The Samworth Brothers Retirement Savings Plan Member Booklet
Contents 1. The Samworth Brothers Retirement Savings Plan 3 2. Why do I need retirement savings? 4 3. The Samworth Brothers Retirement Savings Plan how does it work? 6 4. Who can join the Samworth Brothers Retirement Savings Plan? 5. How the Plan works 8 9 6. What happens when I retire? 15 7. What happens if...? 18 8. Need more information? 22 9. Understanding pensions language 23 10. Samworth Brothers Retirement Savings Plan in more detail 2 26
1. The Samworth Brothers Retirement Savings Plan Understanding your options This booklet describes the main features of the Samworth Brothers Retirement Savings Plan ( the Plan or the Retirement Savings Plan ). It is designed to help you understand how the Plan works, the benefits you get from being a Member and the decisions you will need to make when you join. The Plan is sponsored by Samworth Brothers Limited to help you save for retirement. The Plan provides you with defined contribution retirement benefits, which means that the contributions you and the Company make are held as assets of the Plan and are invested on your behalf. These contributions, adjusted in line with investment return, will build up into a retirement savings pot which will be used to provide you with benefits when you retire. The assets of the Plan are held within a Trust and are managed by the Trustee of the Retirement Savings Plan whose responsibilities include ensuring that the Plan is well run in the interests of Members. The Trustee holds the assets separately to those of the Company and the Plan is currently administered by Legal & General. There is some key information you ll need to know about your Plan that is outlined in this booklet. Throughout this booklet some words are written in orange these are explained in more detail in the Understanding pensions language section starting on page 23. We hope you will find this booklet informative and easy to read but if you have any questions, please contact your Personnel Team. 3
2. Why do I need retirement savings? Everybody wants to have a happy retirement. The Retirement Savings Plan is a long-term savings plan and although you may not see the benefits immediately, you ll be grateful that you have savings to rely on at retirement. 4
You re never too young or old to start saving for your retirement. By starting as early as you can you ll spread the cost over a longer period and you will probably build up a larger retirement savings pot than if you d started later. However there are also benefits to building up a retirement savings pot even if you are just a few years away from retirement. There are a number of benefits to joining the Retirement Savings Plan: Company contributions. You can benefit from company contributions from Samworth Brothers. This lets you save more and achieve a better income at retirement. I t can save you time. Your contribution will be deducted from your pay and paid into the Plan and the Trustee will invest the money, meaning you don t have to arrange anything yourself. T ax free saving. To make saving for retirement more appealing, most people won t pay any tax on their contributions or the Company contributions. It s out of temptation s way. The money in your retirement savings pot is tied up at least until you reach the normal minimum pension age, so you re not tempted to dip in here and there. A lump sum benefit will be paid out to your beneficiaries on your death. The State Pension If you have been in work and paying National Insurance contributions you will also be entitled to a State Pension. You will be able to get a forecast of your State Pension by visiting gov.uk/state-pension-statement. 5
3. The Samworth Brothers Retirement Savings Plan how does it work? Samworth Brothers is committed to helping you save for retirement. Lots of people think pensions are complicated and boring. But if you understand the basics, then planning for your future and saving for your retirement isn t as difficult as you may think. 6
These four points explain simply how the Plan works: The Plan is a Defined Contribution (DC) or money purchase arrangement, which means that you and the Company pay contributions (money) into your Plan while you are employed. While you are still working, the money in your retirement savings pot is invested by the Trustee in different investment funds. The value of these funds goes up and down depending on investment performance. When you get to retirement, the value of your retirement savings pot (including contributions from you and the Company, as adjusted depending on the performance of those investment funds) can be used to fund your retirement in a number of ways. You can choose how much you pay into the Samworth Brothers Retirement Savings Plan, starting at a minimum of 5% of your pensionable pay (see further below). The Company will match your contribution up to a maximum of 7% of your pensionable pay, but you can pay more than 7% if you wish. The Plan also provides a death in service lump sum that is equivalent to four times your life cover pay. If you remain a member of the Plan and die during the time you are employed by Samworth Brothers this money will be distributed to your beneficiaries. The Trustee will use its discretion as to who to pay the benefits to but they will take your wishes into account. To help guide the Trustee as to who you would like to receive these benefits, you need to complete an Expression of Wishes Form. You should complete a new form as and when your personal circumstances change. 7
