Ordinary Contribution level during the year, subject to the maximum levels in the diagram on page 8. To make a change you should access My Self Service and your instruction will be processed on the 1st of the following month. You may change your contribution level no more than twice in any twelve month period. If you want to make a third change in a twelve month period, you need the consent of the Trustee. You can, however, change your AVC level at any time via My Self Service. How do I make my contributions? Your Ordinary Contributions and your AVCs will be automatically deducted from your Salary via payroll. Look at what you save! The actual cost of membership to you is reduced because you receive tax relief on your contributions. For every 1 you pay, your take-home pay is only reduced by 80p if you are a basic rate tax payer, because you receive tax relief of 20% (higher rate tax payers may also be eligible for further tax relief).

10 Allen & Overy Scheme Booklet Section 4 How is my money invested? While you are a member of the Scheme, the contributions are invested in funds which aim to increase the value of your Retirement Account. The booklet A Guide to your Pension Scheme Investment Choices explains the options available to you as a member of the Scheme and the important decisions you should consider before choosing how to invest your Retirement Account. How can I switch my investment funds? If you request a change to your investment holding, the Scheme Administrator will aim to calculate your switch request, and send a request to the Investment Manager for this to be actioned within 48 hours. In practice, the Scheme Administrator will usually do this the day of receipt, although sometimes in specific instances this may not possible (for example, if you are currently having monthly contributions allocated or profile realignment switches actioned). The Investment Manager will action the switch within approximately 2 working days - frequently within 24 hours. The Investment Manager will then confirm the completion to the Scheme Administrator within 2 days. Upon receipt of this confirmation the Scheme Administrator will amend your pension records to show your new investment position; this will also be reflected online at the Scheme website within 24 hours of this amendment, and you will receive a hard copy confirmation letter shortly after. Taking into account the administrative processes involved, a request to switch your unit holdings will usually take approximately one week to fully complete from the time you submit your switch request, to the date that you receive formal written confirmation of completion. Please refer to the guide for more information about: The investment options available to you as a member of the Scheme The different types of fund you are able to invest your Retirement Account in Don t forget! You can change your investment options on a monthly basis free of charge. You may want to seek independent financial advice when making investment choices relating to your Retirement Account. To find an Independent Financial Adviser (IFA) in your local area, visit www.unbiased.co.uk. A financial adviser may charge you for their advice, so please check this with them first. How you can manage your investments The guide is available on the Scheme website at. Allen & Overy LLP 2013

11 Section 5 What do I get when I retire? Your pension is due at your Normal Retirement Date, but there is also the option to take your pension early from age 55 with Allen & Overy s consent. And you will receive: A pension for life; The option of a tax-free lump sum; and/or The option to provide for one or more Dependants pensions in the event of your death. When can I retire? Your Normal Retirement Date is your 65th birthday. It is possible, if the Trustee and Allen & Overy agree, for you to choose to have your pension and tax-free cash sum paid on or after Normal Retirement Date whilst you are still employed by Allen & Overy. Alternatively, you will be able to retire and take your pension from age 65 without the consent of the Trustee and Allen & Overy*. *If you are a DC member who joined the Scheme before 1 April 2010, you have the right to retire at age 62. If you continue as an employee of Allen & Overy after age 62 you may continue in membership of the DC Section on the same terms as applied before age 62. Can I retire early? You may be able to take early retirement from age 55 if Allen & Overy agrees. You should note that the younger the age at which you retire, your Retirement Account may be less, and the more expensive it will be to provide a pension. Retirement may be taken before the standard minimum age of 55 on the grounds of Incapacity. Employer consent must be received for retirement on Incapacity grounds. Can I take a cash lump sum? You can currently take part of your Retirement Account as tax-free cash. Current HMRC limits mean that the cash sum must not usually exceed 25% of your total fund. If the value of your pension benefits (from all sources) are worth less than 18,000 when they come into payment, you may be able to receive the whole of your Scheme benefit as a cash sum. Please be aware that no lump sum can be paid before you become entitled to payment of your pension. You will also be asked to provide the Trustee with details of the amount of the Lifetime Allowance available to you. The Trustee may, under exceptional circumstances of serious ill-health, pay the member an immediate cash sum equal to the DC member s balance (less tax), following which he or she will cease to be a DC member and no other benefit will be payable to or in respect of him or her under the Scheme. The member must be suffering serious ill-health in the Employer s opinion, and also meet with certain legislative requirements for benefits to be paid in this way.

