W I N T ER 2017 A Pesio Pla Report to Members o behalf of the Avo Rubber Retiremet ad Death Beefits Pla Your Pesio. Your Future. IN THIS ISSUE 2 Welcome from the Chairma of the Trustees 3 Key Facts ad Figures from 2016 4 Defied Beefit Sectio 4 Defied Cotributio Sectio 5 Maage your Pesio olie 6-7 Latest News 7 Trustees & Pla Advisors 8 www.avo-rubber.com/pesios Further iformatio & Cotacts
Message from the Chairma of the Trustee Board Miles Igrey-Couter Chairma of the Trustee Board Welcome to the latest Avo Pla Trustee Newsletter. As Avo Rubber has cotiued to grow, the focus of the Trustee Board has chaged ad this is reflected i this year s ewsletter. The Pla s Defied Cotributio (DC) sectio ow has well over 200 members ad this ewsletter is addressed to them i additio to our Defied Beefit (DB) sectio members. The last year has see a icreased focus i the UK o the goverace stadards beig applied to DC schemes ad I am pleased to report that the Avo DC sectio was successfully audited agaist these ew stadards for the first time durig the year. The Pla s DC sectio ivestmets have cotiued to be maaged by Stadard Life over the last year. We have bee very pleased with the stadard of service provided to members by Stadard Life but I take this opportuity to remid all of our DC members to esure they review the fuds they are ivested i, particularly if you are ivested i the default fud. You ca log oto the Stadard Life portal to see your ivestmets, access correspodece from Stadard Life ad create illustratios of your estimated pesio at retiremet. Curret employees will be ivited to presetatios o their DC pesios i the comig moths to reiforce this message. Followig the itroductio by the Govermet i 2015 of ew pesio rules o accessig pesio beefits, we have see a icreased level of equiries to our DB sectio admiistrators Mercer durig the year relatig to trasfer values ad optios at retiremet. As a remider the summary of these chages is reproduced later i this ewsletter. We have moitored Mercer s service levels durig this period ad, whilst the iitial icrease i the level of equiries created a backlog which affected respose times, this was quickly addressed by Mercer. Activity levels remai high ad DB members with equiries are remided that each retiremet quotatio costs the Pla moey ad you will be expected to talk to Mercer about your requiremets before multiple quotes are processed for idividual members. This is to esure members are provided with the iformatio they eed to make decisios whilst miimisig the cost to the Pla. This year we have reviewed the fiacial stregth of Avo Rubber p.l.c. as part of the 2016 actuarial valuatio of the Pla s Defied Beefit liabilities. This is the process where the Trustee Board works with the Scheme Actuary ad the compay to value the assets ad liabilities of the Pla, with the aim of makig sure that the compay s future cotributios address ay deficit over time. This year the process also icluded a detailed review of the ivestmet strategy for the DB sectio. Discussios with the Compay aroud cotributio levels have bee very positive ad the results of the valuatio will be provided later i the year. The make-up of the Trustee Board has chaged oce agai sice the last ewsletter with the departure of Sarah Matthews-DeMers, Avo s Associate Group Fiace Director. I thak Sarah for her sigificat cotributio to the Trustee Board ad wish her well for the future. There are ow two vacat Compay omiated positios o the Trustee Board which we are workig with the Compay to fill i the ext few moths. Due to the chages to the Compay omiated positios, we have agreed to exted the terms for the two member omiated Trustees for a further 12 moths. The day to day maagemet of the DB sectio has cotiued successfully durig the last year. We have, as usual, worked closely with our ivestmet cosultats at Mercer to esure the moey the Pla has ivested is deliverig the returs eeded to pay pesios ow ad i the future. Our website icludes a lik to this ewsletter ad other iformatio relatig to the Pla, which ca be accessed at www.avo-rubber.com/pesios. If there is aythig else you would like to see i future editios, or if you have ay commets about this ewsletter or the Pla i geeral, please cotact the admiistratio teams. Cotact details ca be foud o the last page. 2 PesioNews WINTER 2017
