The Aviva Matching Share Plan #savesmarter Please note that this communication and its content is for information only. It does not constitute personal, financial or tax advice.
More expect for than you thanyou Less think Our Aviva Matching Share Plan (MSP) enables employees to become owners of our Company. It s an opportunity to buy Aviva shares out of your gross pay each month. Aviva will award you TWO free shares for every ONE share you buy with the first 5 to 40 you invest.
Summary of the key features You can buy Aviva shares on a monthly basis using contributions taken directly from your gross (before tax and National Insurance Contributions (NIC) deductions) pay You can choose to invest between 5 and 150 per month Your gross monthly contributions will be used to buy Aviva shares (called Partnership Shares) on your behalf Aviva will award you two Matching Shares for every Partnership Share you buy with the first 5 to 40 you invest each month To keep your free Matching Shares, you need to hold both your Partnership and Matching Shares in the plan for three years from their Share Purchase Date (1) (1) This only applies if you remain employed by Aviva. Please refer to the FAQs on the Aviva Share Plans site regarding leavers for more information.
Benefits of the Matching Share Plan You are not tied in and you can change your monthly contribution at any time There are tax benefits from being in the MSP:»» After three years you can sell your Partnership Shares and related free Matching Shares. The sale will be subject to Income Tax and NIC»» After five years you can sell your Partnership Shares and related Matching Shares from the Plan without incurring Income Tax, NIC or Capital Gains Tax (CGT) You are entitled to dividends that may be declared by Aviva on the shares you hold in the share plan. You can either receive dividends as cash, or have additional shares awarded into your plan you decide The table below illustrates the potential benefits of the MSP. The Matching Shares are awarded to you on a two-for-one basis on the first 5 to 40 of Partnership Shares you buy each month. The example assumes a share price, for illustrative Gross Monthly Partnership Share contribution purposes only, of 4.00 per Aviva share: 25 40 75 150 Net cost for a basic rate taxpayer* 17.00 27.20 51.00 102.00 Net cost for a higher rate taxpayer** 14.50 23.30 43.50 87.00 Number of Partnership Shares bought this month 6 10 18 37 Matching Shares awarded by Aviva 12 20 20 20 Total Plan Shares added to the trust this month 18 30 38 57 Total value of Plan Shares on the Share Purchase Date 72.00 120.00 152.00 228.00 Residual contribution carried forward to next month*** 1.00 0.00 3.00 2.00 *Assuming marginal rates of 20% Income (including Scottish Income Tax where applicable) Tax and 12% NIC. **Assuming marginal rates of 40% Income Tax and 2% NIC. ***The total number of Partnership Shares purchased is calculated as two separate transactions: one for the first 40 (which qualify for Matching Shares) and one for any amount over the first 40. Money contributed will only be used to buy a whole number of shares. Any residual contribution left over after both these transactions will be carried forward to the following month. In some instances the combined amount carried forward will equal or exceed the cost of a share.
How it works Step one Choose the amount you wish to contribute to buy Partnership Shares Your contribution can be any amount between 5 and 150 per month from your gross pay (before tax and NIC are deducted) If 150 is more than 10% of your gross pay each month, the maximum you can contribute is 10% of your gross monthly pay You can change the amount you contribute each month at any time Applications to join must be made by the 10th of month in order for the deduction to made from that months salary. Applications received after the 10th will apply to the following month s salary 432
2How it works Step two The Trustee buys Partnership Shares on your behalf to be held in the Plan Your monthly contributions are used to buy Aviva shares each month at the market price Shares will be bought on or around the 12th day of the following month this is the Share Purchase Date The Share Purchase Date is the qualifying date for determining how long the Plan Shares have been held Monthly contributions will be used to buy whole shares only. Any residual money which is insufficient to buy a whole share following the Partnership Share purchase will be rolled over and added to the contribution for the following month (please see the case studies for examples of how this might work in practice) 43
32 How Welcome Features Benefits How it works How to join Case studies Q&As MSP vs. SAYE Glossary Notes it works Step three Aviva awards you additional Matching Shares For the first 5 to 40 you contribute towards Partnership Shares each month, Aviva will award you two Matching Shares for each Partnership Share bought No Matching Shares are awarded for any contributions you make in excess of 40 per month Matching Shares are awarded on the same Share Purchase Date as Partnership Shares each month 4
432 How Welcome Features Benefits How it works How to join Case studies Q&As MSP vs. SAYE Glossary Notes it works Step four Plan Shares are held in a trust Your Partnership Shares and Matching Shares will be held in a trust for you by Computershare, the Trustee and Plan Administrator You can instruct the Trustee, at any time, to either sell your Partnership Shares or have them transferred into your name and receive a share certificate If you sell or withdraw your Partnership Shares within three years of the Share Purchase Date you will lose the corresponding Matching Shares (1) You can instruct the Trustee to sell your Matching Shares three years from the Share Purchase Date. Please note, any Plan Shares held for under five years are subject to Income Tax and NIC when they are sold. If you transfer shares out of the trust (to a personal share account or request them as a share certificate), they will also be subject to Income tax and NIC Once you have held your Partnership Shares and/or Matching Shares in the trust for five years or more, you can withdraw them free of Income Tax and NIC. If sold directly from the trust, they are also free of Capital Gains Tax (CGT). Your CGT base cost for any subsequent sale will be the market value of the Plan Shares when withdrawn from the trust Any dividends declared by the Company will be paid on all shares held in trust on the relevant dividend record date. You can choose to receive dividends in the form of cash or reinvested into shares (1) This only applies if you remain employed by Aviva. Please refer to the FAQs on the Aviva Share Plans site regarding leavers for more information.