12 Allen & Overy Scheme Booklet Can I claim my pension and continue working? If you have reached Minimum Pension Age (which is currently age 55), you may apply to take early retirement from the Scheme whilst still remaining employed with Allen & Overy. Both Allen & Overy and the Trustee must agree to any such request, and if this is granted, your retirement benefits will be put into payment and you will be treated as having retired from the Scheme. If you wish to investigate this option, you should in the first instance discuss this with either Kellie McFarlane in the Human Resources department, or with your immediate Line Manager. How much will my pension be? As you approach retirement, Kellie McFarlane in the Human Resources department will be able to request details of your retirement benefits from the Scheme Administrator. Alternatively you may request this information direct from the Scheme Administrator. Full contact details are on page 23. The amount of pension you will receive depends on three factors: The realised value of your Retirement Account at the date you retire, less any cash sum that you have decided to take; The type of pension you want, in particular, the increases you would like to receive once your pension starts and the benefits you wish to provide for your Dependants; The cost of providing a pension at the time of retirement. This tends to move in line with interest rates so that the higher the current rate of interest the lower the cost of the pension or the lower the current rate of interest, the higher the cost of the pension. Are there any limits on how much I can save in my Retirement Account? The Government has determined a maximum amount of taxprivileged savings you can build up in a pension fund throughout your life. This value is called the Lifetime Allowance and is set at 1.5 million the tax year 2013/14. If the value of your total pension savings, including your past and present savings from all other arrangements, exceeds the Lifetime Allowance, you will pay a tax charge on the excess called the Lifetime Allowance Charge. How is my pension paid? Your Retirement Account at retirement is used to secure a pension with an insurance company. The Scheme Administrator will obtain quotes on your behalf and provide you with details, together with the options for selecting an insurance company of your choice (referred to as an Open Market Option). Once your pension has been set up for payment, any tax-free cash sum that you have elected to take will usually be paid directly to your bank account and confirmed in writing to your home address, and the pension will be paid directly to you by the insurance company. Will my pension be increased once in payment? This will depend on the type of pension you purchase at retirement. You could select a flat rate (your pension will remain level during the time it is paid) or inflation-linked (your pension will increase each year in line with inflation) pension. If your Scheme benefits, when they come into payment, are worth more than the Lifetime Allowance applicable at the time of your retirement, they will be subject to a recovery charge on the excess. This charge will be 25% of the benefit if the excess is paid to you as a pension (your pension will also be subject to income tax), or 55% if it is paid as a lump sum. Allen & Overy LLP 2013

13 Section 6 What benefits are payable in the event of my death? The Scheme not only offers valuable benefits to you in retirement, but it can also provide for your Dependants if you die before or after retiring. Whilst you are an active member you are covered for a death in service lump sum subject to the terms of your contract of employment. At retirement you can choose to use part of your Retirement Account to provide benefits for your Dependants in the event of your death, but this will reduce the amount of your own retirement pension. What happens if I die in service? If you die in service, whether before or after your Normal Retirement Date, your Dependants may receive: a cash lump sum equal to 5 times your Salary at the date of your death, with the exception of death occurring during a career break see page 18. Whilst you remain an active member of the Allen & Overy Pension Scheme (see section When can I retire? on page 11), your Dependants may also receive: a cash lump sum equal to the part of your Retirement Account deriving from any contributions you have paid to the Scheme together with any investment growth on those funds; Salary is the annual amount of your planned pay at the date of your death, subject to this amount being no greater than the notional Earnings Cap in force at that date. If your Spouse is more than ten years younger than you the Trustee reserves the right to reduce the amount of pension available. Death benefits are also subject to the Trustee being able to obtain appropriate insurance cover. You will be notified if there are any problems with obtaining this. The benefits described above are subject to any difference which may be notified to you by Allen & Overy. a pension for a Spouse equal to 25% of your Pensionable Salary at the date of your death 1. 1 If you were a member of the DB Section immediately before 1 January 2007 your Dependant will receive the greater of 25% of your Pensionable Salary or the pension benefit payable on death in deferment under the DB Section (50% of your Scale Pension).