4. Who can join the Samworth Brothers Retirement Savings Plan? You will be invited to join if you are a new member of staff. Your Personnel Team will provide further details. Weekly paid staff are eligible to join the Plan with effect from the first Sunday after they have completed 8 weeks employment. Monthly paid staff are eligible to join the Plan with effect from the first day of the month after they have completed one month of employment. If you decide not join the Plan as above, you may be eligible to join the Plan at a later date. Details will be available from your Personnel Team. If you want to join the Plan You will need to complete an application form that is available from your Personnel Team and give the completed form to your Personnel Team before the date specified above (depending on whether you are weekly paid or monthly paid). You will also need to complete an Expression of Wishes Form. 8
5. How the Plan works How much do I have to contribute? Contributions to the Plan are calculated as a percentage of your pensionable pay. You can choose how much you contribute and you can change your contributions (when you wish). If you change your contributions, the company contributions will change accordingly. You contribute + Samworth Brothers contribution = Total contribution into the Retirement Savings Plan is 5% 5% 10% 6% 6% 12% 7% 7% 14% 9
As mentioned before, the majority of people don t pay any tax on the contributions either, which reduces how much it actually costs you. This means that if you are a basic rate tax payer every 1 you pay only costs you 80p. In addition the Company uses SMART (salary sacrifice) which is currently a tax efficient way to make contributions into the Plan. With SMART you give up part of your pay (your sacrifice). The Company then pays an amount equal to your sacrifice into the Plan as an additional Company contribution along with the standard Company contribution. By doing this both you and the Company save on National Insurance contributions. (There is a separate SMART booklet available for further information.) Can I save more? You do have the option to pay extra contributions into your retirement savings pot through voluntary top-ups, although the Company doesn t match any voluntary top-up contributions made by members. So, for example: You contribute + (7% plus 1% top-up) Samworth Brothers contribution = Total contribution into your Retirement Savings Plan is 8% 7% 15% Voluntary top-up contributions are not paid through SMART. Contributions in excess of the Annual Allowance (currently 40,000 a year in normal circumstances) are likely to have adverse tax consequences. 10
Where are my contributions invested? Each month the contributions, from you and the Company, are paid to the Trustee who then invests this in the fund or funds chosen by you from a range of options chosen from time-to-time by the Trustee (although you will not have to choose if you don t want to see next page). The value of your retirement savings pot depends on how well your investments perform over time. 11
If you do not make a choice, the Trustee will automatically invest your retirement savings pot in the Samworth Brothers Lifestyle Programme (also known as the default lifestyle programme). However some people like to choose where they want their retirement savings pot invested so we are also offering a choice of other funds. The different funds available offer different levels of potential rewards for different levels of risk. You can find out more by visiting www.legalandgeneral.com/ samworthbrothers or by reading Your Investment Options guide which is also available on the website. Here you ll find information about the various investment choices currently available. You may want to think about these questions to help you understand how you feel about investment risk: How long have I got to go before I plan to retire? How willing am I to keep track of my investments and make changes over time? Would I prefer to invest in a fund that automatically moves from higher to lower risk funds in the run up to my retirement? Who can advise me about how to invest? The Trustee of the Retirement Savings Plan is not allowed to give you investment advice. However, a Financial Adviser can help you with your decisions. You can find an adviser in your local area at www.unbiased.co.uk. Please note that advisers will normally charge for their services. 12
How do I keep track of my retirement savings pot? You ll receive an annual statement showing you the value of your retirement savings pot. You can also get an up to date valuation of your retirement savings pot at any time by logging onto the Manage Your Account section of www.legalandgeneral.com/ samworthbrothers. Alternatively you can also call the Samworth Brothers Retirement Savings Plan helpline on 0345 0708686. 13
Do I pay any charges? Plan funds are currently invested with funds in Legal & General. For administering and investing your retirement savings pot, Legal & General deduct two types of charge: Administration charge An annual administration charge of 0.37%. This is deducted monthly by selling units from the funds, which will reduce the value of your retirement savings pot. Investment charge The annual investment charge for the Samworth Brothers default Lifestyle Option is between 0.13% and 0.22%. The investment charge is not guaranteed and could change if costs of managing a particular fund should rise or fall. We will let you know if there are any such changes. If you choose to invest in another fund the charges may differ although they are typically less than 1%. The Your Investment Options guide has further information for you. 14