How to join The Plan You can join the Matching Share Plan at any time. To join, simply: 1 2 Have your SRN and PIN to hand Shareholder Reference Number (SRN) - which you can find on your last communication from Computershare Plan Managers PIN - if you have forgotten your PIN, you can obtain it by clicking on the Forgotten PIN link on the site and following the online instructions Visit: Go to the Employee Portfolio page - where you will see your invitation to join the Plan MSP 3 To the right of the screen there are two links: View Details - will take you to the page where you can view the Plan Brochure along with your personal savings limits Apply - will take you through the enrolment process where you will be asked to confirm your acceptance of the Terms and Conditions of the Plan before entering your enrolment information Once you have completed the enrolment process an email will be sent to your specified email address confirming your application details. If you cannot find your SRN or have any problems with applying online, you can call the Aviva Share Plans helpline on 0371 495 0105* for further assistance. *Lines are open from 8:30am to 5:30pm, Monday to Friday (excluding bank holidays). Calls cost the same as calling a 01 or 02 number. If you have a free minutes call package, check with your provider that 03 numbers are included.
Case Studies To help you understand how the Plan works in practice, we have set out three case studies. More than you expect for less than you think? Click a quote to find out more.
More than you expect for less than you think Kate has worked for Aviva for two years and earns 17,500 per year. Kate decides to make contributions from her gross pay of 15 per month. She chooses to receive her future dividends in cash. For illustrative purposes we assume a constant share price of 4.00. First month Kate checks the Aviva Share Plan site to see what her investment bought her: Partnership Shares 3 @ 4.00 12.00 The following year In January the following year, Kate takes advantage of the Plan s flexibility to stop her contributions but restarts them again in March, increasing her contribution to 18 per month. Matching Shares 6 @ 4.00 24.00 Share Value 36.00 After 3 years Total Plan Shares 444 Basic rate Tax payer Kate invests 15 a month: this reduced her net pay by only 10.20. That s just over 2.50 per week Third month ( 2.00 rolled over from previous month) Partnership Shares 4 @ 4.00 16.00 Matching Shares 8 @ 4.00 32.00 Share Value 48.00 Remember 2-4 -1 on matching shares! Cost of Plan Shares 403.92 Total Value of Plan Shares 1,776.00 Kate could now sell her first Partnership Shares without losing her first Matching Shares. In another two years she will be able to sell her first Partnership Shares and Matching Shares free of Income Tax, NIC and CGT. So, over 3 years, Kate s investment of 403.92 has a potential share plan value of 1,776.00, and don t forget her dividend payments!
More than you expect for less than you think Robert is a higher rate tax payer, wanting to maximise the tax savings he could make through the Plan while building up his holding of Aviva shares. He therefore contributes 150 per month and chooses to receive dividends on his Plan S hares in the form of additional shares. For illustrative purposes, we assume a constant share price of 4.00. First month Robert checks the Aviva Share Plan site to see what his 150 investment bought him: After 3 years Remember, Robert has been reinvesting his dividends, so after three years: Partnership Shares 37 @ 4.00 148.00 Total Plan Shares 2,449* Matching Shares 20 @ 4.00 80.00 Cost of Plan Shares 3,132.00* Share Value 228.00 Total Value of Plan Shares 9,796.00* Basic rate Tax payer Robert invests 150 a month: this reduced his net pay by only 87. After 6 months Partnership Shares 225 @ 4.00 900.00 Matching Shares 120 @ 4.00 480.00 Share Value 1,380.00 * These figures assume a dividend has been paid and reinvested every six months. The figures assume reinvestment of an interim dividend of 6.75p and a final dividend of 14.05p each year (as paid by Aviva in the 2015 financial year). Please note, Aviva dividend payments will vary and are not guaranteed. This assumption has been made for illustrative purposes only. So over 3 years Roberts investment of 3,132.00 has a potential share plan value of 9,796.00!