14 Allen & Overy Scheme Booklet Who decides who will receive any lump sums paid on my death before retirement? For tax reasons the Trustee has discretion as to who receives any cash sum benefit on your death. The benefit can be split between different beneficiaries - this will normally be your Spouse or close family or anybody who is financially dependent on you at the date of your death, but may include other bodies or organisations, such as charities. You will, however, be asked to submit your nominated beneficiary details to the Trustee. This will tell the Trustee to whom you wish any death benefit to be paid. The Trustee will take account of your wishes in the event of your death but is not legally bound by them, and retains full discretion as to whom any death benefits are paid. Your nomination details must be submitted via the facility within the secure section of the Scheme website, and can be updated at any time. Once recorded, your nomination details will only be referred to in the event of your death. What happens if I die after I retire? The benefits available to Dependants will depend on the type of pension you choose at retirement. For example, you can choose for a pension to be payable to a Dependant after you die. You might, on the other hand, arrange for a pension just for yourself. You can also choose a pension which is payable for a minimum period (usually five years), which means that if you die before five years worth of your pension has been paid, the remaining balance up to the five year period will continue to be paid to your beneficiaries or Estate. Don t forget You should update your nominated beneficiary details on the pensions website at if your circumstances change. Allen & Overy LLP 2013

15 Section 7 What happens to my benefits if I leave the Scheme? It is important to be aware of the effect leaving the Scheme may have on your Retirement Account. What happens if I opt out of the Scheme? You will be giving up the valuable benefit of Company Core Contributions of between 4% and 10% of your Pensionable Salary. For options regarding leaving the Scheme please see the section below What happens if I leave Allen & Overy prior to retirement? You may still have to be re-enrolled into the scheme at a later date (see page 6 under Can I choose not to join?). You should think carefully before opting out of the Scheme as it offers you and your Dependants valuable benefits and Allen & Overy also contributes into your Retirement Account this is money towards your pension from your Employer that you would otherwise not receive. What happens if I leave Allen & Overy prior to retirement? When you terminate your employment with Allen & Overy you must cease contributing to the Scheme. Your options as a leaver will depend on how long you have been a member of the Scheme.* If you have been a member of the Scheme for less than three months you will receive a refund of the contributions you have made, less an amount in respect of income tax, and will be treated as never having been a member. You will not be entitled to any further benefits from the Scheme. If you have been a member of the Scheme for more than three months but less than eighteen months you will have the option to receive a refund of the contributions, plus any investment returns, you have made into the Scheme, less an amount in respect of income tax, or you may transfer your entire benefit (inclusive of the value of the Company Contributions) to another registered pension scheme or qualifying recognised overseas pension scheme. The transfer option is only available if completed within three months of receiving your leaver s statement. If the transfer is not completed within the time limits, an automatic refund will be processed. You will not be entitled to any further benefits from the Scheme. If you have been a member of the Scheme for eighteen months or more but less than two years you may either: take a refund of your contributions (less tax), as described above; or transfer your entire benefit to another registered pension scheme or qualifying recognised overseas pension scheme; or defer your benefits, as described on page 16. You should speak to an independent financial adviser if you wish to discuss the options you have in relation to your benefits in the Scheme.

