YOUR COUNTDOWN TO RETIREMENT If you haven t already considered your options and made your plans for retirement, now is the time to start because, according to our records, you are now only 8 years away from your target retirement age. You have complete flexibility over how to take your savings from the Agilent LDA Scheme but you need to tell us what you want us to do on your behalf. How do you know what is right for you? This will depend on you and your personal circumstances. This leaflet aims to get you on track helping you to think about your choices, the things you need to consider, and the actions you may need to take. You ll find links to other useful information inside, so you can find out more. MORE INSIDE WHEN DO HOW DO I WANT 3 I WANT 2 TO TAKE 1 TO RETIRE? MY SAVINGS? HOW SHOULD I BE INVESTED? PAGE 2 PAGE 3 PAGE 4
3 WHEN DO I WANT TO RETIRE? The Scheme s Normal Retirement Age (NRA) is 60. Although the Scheme uses this age when designing certain features (the investment lifestyle strategy for example see page 4), this does not mean you need to take your Scheme savings then. Your choice will depend on your personal circumstances, including when you plan to stop working. You can currently take your savings at any age from age 55 55 From 2028, this will rise to age 57, and then will always be 10 years below the State Pension Age The Scheme s Normal Age (NRA) is age 60 You can delay taking your savings until age 75 57 60 75 Remember that the earlier you take your savings, the smaller they will be. This is because your account will have less time to grow and you would have paid in less. In addition, if you decide to buy an annuity, it is likely to be paid for longer. Research also tells us that we typically underestimate our life expectancy by 5-8 years; so it s even important to think about things like your health now. TARGET RETIREMENT AGE Think of the age at which you plan to take your benefits as your target retirement age. This is particularly important when it comes to your investment choice particularly if you are invested in a lifestyle option as it determines when your account moves between investing in funds that aim to maximise growth (the Growth phase) and the Pre-retirement phase where your investments align with how you plan to use your savings. If your investments change too soon, you may lose out on potential growth; if they change too late, you would be exposed to a higher level of investment risk just before you want to take your benefits. If you have not actively chosen otherwise, your target retirement age will be age 60. If you don t think that is the most likely retirement date for you, you need to update your record. Remember, you can still take your benefits whenever you want to, but remember, if you are invested in a lifestyle strategy, your target retirement age drives your investments. It s therefore important that this reflects your plans. Need to update your target retirement age? If you are invested in a lifestyle strategy, log on to your account at www.makeagooddecision.co.uk If you are invested in self-select, contact the administration team. See page 6 for contact details. SO HOW DO YOU KNOW WHEN YOU WILL BE ABLE TO RETIRE? THE CHECKLIST BELOW MAY HELP. Review your total retirement savings This could include: Your Agilent LDA Scheme pension. The State Pension (see opposite). Pension savings you have with previous employers. Private pension(s). Savings outside of a pension scheme that you plan on using in retirement. Investments you may have, such as rental income or shares. How much will you need in the future? Create a realistic budget. Think about what you plan on doing in retirement. Use the online budget planner at www.moneyadviceservice.org. uk/en/tools/budget-planner. This type of budget planner will help you consolidate how much money you ll have coming in when you retire and what you ll need to spend it on. Check when you re due to receive your State Pension Use the State Pension calculator at www.gov.uk/calculate-statepension: See when you ll be eligible to receive your State Pension and For an estimate of your basic State Pension (based on today s money). Are your sums adding up? If you think you ll have enough to meet your needs at your target retirement age that s great. If you re falling short, it s never too late to take action. If you re still an employee, the Scheme is a flexible way of saving more, with the valuable benefit of tax relief and NI reductions. You can: Increase your SMART Pension contributions once a year (if you re not already contributing 4%). Pay Additional Voluntary Contributions (AVCs) at any time. Increase your target retirement age. 2
GET READY FOR RETIREMENT Use our 3-step countdown to get you on track 2 HOW DO I WANT TO TAKE MY SAVINGS? Set out below is a summary of your options. You can choose one, or a combination of the options. To see the value of your savings, log on to your account at www.makeagooddecision.co.uk > Take me to my account VALUE OF YOUR ACCOUNT ANNUITY Take up to 25% as a tax-free lump sum... Then secure an income An annuity provides you with secure income INCOME DRAWDOWN Draw down your savings over time You keep your savings invested and withdraw cash as and when you need it You choose what to do with the cash you have drawn down You can choose to take tax-free cash in a single lump sum or in stages as you draw down your savings The tax-free cash cannot exceed 25% of your account Drawdown is only available if you transfer your account out of the Scheme. Similarly, the Scheme is not able to offer multiple, taxable cash lump sums and you would need to transfer out to make use of this option. CASH Take up to 25% as a tax-free lump sum... Then withdraw all of your savings at once You can choose what you want to do with the cash you withdraw For all three options, after any tax-free cash, any income will be taxed at your marginal rate. KNOWING WHAT IS RIGHT FOR YOU Choosing how you take your savings is an important decision and the right option for you will depend on your personal circumstances. Now you know your options, take some time to weigh up the pros and cons. Here are just a few