More than you expect for less than you think The case study below illustrates the impact of a falling share price. What if the share price falls? Caroline is a basic rate tax payer, contributing 25 per month into the Plan. Caroline has been participating in the Plan now for six months and she is concerned what might happen if the share price falls. She is worried that she could lose out by being in the Plan, and so gets her calculator out. Basic rate Tax payer Caroline invests 25 a month and has been in the plan for six months. Month Share Price on Share Purchase Date Number of Partnership Shares bought Matching Shares Awarded Residual contribution carried forward October 3.00 8 16 1.00 November 2.90 8 16 2.80 December 2.50 11 22 0.30 January 2.21 11 22 0.99 February 1.62 16 32 0.07 March 1.50 16 32 1.07 TOTAL 70 140 Total number of Plan Shares held in the trust at the end of the six month period = 210 Total contribution = 25 x 6 = 150 gross (net cost 102) 210 x lowest share price ( 1.50) = 315 Caroline is relieved to find that the share price would actually have to fall below 50p for her to lose out, assuming she leaves the shares in the Plan for 5 years.
Questions and answers Am I eligible to participate in the Plan? You are eligible to participate in the Plan provided you are a UK resident tax payer and you are an employee of a Participating Company. The Participating Companies are currently Aviva Employment Services Limited and Aviva Investors Employment Services Limited. You cease to be eligible to participate if you cease being UK tax resident, or cease being employed by a Participating Company. I work part-time. Will I be able to participate in the Plan? Yes, subject to the same contribution limits as full-time employees. What happens if I am on maternity leave or long-term sick leave? You will be able to participate in the Plan provided you are being paid salary, maternity pay or sick pay through payroll. Your monthly contributions cannot exceed either 150 or 10% of your monthly pay, whichever is the lower. Where these limits would otherwise be breached, your contribution will be scaled down accordingly. Under the Plan rules there is no opportunity for you to make up for missed or reduced contributions at a later date when you return to full pay. Are there any limits to my monthly contribution amount? You can contribute between 5 and 150 per month, or up to 10% of your gross monthly pay if this is less than 150. All Partnership Share deductions must be in whole pounds. All deductions are taken directly from your gross pay by payroll. In the event that you contribute more than the limits, any excess will be repaid to you as soon as possible, subject to appropriate Income Tax and NIC withholding. Can I change my mind once I ve joined? Can I change, stop or postpone my monthly contributions? You can stop, re-start or change your monthly deductions at any time but the change will only be effective once the details have been passed from Computershare to payroll You cannot make up for missed monthly deductions at a later date To make changes you should log in to the Aviva Share Plans website Any change submitted by the fifth day of the month will be applied to the deduction in the same month. If you have any problems, you can call the Aviva Share Plans helpline on *0371 495 0105 for further assistance Can I change my dividend election after I ve joined? You may change your dividend election at any time to either receive dividends as cash or have additional shares awarded into your plan via Dividend Reinvestment. On-line changes to dividend mandates made before or on a record date will be effective for the forthcoming dividend. Changes made after a record date will be effective for all subsequent dividends. To change your election you should log in to the Aviva Share Plans website and navigate to the Holding Information tab under My Holdings. Dividend Shares must be held in trust for three years before they can be sold or transferred free from income tax and NIC. To view more frequently asked questions about the Plan, simply log into the Aviva Share Plans site and click on the Company Info tab. You will find lots of useful information about how to keep your details up to date, leaver information and much more. * Lines are open from 8:30am to 5:30pm, Monday to Friday (excluding bank holidays). Calls cost the same as calling a 01 or 02 number. If you have a free minutes call package, check with your provider that 03 numbers are included.