16 Allen & Overy Scheme Booklet If you have been a member of the Scheme for two years or more, your Retirement Account will be retained in the Scheme (this is known as deferring your benefits). You will receive an annual statement of your deferred benefits, which will continue to be invested according to your instructions until you retire at Normal Retirement Date (or earlier if the Trustee agrees). You will continue to receive annual statements showing the value of your invested funds and you can continue to monitor your investments online at in the same way that you can as an active member. Alternatively, you have the right to transfer your entire deferred benefit to another registered pension scheme or qualifying recognised overseas pension scheme. Please see the section below titled Can I transfer my Retirement Account to another pension arrangement?, for more details. At retirement you will have the same options as previously described in the What will I get at retirement? section. *All members who were members of the DB Section immediately before 1 January 2007 have, for this purpose, been members of the Scheme for at least two years. Can I transfer my Retirement Account to another pension arrangement? If you have a deferred benefit entitlement you can transfer your Retirement Account to either a personal pension arrangement or to another occupational pension scheme provided that it is a registered pension scheme or qualifying recognised overseas pension scheme. You have the right to transfer your benefit to another provider at any time after leaving, until 12 months before reaching your Normal Retirement Date when your right to a transfer ceases. Please note, however, that the Rules of some employers schemes may not permit them to accept a transfer of benefits. By transferring your Scheme benefits you would give up all entitlement to benefits under the Scheme. If you wish to do this you should seek further information from either Capita or from the administrators of your new scheme. Once all the necessary paperwork has been received to action such a transfer, a request to sell your unit holdings will be sent to the Investment Manager, and once the realised fund value has been received in the Trustee bank account, payment will be made to your new provider. This process will normally be actioned in line with the same timescales outlined for investment switches referred to in the section How can I switch my investment funds. Can I leave the Scheme whilst still working at Allen & Overy? You can opt out of the Scheme at any time provided that you give one month s notice. You may still have to be re-enrolled into the Scheme at a later date (see page 6 under Can I choose not to join? ). If you apply to rejoin the Scheme after leaving it, Allen & Overy s consent will be required and special terms may be imposed if your re-entry is permitted. It is also possible to draw your benefits (in full) whilst still working at Allen & Overy, subject to a Minimum Pension Age of 55. Please see page 12 for further information regarding early retirement under these circumstances. Deferred benefits What happens if I defer my benefits, but die before retirement? A refund of your Retirement Account at the date of your death may be paid as a lump sum. See the section What benefits are payable in the event of my death?. The exact amount of the lump sum may also be subject to Scheme limits. What happens if I get divorced? Provisions for pension sharing on divorce were included in the Finance Act 1999 and the Welfare Reform and Pensions Act 1999. The Trustee of the Scheme has issued guidelines which are available upon request from Kellie McFarlane in the Human Resources department. You should advise the Reward & Pensions Administrator at the earliest opportunity if you are in the process of a divorce and whether any financial settlement is likely to affect your accrued benefit in the Scheme. Allen & Overy LLP 2013

17 Section 8 What happens if I am absent from work? We know that throughout your working life there may be times when you are absent from work. Some of the main reasons for absence are covered below. Family leave What happens if I am on maternity/paternity or adoption leave? If you are absent on maternity/paternity or adoption leave your membership of the Scheme will continue for any paid statutory leave period but you will not be required to make either Ordinary Contributions or AVCs unless you wish to do so. You must advise Kellie McFarlane in the Human Resources department if you wish to continue making contributions during the paid statutory period. Allen & Overy s contributions for this period will continue to be based on your Pensionable Salary, but you may base your AVCs and Ordinary Contributions on either the Salary you actually receive or your Pensionable Salary. Once the paid leave period has ended, your membership of the Scheme will be suspended until the earliest of: the date you return to work; the date you inform Allen & Overy that you have decided not to return to work, in which case your membership will be deemed to have terminated at the end of the statutory period; or the date you lose the right to return to work. If you die during the agreed period of maternity/paternity or adoption leave, the same benefits will be payable as if you had died in employment, unless you have previously informed Allen & Overy that you are not returning to work, in which case you will be treated as having left employment. What happens if I take maternity/paternity or adoption leave whilst on a career break or unpaid leave? You will receive the same benefits during your maternity/paternity or adoption leave as you were entitled to while on unpaid leave or a career break immediately before the start of your maternity/paternity or adoption leave - see below for more details. Illness Do I have to make contributions if I am off work due to illness? If you are off work due to illness, and you continue to receive a Salary, your membership of the Scheme will be maintained and you and Allen & Overy will continue to make contributions. If you are on unpaid sick leave your pensionable employment will be suspended and no Employer s Core Contributions, Ordinary Contributions and Matching Contributions are payable. If you are transferred to Permanent Health Insurance special terms will apply. Details are available from Kellie McFarlane in the Human Resources department.