Key facts ad figures Defied Cotributio sectio members as at 31 March 2016 Percetage of assets split by ivestmet maager as at 31 March 2016 Total umber of members: Brought forward from last year 179 New etrats (ew employees) 52 8% 8% 21% Exits (24) 9% Active members o 31 March 2016 207 Deferred Defied Cotributio members with preserved pesios 79 17% 26% 11% Defied Beefit Sectio members as at 31 March 2016 Ex-members with preserved fial salary pesios Year eded 31 Mar 15 Year eded 31 Mar 16 1,619 1,560 BlackRock LDI fuds BlackRock Dyamic Diversified Growth Fud Pesioers 2,049 2,032 Skage Global II Fud Total 3,668 3,592 Cash Fisbury High Yield Fuds (Shekma) Summary of moey comig i ad goig out of the Pla Majedie Asset Maagemet First Eagle Year eded 31 Mar 15 (000) Year eded 31 Mar 16 (000) Value of the Pla at start of year Moey comig i less moey goig out Chage i market value of ivestmets Value of the Pla at ed of the year 299,547 325,238 (16,575) (15,072) 42,266 (3,638) 325,238 306,528 WINTER 2017 PesioNews 3
Defied Beefit (DB) sectio focus Actuarial valuatio The Trustee Board is resposible for esurig that sufficiet cotributios are paid ito the Pla to cover beefits payable i accordace with the Rules ad to build up fuds to pay for future beefits. Sice the closure of the DB sectio of the Pla to future accrual i 2009, beefits i the DB sectio are paid for by a combiatio of cotributios paid by the Compay ad ivestmet icome eared. The amout of cotributios to be paid is agreed betwee the Compay ad the Trustee ad recorded i a Schedule of Cotributios. The Trustee Directors are advised by the Scheme Actuary who helps them agree appropriate assumptios with the Compay for calculatig cotributios. Oce the assumptios are agreed the Scheme Actuary assesses the amout of moey i the Pla relative to the beefits that must be paid out, both ow ad i the future. This assessmet is kow as a actuarial valuatio of the Pla, ad is ormally carried out every three years. A actuarial valuatio as at 31 March 2016 has bee udertake which icluded discussios with the Compay about the cotributios required i future. We will write to you with the usual Summary Fudig Statemet followig the coclusio of the exercise later i the year, but we are pleased to report that we have agreed a sigificat icrease i Compay cotributios. Alogside the actuarial valuatio, we have also cosidered the future ivestmet strategy for the Pla both i the short term ad loger term ad have cosulted the Compay o some proposed chages (as we are required to do). We are workig with our ivestmet advisers to implemet the agreed chages. Defied Cotributio (DC) sectio focus Beefits i the Defied Cotributio sectio are determied by a combiatio of cotributios paid by members ad the Compay ad ivestmet icome eared. The Compay pays a amout specified i the Rules that depeds o each member s chose cotributio rate. This is a valuable beefit provided by the Compay ad we wat members to be i a positio to get the best possible outcomes from this. We have partered with Stadard Life to provide a wide rage of fuds for members to ivest i the DC sectio has a wide rage of fuds you ca choose to ivest i ad Stadard Life offer a great olie portal to access all the iformatio you might eed i relatio to your persoal beefits ad the optios available to you. For further iformatio regardig joiig the pesio pla, receivig tax beefits from the Govermet ad also receivig additioal cotributios from the Compay you ca visit the Stadard Life Avo portal at: www.stadardlifepesios.com/avorubber 4 PesioNews WINTER 2017
Maage your pesio olie at: www.stadardlife.co.uk/1/site/employeezoe/logi What ca I do olie? Whe you log o, you ca: The Trustee Board has spet a sigificat amout of time over the last 12 moths lookig at the operatio of the DC sectio ad cosiderig the actios we eed to take to improve the member experiece. If you have ay ideas or suggestios you feel worth our cosideratio please cotact us. We have idetified some clear actios we will be takig i the ear future, icludig: Reviewig the default fud to esure it remais suitable for the Avo membership. Aroud 81% of our Pla members are curretly ivested i the default optio. Reviewig the rage of fuds available to members. Havig a rage of fuds is desirable to esure members have sufficiet optios for the ivestmet actios they may wat to take. However, havig too may fuds ca be cofusig ad/or a little dautig for some members ad a big time commitmet for the Trustee i terms of moitorig these fuds. A large proportio of the fuds available are ot curretly used by our members so we ited to review the fuds to esure we have a targeted (but still wide) rage of fuds available makig it easier for members to uderstad the choices they have. Also our Cyclical Automatic Re-erolmet Date, previously kow as