Aviva Matching Share Plan (MSP) vs. Save As You Earn (SAYE) Aviva employees can choose to invest in the MSP, SAYE or both plans. But what are the main features and differences between the plans? Matching Share Plan (MSP) Save As You Earn (SAYE) Flexibility You can start, stop or change the monthly amount you invest at any time The amount you save is fixed. Annual invitation window to join Contributions Invest between 5 and 150 per month Invest between 5 and 500 per month What you buy Partnership Shares at the market price each month Option Price fixed at the start @ 20% discount at the time of invitation. You can choose to purchase shares at the Option Price at the end of the saving period Your pay Contributions deducted via payroll from pre-tax (gross) pay Contributions deducted via payroll from post-tax (net) pay Shareholder rights Leaving* Tax Holding period Become a shareholder right away and receive dividends on your shares If you leave within 3 years, your shares held in the plan will be released to you, subject to Income Tax and NIC If you keep your Partnership Shares and Matching Shares for five years (or three years for Dividend Shares), any sale is free of Income Tax and NIC. There is no CGT payable when you withdraw shares from the Plan - your CGT base price is the price when the shares are withdrawn. You must keep your Partnership Shares for 3 years in order to keep your Matching & Dividend shares You might not become a shareholder. After 3 years you have the choice to buy shares or take your cash savings If you leave within 3 years, you get your savings back If you choose to exercise your options and buy shares, there is potential Income Tax on any future dividends and potential capital gains tax (CGT) on any future sale of your shares If you choose to exercise your options and buy shares, you can sell them at any time * Leaving due to redundancy or retirement (or any other reason stated within the Plan rules), mean that different options will be made available to you. Please see the FAQs on the Aviva Share Plans site for full details.
Saving for your future MoneyWorks The MoneyWorks portal provides lots of helpful information and articles as well as useful links and downloads to help you make informed decisions and actions in respect of the financial health of you and your loved ones. MoneyWorks is available whenever you need it and can be accessed from work, home or on the go. Visit the MoneyWorks site today at www.avivamoneyworks.com to learn how you can continue to manage your financial health. Glossary Aviva Aviva plc Aviva shares Aviva ordinary shares Capital Gains Tax (CGT) the tax potentially payable on any profit or gain made by selling a capital asset (eg shares) for more than the purchase price Computershare Computershare Plan Managers (the administrators of the MSP and Aviva SAYE) and Computershare Trustees Limited (the appointed Trustee for the Matching Share Plan) Dividend Shares Shares which the Trustee awards by reinvesting Participants cash dividends from their Plan Shares Gross Pay cash pay before tax, NIC or any other deductions have been applied Matching Shares Shares awarded without payment by the participant, in proportion to any Partnership Shares allocated The ratio is currently two Matching Shares to one Partnership Share and capped at the first 40 contributed by the participant each month National Insurance Contributions (NIC) social security contributions payable by most working people to cover unemployment, sickness, maternity and old age pension benefits Partnership Shares Shares which the Trustee allocates to Participants in respect of their contributions Plan the Aviva Matching Share Plan, as part of the Aviva All Employee Share Ownership Plan (AESOP) Plan Shares the Shares awarded or allocated to Participants under the Plan, including Dividend Shares Share Purchase Date is the date Plan Shares are purchased by the Trustee Trustee Computershare Trustees Limited is the appointed Trustee for the Aviva Matching Share Plan
Important Notes This booklet summarises the Partnership Share, Matching Share and Dividend Share elements of the Aviva All Employee Share Ownership Plan (the AESOP). A copy of the Trust Deed and rules are available on the Aviva Share Plans website www.computershare.com/avivashareplans and reflects Aviva s understanding of the legislation in force as at 5 December 2016. Whilst every effort has been made to ensure the accuracy of this booklet, if there is any conflict between the contents of this booklet and the rules of the AESOP and the applicable legislation, the rules of the AESOP and the applicable legislation take precedence. Please also note that the comments in this booklet relating to the tax consequences of participating in the Plan are general in nature and not intended to constitute tax advice, and relate only to individuals who are UK resident at all times between the award of Plan Shares and those shares being withdrawn from the Plan. Aviva and the Trustee cannot accept responsibility for changes to the current legislation or treatment, or for the effects of future legislation. Tax liability depends on individual circumstances. The Plan requires employees to invest in Aviva Shares and the value of those shares and therefore each participant s holding in the Plan will fluctuate in line with the Aviva share price. The value of the employee s investment can be less than the amount originally invested. Please seek independent financial advice if you are unsure whether the Plan has any tax consequences or whether it is appropriate for you to participate in any elements of the Plan. Aviva plc, Registered Office St Helen s, 1 Undershaft, London EC3P 3DQ +44 (0)20 7283 2000 www.aviva.com Registered in England Number 2468686 12BBGF D01