18 Allen & Overy Scheme Booklet Unpaid leave What happens if I am on unpaid leave? Unless Allen & Overy decides otherwise, if your absence is not Paid Absence, your pensionable employment is suspended and no Core Contributions, Ordinary Contributions and Matching Contributions are payable. However, unless Allen & Overy notifies you otherwise, you remain a member of the Scheme for death benefits. Secondment What happens if I go overseas or if I go on secondment? Special terms may apply, but Allen & Overy will endeavour to maintain your Scheme membership whilst you are abroad. Please contact Kellie McFarlane in the Human Resources department or your contact in the Global Mobility team who will be able to advise you. Career break What happens if I am on a career break? Your pensionable employment is suspended and no Employer s Core Contributions, Ordinary Contributions or Matching Contributions are payable. However, subject to the rest of this section and unless Allen & Overy notifies you otherwise, you remain a member of the Scheme for death benefits and if you die during unpaid leave, you would receive a cash lump sum of 2 times your Salary. If your period of career break is a duration of 12 months or more, you will no longer be eligible to remain in the Scheme. Please refer to the leaver options and death benefits detailed on pages 13 and 16. Allen & Overy LLP 2013

19 Section 9 What about my State Pension? As a member of the Scheme you are contracted in to the State Pension Scheme. Providing you have an adequate National Insurance and earnings record, you will be eligible to receive both the Basic State Pension and benefits from the State Second Pension (S2P) from State Pension Age. Will I still receive a pension from the State? Providing you have an adequate National Insurance and earnings record, benefits from the Scheme are paid in addition to any State Pension benefits you may be entitled to receive. The State Scheme is currently made up of two tiers, both of which are payable from State Pension Age. These are: State Basic Pension The State Basic Pension is a flat-rate weekly pension which, provided you have made sufficient National Insurance contributions, you will receive in addition to your benefits from the Scheme. If you have not made National Insurance contributions for the majority of your working life you could still be entitled to a State Basic Pension on a reduced basis. Information regarding the State Pension Scheme is available from your local Department for Work and Pensions (DWP), or from the Gov website at www.gov.uk in the Pensions and Retirement Planning section. State Second Pension (S2P) The second tier of the State Pension Scheme (S2P) is also paid through National Insurance contributions. It aims to provide a pension related to part of your earnings. Allen & Overy reserves the right to make changes to the Scheme in light of any future changes to the State Pension benefits and the ways in which they are paid. From 2016, the State Second Pension (S2P) is being abolished and will be replaced by a single flat-rate state pension. You can find out more about State Pensions at https://www.gov.uk/browse/working/ state-pension On 6 April 2010, the State Pension Age for women started to increase gradually from 60 to 65, to match the State Pension Age for men by 2018 the State Pension Age (SPA) for women will have reached 65, as it is for men now. From 2018 to 2020 SPA will rise to 66 for both men and women. The government has now proposed that the increase to age 67 should be brought forward and is scheduled to take place by 2026. Don t forget! You may choose to delay your claim to the State Pension after reaching your State Pension Age in order to receive a lump sum payment. If you are interested in this option you should contact your local Department for Work and Pensions (DWP). For a free estimate of your State Pension benefits, visit www.gov.uk or call 0845 3000 168.