Trieial Review, which occurs approximately every three years, is due this year. To keep you up to date ad iformed regardig this ad the other actios we are lookig to put i place we will be lookig to coduct some employee briefigs this sprig watch this space! Check your pesio value You ca see what your curret pesio value is, ad what it might be worth whe you retire. This will help you keep o track ad see if you eed to chage your paymets. Check your paymets Keep up to date with your paymets ad see if you eed to chage the amout you re payig. Review your ivestmets You ca see how your fuds are performig ad chage your ivestmets olie. Update your details Keep your persoal iformatio ad cotact details up to date so we ca keep i touch. How do I get access? Your userame ad password Oce you receive your certificate of membership, you ca register for olie servicig by clickig o the lik below. You ca log i ad maage your pesio aytime durig the followig hours: Moday to Friday, 7am - midight. Saturday ad Suday, 7am - 11pm. Get the mobile app The Stadard Life mobile app lets you: View your pesio ad ay other ivestmets you have with Stadard Life. Browse cofidetly. WINTER 2017 PesioNews 5
Latest News Lifetime Idividual Savigs Allowace (LISA) From April 2017, ayoe uder age 40 will be able to save up to 4,000 i a LISA up to the age of 50. The Govermet will top this up with a additioal 25% (of the amout saved) each year. The moey ca the be accessed before the age of 60 to help towards buyig a first home, or from age 60 for retiremet. Savers will be able to withdraw the moey for ay other purpose at ay time, but they will lose the 25% Govermet bous ad face a 5% tax charge. Further iformatio is available o the Govermet website at: www.gov.uk/govermet/publicatios/ lifetime-isa-explaied Pesio tax allowaces The Aual Allowace is the total amout of pesio savigs you ca make each year without icurrig a tax charge. For most people it is 40,000 for the 2016/17 tax year. However, with effect from 6 April 2016, the Aual Allowace was reduced for ayoe with adjusted icome of more tha 150,000. (Adjusted icome is earigs plus the value of pesio beefits built up.) Also, if you choose to draw dow from your pesio beefits, you will be automatically subject to a reduced Aual Allowace of 10,000. The Lifetime Allowace is the amout of overall pesio savigs you ca build up durig your lifetime which qualifies for full tax relief. With effect from 6 April 2016, the Lifetime Allowace reduced from 1.25 millio to 1 millio. If you take beefits above this level you will face a tax charge. Your pesio beefits from all sources (icludig AVCs, other employers pesio plas ad ay persoal pesio arragemets, but excludig the State Pesio) are measured agaist the Lifetime Allowace whe you retire. Tax thresholds From April 2017, the tax-free persoal allowace will icrease to 11,500 ad the higher rate icome tax threshold will rise to 45,000. Brexit The outcome of the EU referedum last year was a surprise to may ad it has itroduced ucertaity across fiacial markets. Whe there is ucertaity, it is reasoable to expect some volatility that is, short-term ups ad dows - o some ivestmets. Immediately after the result we saw some big chages i the value of some shares ad sterlig, but this is ot uusual. It s a example of how the markets react to differet evets aroud the world. Overall, ivestmets always go up ad dow over time. Some of the chages we have see may be loger lastig however, so if you have DC beefits (icludig AVCs), ow is a good opportuity to take stock, review how they are ivested ad make ay chages you feel are ecessary. Remember: if you are usure how to ivest, cosider talkig to a idepedet fiacial adviser (see page 8). If you are i the Defied Beefit (DB) sectio, as a Trustee Board, we are resposible for decidig how the DB assets are ivested, but we factor volatility i the markets ito our plaig. We have i place a broad ad robust ivestmet strategy that is desiged to support the Scheme eve whe fiacial markets are goig through a difficult period. We will cotiue to moitor the ivestmets with our advisers ad make ay chages we believe are ecessary. 6 PesioNews WINTER 2017