things you may wish to consider: ANNUITY INCOME DRAWDOWN CASH LUMP SUM Advantages Secured income for a fixed term or until you die. There are many types available and you can buy an annuity that provides income for your dependants if you die. You can keep your savings invested with the objective to grow their value and only take a certain amount each year. This may reduce how much tax you pay. You choose to spend or invest your savings as you wish. Disadvantages The value for money you receive can fluctuate depending on market factors at the time you buy an annuity. You have to monitor your investments and manage your income throughout your retirement. As this is taxed at your marginal rate in the year you take your savings, this may mean that you are subject to higher than normal income tax rates. Use the decision tree at www.makeagooddecision.co.uk to find out more and to help you consider what might be right for you. 3
1 HOW SHOULD I BE INVESTED? How you invest your account needs to be aligned with your personal circumstances. Set out below is a summary of your choices. Your decision will depend on many factors, including your attitude to risk and control; and once you approach retirement, how you plan to take your savings. CHOOSE YOUR LEVEL OF CONTROL LOWER HIGHER Lifestyle Help me do it Investments automatically switch from the Growth phase to a Pre-retirement phase as you approach retirement Self-select Leave me to it Different asset classes and management approaches 1 Choose a Growth phase option that s right for you Choose the fund(s) you want to invest your account in and when 2 High Risk and High Growth Medium-High Risk and Medium-High Growth Medium Risk and Medium Growth Choose a Pre-retirement phase option that s right for you 7 years before your target retirement age L&G 40:60 Global Equity fund L&G UK Equity fund L&G Ethical UK Equity fund Schroder Life Diversified Growth fund L&G Pre-Retirement fund L&G Over 5 Year Index-linked Gilts fund L&G Cash fund Annuity option Income drawdown option Cash option You ll see that these align with your retirement options on the left REMEMBER Once you ve decided how you d like to take your savings, review your investment choices to make sure they align. And remember, if you do not choose otherwise, you ll automatically be invested in the default lifestyle strategy which invests in the Medium-High Risk and Medium-High Growth fund during the Growth phase, the Annuity option during the Pre-retirement phase and has a target retirement age of 60. If you would like to take your benefits in a different way, investing in the default lifestyle strategy will not provide you with the best value for money. Read the Investment guide in the library section at www.makeagooddecision.co.uk to find out more about your investment choices. 4
YES YES MAKE A GOOD DECISION TODAY Are you within 10 years of your target retirement age? (the default age is 60 in the Scheme) Do you want a secure income from your Scheme benefits? I WANT A SET, SECURE, INCOME Sounds like an annuity (or pension might be for you). WHAT S AN ANNUITY? YES NO I WANT TO TAKE MY SAVINGS ALL AT ONCE. Click + to expand previous choices NO, Does this sound right for you NOT and your personal situation? REALLY Then you should look at other options or combining an annuity with another option. Do you want to keep your savings invested and have flexible income? APPROACHING RETIREMENT I WANT SOME FLEXIBILITY FOR MY FUTURE NO NO YES I WANT TO KEEP MY SAVINGS INVESTED AND TAKE CASH AS AND WHEN I NEED IT. SCHEME LIBRARY + Go back to start + THE LEAD UP TO RETIREMENT: WHAT YOU NEED TO DO YOU ARE HERE 8 years before your target retirement age START OF PRE- RETIREMENT PHASE 7 years before your target retirement age 6 MONTHS BEFORE RETIREMENT Pre-retirement information RETIREMENT! Age 60 or your chosen target retirement age 8 7 YEARS TO GO 0.5 0 Follow the 3 countdown to retirement steps Use the decision tree (see below) Make investment changes on epa If you are invested in a lifestyle strategy, you need to make sure you have selected the right Pre-retirement option and target retirement age. See pages 3 and 4 for details. If you are invested in self-select funds, these also need to align Decide how you d like to take you savings at retirement You will receive details of your choices and information about Pension Wise Access your savings makeagooddecision.co.uk Everything you need is in one place: Log on to epa to manage your account online TWO KEY SECTIONS Focus on the key things you need to consider See and use helpful planning tools Scheme documents at your fingertips Access your account VIEW UP-TO-DATE Account balance Current investments Contribution summary REVIEW AND UPDATE Investments Nomination details Address details EXPLORE YOUR PATH TO RETIREMENT! A GUIDE TO YOUR SCHEME SAVINGS START AGILENT TECHNOLOGIES LDA UK LIMITED PENSION SCHEME 5
HELP AND ADVICE FOR QUESTIONS ABOUT YOUR BENEFITS THE ADMINISTRATION TEAM email: agilentldapensions@towerswatson.com phone: 0113 390 7172 post: Agilent Technologies LDA UK Ltd Pension Scheme Towers Watson PO Box 545 Redhill Surrey RH1 1YX THE PENSIONS DEPARTMENT Contact Heather Wright at: email: heather_wright@agilent.com phone: 0131 452 0613 post: Agilent Pensions Department Agilent Technologies LDA UK Limited 5 Lochside Avenue Edinburgh Park Edinburgh EH12 9DJ HELPFUL WEBSITES www.moneyadviceservice.org.uk www.pensionsadvisoryservice.org.uk www.gov.uk FINANCIAL ADVICE By law, the Trustees, the Pensions Department and the administration team cannot give you financial advice. You can find a local adviser at www.unbiased.co.uk Some organisations offer free financial advice: www.moneyadviceservice.org.uk/en/articles/ free-financial-advice-your-options NEED GUIDANCE? The Government will be providing free guidance via phone, online or face-to-face to help you through your retirement decisions. This is known as Pension Wise. You ll receive more information as you approach retirement. Find out more at www.gov.uk/pensionwise If you would like advice now, we recommend you speak to an impartial financial adviser. See above details of how to find one. 6 April 2015