20 Allen & Overy Scheme Booklet Section 10 Have I got everything covered? Here are a few things you can do to keep your retirement affairs in order: Make sure you have completed your nominated beneficiary details online at. You should complete your nominations when you join the Scheme, and in the future if your circumstances change. Take stock of all your pension benefits and other savings or investments, including the State Pension. Do you think you will have enough to live comfortably in your retirement? Read the Scheme s investment guide. A Guide to your Pension Scheme Investment Choices is available online at www.myallenoverpension.com. Reassess how much you currently contribute to the Scheme. Are you making the most of your opportunity to save for your retirement? Review your investment choices. Do your investment choices match your individual circumstances and attitude to risk and return? Useful information: You should update changes to your personal details (i.e. your marital status or change of address) via My Self Service. If you leave Allen & Overy and your details change, you should contact Capita directly to ensure that your member record is up to date. Scheme benefits cannot be assigned or transferred to another person or used as security for a loan. If you attempt to do any of these things, or become bankrupt, your benefits will be forfeited. The Scheme can be amended at any time by Allen & Overy if the Trustee agrees. By law, no amendment may adversely affect a beneficiary s accrued rights unless he or she consents. Allen & Overy expects to continue the Scheme indefinitely but reserves the right to discontinue it without replacing it by another scheme. The Trust Deed and Rules contain detailed provisions about beneficiaries rights in the event of discontinuance. The Annual Report and Accounts are available on request. A copy can be obtained from Kellie McFarlane in the Human Resources department. Allen & Overy LLP 2013

21 Section 11 Is there anything else I need to know? If you have a complaint or dispute in relation to any aspect of the Scheme, you should raise the matter with Kellie McFarlane in the Human Resources department, who will try to resolve the situation. If, having raised matters for the Trustee s attention, you do not feel your concerns have been adequately dealt with, the Trustee has an Internal Dispute Resolution Procedure that should be followed. A copy of the procedure may be obtained from Kellie McFarlane in the Human Resources department at Allen & Overy, 68 Donegall Quay, Belfast, BT1 3NL. If, having followed the procedure, you remain unsatisfied, you are entitled to raise your case with The Pensions Advisory Service (TPAS). If TPAS is unable to resolve matters, the complaint would go to the Pensions Ombudsman, who has statutory powers to investigate and determine any complaint or dispute of fact or law in relation to the Scheme. The address for TPAS and the Ombudsman is: 11 Belgrave Road London SW1V 1RB Telephone number for TPAS: 0845 601 2923 Telephone number for the Pensions Ombudsman: 020 7630 2200 http://www.pensionsadvisoryservice.org.uk. The Pensions Regulator The Pensions Regulator is a Government body in force to oversee the legal safeguards in place for members of group pension schemes. The Pensions Regulator is able to intervene in the running of schemes where trustees, employers or professional advisers have failed in their duties and it has the following powers: Useful information about the Pensions Regulator (and copies of the Codes of Practice it has produced so far) can be found on its website: www.thepensionsregulator.gov.uk. The Pensions Regulator can be contacted at: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW Tel: 0870 606 3636 Fax: 0870 241 1144 Email: customersupport@thepensionsregulator.gov.uk Registry and Tracing Service The Scheme has registered with the Register of Occupational and Personal Pension Schemes. To trace a pension scheme to which you have previously belonged you should contact the DWP Tracing Service at: Pension Tracing Service The Pension Service Tyneview Park Whitley Road Newcastle upon Tyne NE98 1BA Tel: 0845 600 2537 Or visit www.gov.uk for more information. to suspend, disqualify, remove and replace a trustee; to apply to the courts for injunctions, or restitution orders, to prevent the misuse or misappropriation of assets; and to impose fines on corporate bodies or individuals, and in extreme circumstances to wind schemes up.