Meet the Trustees Recap o retiremet optios I the last member ewsletter, we told you about some chages itroduced i April 2015 i relatio to how you ca access your DC beefits. You ca buy a auity with your DC beefits, to provide you with a guarateed, stable icome for life (but you o loger have to do this). You ca choose to take your DC beefits as cash oly, either i istalmets or as a oe-off sum. You ca take a icome as ad whe you wat to ad cotiue to ivest the rest, kow as icome drawdow (you will eed to trasfer out of the Pla ito aother arragemet to do so). I all cases, you ca take up to 25% of your DC beefits as a tax-free cash sum (uder curret law). You ca also combie ay of the optios to suit your circumstaces, but ote that you may eed to trasfer out of the Pla to do so. Members of the Defied Beefit sectio ca also access these optios by trasferrig beefits out of the Pla ito a suitable DC arragemet. We strogly recommed that you take idepedet fiacial advice before proceedig with a trasfer out ad if the value of your beefits is 30,000 or more, you are legally required to take idepedet fiacial advice before doig so. The Govermet has also recetly take steps to help savers uderstad the ew retiremet optios. If you are over age 50, have beefits withi a DC scheme ad are iterested i takig advatage of oe of the ew choices at retiremet you ca cotact Pesio Wise, a free ad impartial service provided by the Govermet. To arrage a appoitmet or fid out more visit: www.pesiowise.gov.uk Miles Igrey-Couter (Chairma) Eric Fieldig (Member Nomiated) David Little (Member Nomiated) Rob Wills (Compay Nomiated) There are ow two vacat Compay Nomiated positios o the Trustee Board which we are workig with the Compay to fill i the ext few moths. The Pla s advisors Auditor Bakig Scheme Actuary Susa Hoare FIA Ivestmet Maagers Defied Cotributio Provider Savigs There will be a ew savigs scheme for people o lower icomes, called Help to Save. The savigs limit for ISAs will also icrease to 20,000 from April 2017 ext year. Fial Salary Admiistrator & Ivestmet Cosultat Legal Advisor WINTER 2017 PesioNews 7
Further iformatio By law, o-oe ivolved i your Scheme ca give you advice about your pesio arragemets. If you are thikig of makig ay chages to your pesio arragemets at ay time, you should obtai as much iformatio as you ca ad thik about obtaiig idepedet fiacial advice. The Fiacial Coduct Authority (FCA) has a website www.fca.org.uk where you ca fid out more about fidig ad usig a suitably qualified fiacial adviser. Alteratively, the website www.ubiased.co.uk will help you fid a adviser i your area. DEFINED BENEFIT PLAN ADMINISTRATOR DEFINED CONTRIBUTION PLAN ADMINISTRATOR Mercer Cosultig Limited, 1 Whitehall Quay, Whitehall Road, Leeds, LS1 4HR Member Helplie: 0800 046 6183 Email: avo.rubber@mercer.com Stadard Life, Dudas House, 20 Brado Street, Ediburgh, EH3 5PP Member Helplie: 0800 634 7479 www.stadardlifepesios.com/avorubber TRUSTEE REPORT & ACCOUNTS The Trustee Directors publish a formal Report ad Accouts each year that covers some of the items outlied i this ewsletter. Please ask Mercer if you would like a copy or a copy of the Fudig Review by the Scheme Actuary. You should write to Mercer if you would like to see the Pla s Trust Deed ad Rules or if you wat a further copy of the curret Members Booklet. All of these documets are available o the Pla s website. www.avo-rubber.com/pesios INTERNAL DISPUTE RESOLUTION If you do have ay problems with the Pla it is hoped that these ca be resolved by the Admiistrators. If ecessary, however, the Trustee Directors have a formal process for dealig with member disputes. Further details of this are available from Mercer or via our website. You may also be able to obtai assistace from the followig exteral bodies: The Pesios Advisory Service Ltd (TPAS) TPAS is available to assist members ad beeficiaries of the Pla with difficulties that they may have failed to resolve with the Trustee Directors or Admiistrators. www.pesiosadvisoryservice.org.uk The Pesios Ombudsma The Pesios Ombudsma has the power to ivestigate ad decide upo complaits ad disputes ivolvig occupatioal pesio schemes. It will ormally expect to act oly whe a matter has bee through the Pla s Iteral Dispute Resolutio Procedure ad referred to TPAS ad ot satisfactorily cocluded. www.pesios-ombudsma.org.uk The Pesio Tracig Service The Pesio Tracig Service eables ex-members of schemes with pesio etitlemets, ad members depedets, who have lost touch with earlier employers. If you eed help to locate a former employer s scheme, please cotact: The Pesio Service 9, Mail Hadlig Site A, Wolverhampto, WV98 1LU Telephoe: 0345 6002 537 www.gov.uk/fid-lost-pesio State Pesio If you would like a forecast of the State Pesio payable to you, please cotact: Future Pesio Cetre, The Pesio Service 9, Mail Hadlig Site A, Wolverhampto, WV98 1LU Telephoe: 0345 3000 168 www.gov.uk/future-pesio-cetre 8 PesioNews WINTER 2017