22 Allen & Overy Scheme Booklet Glossary of Terms Additional Voluntary Contributions (AVCs) - the contributions which you can choose to make in addition to any Ordinary Contributions. These contributions will not be matched by Allen & Overy. Annual Allowance in the context of a DC arrangement, this is the maximum total annual contribution that can be paid to all your pension schemes by you or on your behalf without incurring a tax charge. For the tax year 2013/14 this 50,000. The Annual Allowance will be reduced to 40,000 for the tax year 2014/15. Core Contributions - the contributions that Allen & Overy credits to your Retirement Account on an age-related scale. Ordinary Contributions - the basic contributions that you can make which are matched by Allen & Overy. Matching Contributions - the contributions that Allen & Overy credits to your Retirement Account to match your Ordinary Contributions. Dependant - your spouse, or a civil partner (registered in accordance with the Civil Partnerships Act 2004) and anyone whom the Trustee agrees is financially dependent on you at the time of your death. Earnings Cap - the amount of your Pensionable Salary which is capped. The amount of the cap is a notional amount based on the Earnings Cap set by HMRC in tax years up to 5 April 2006. This is reviewed annually and for the tax year 2013/14 is 141,000. Incapacity - means a physical or mental deterioration which is sufficiently serious to prevent the individual from following his or her normal employment, or which seriously impairs his or her earning capacity. It does not mean simply a decline in energy or ability. Lifetime Allowance this is the overall amount of pension benefits you can have without triggering a special tax charge. Benefits built up across all of your registered pension arrangements not just the Scheme - will count towards this limit. The benefits that count towards the limit will be valued in different ways, depending on the kind of arrangement in which they have been built up and whether or not the benefit is already in payment. The Lifetime Allowance for the tax year 2013/14 is 1.5million. Individuals may build up benefits in excess of the Lifetime Allowance but the excess value will be subject to an effective tax charge of 55%. The Lifetime Allowance will be reduced to 1.25 million from 6 April 2014. Minimum Pension Age - means the minimum age of 55 under legislation that retirement benefits can be taken (other than on grounds of Incapacity) with Allen & Overy s consent. Normal Retirement Date - is your 65th birthday. A DC member who joined the Scheme before 1 April 2010 has the right to retire at age 62. Paid Absence (except maternity/paternity or adoption absence) - any period of absence authorised by Allen & Overy for any reason during which you receive remuneration from Allen & Overy. It does not include a period of membership during which you are in receipt of benefits from Allen & Overy s Permanent Health Insurance Scheme (PHI). Pension Input Period - for the Scheme, the Pension Input Period against which the Annual Allowance is tested is 1 January to 31 December every year. Pensionable Salary - is fixed on 1st January each year for the following twelve months and is the annual rate of basic Salary payable on that 1st January. All other kinds of emolument including overtime, awards and bonus payments are excluded from Pensionable Salary. Your Pensionable Salary each year must not exceed the Earnings Cap which applies on that 1st January. If you do not have a Salary at 1st January, your Pensionable Salary will be the Salary which applies to you on the first day or your employment. If you are on maternity/paternity or adoption leave on 1st January, your Pensionable Salary will be the basic Salary you would have been receiving had you not been on maternity/paternity or adoption leave. Pensionable Service - means the period that you have been an active member of the Scheme since your date of being auto-enrolled to the Scheme, (or since you elected to join if before 1 May 2008). Retirement Account the account set up for you as a member of the Scheme. Your contributions and contributions made by Allen & Overy are invested on your behalf, together with any investment return, which could be positive or negative, and after deduction of investment management expenses. Salary - means at any date the total of the annual rate of basic salary payable to you by Allen & Overy on that date. Salary usually excludes any incentive or award arrangements which a member is eligible to participate in, overtime payments, premium hours payment or other fluctuating emoluments. Your salary will be the lower of your actual rate of basic salary or the earnings cap. Spouse - means a member s widow, widower or civil partner at the date of his or her death provided that they were married to, or in civil partnership with the member before Pensionable Service ended. If a member is not survived by a Spouse the Trustee may, if Allen & Overy agrees, deem any person who in the Trustee s opinion was financially dependent upon that member to a substantial extent at the date of his or her death (or they were inter-dependent to a substantial extent) to be his or her Spouse. Allen & Overy LLP 2013