6. What happens when I retire? When you reach retirement date you will have a number of options. Under new rules, effective from 6 April 2015, you have more choice and flexibility on what to do with your retirement savings pot if you re at the normal minimum pension age and have a defined contribution plan. You can take up to 25% of your retirement savings pot tax free (up to a maximum of 25% of the Lifetime Allowance). As a Retirement Savings Plan member you will have a number of options. You can choose to buy a pension (an annuity), take all of your retirement savings pot in one go, or leave it invested. Legal & General, the current Plan provider, also offer a range of flexible pension investment options. How you access your retirement savings is an important decision to make and you must consider all of your options carefully. We strongly recommend you seek independent financial advice to help you with this decision. You also need to understand what tax you may have to pay on larger lump sums. The Trustee will send you a statement shortly before your planned retirement date that will include information about the different options. When can I retire? The Plan s normal retirement age is the State Pension Age although you can access your retirement savings from the normal minimum pension age although you will need company consent if you are in service. 15
How will I know how much I will have at retirement? The Trustee will send you a statement every year to tell you how much money is in your retirement savings pot and provide an illustration of what your retirement savings pot might be at retirement. The value of your retirement savings pot will depend on the money you and the Company pay into your plan, and the investment performance. If you want to check the value of your retirement savings pot more regularly then you can log on to the Retirement Savings Plan website (www.legalandgeneral.com/samworthbrothers). You will have been sent a user name and password when you joined the Plan, but if you can t remember this then contact the helpline and they will send you details of how to log on. 16
What happens to my retirement savings pot when I die? If you have funds in your retirement savings pot these will be distributed to your beneficiaries. The Trustee will use its discretion as to who to pay the benefits to but they will take your wishes into account. To help guide the Trustee as to who you would like to receive these benefits, you need to complete an Expression of Wishes Form. You should complete a new form as and when your personal circumstances change. (See page 19 for information on what happens if you die while still employed by Samworth Brothers and contributing to the Plan). 17
7. What happens if...? I stop working for Samworth Brothers? If you leave the Company you have two options: 1. Your contributions will continue to be invested until you take your benefits. It is important to keep the Trustee up-to-date of your contact details if you take this option. 2. You may be able to transfer the value of your account to another pension plan. Legal & General will write to you regarding your options. If you do not transfer, the Trustee may decide to secure your benefits outside of the Plan. You will be informed if this happens. 18
I can t afford to keep up contributions? If your contribution is at a higher level, you can reduce your level of contribution to 5%. If you cannot afford this level of contribution you can stop contributing to the Plan and join the NEST auto enrolment scheme and pay a lower level of contribution. You should talk to your Personnel Team about your options. I have to stop working because I am ill? If you re absent from work due to sickness or another authorised leave your membership of the Plan will continue. Most importantly, your life cover will continue. Contributions (from you and Samworth Brothers) will only be paid while you re being paid and will be based on your actual pay. During unpaid periods, no contributions will be added to your fund. As a result, you might want to consider increasing your future contributions to make up for missed payments. I die while I am employed by Samworth Brothers? A death benefit is payable equal to: A lump sum of four times your life cover pay, provided you re still employed by Samworth Brothers and contributing to the Plan; plus Funds in your retirement savings pot. The Trustee will use its discretion as to who to pay the benefits to but it will take your wishes into account. To help guide the Trustee as to who you would like to receive these benefits, you need to complete a Expression of Wishes Form. You should complete a new form as and when your personal circumstances change. 19
What happens if...? I get divorced? There are three ways that retirement savings can be dealt with: The value of your retirement savings pot can be offset against other financial assets, like the marital home. Part of your retirement savings pot can be earmarked through a court order for your ex-spouse or civil partner to receive when you retire. Your retirement savings pot can be subject to a pension sharing order, where a proportion of your retirement savings pot is given to your ex-spouse or civil partner. 20
I go on maternity, paternity or adoption leave? If you re on paid maternity, paternity or adoption leave, your membership will continue unless you choose to leave the Plan. During your paid leave, contributions from the Company will continue to be paid at the same percentage rate on your previous average pay. (That is average pay prior to your leave period). You ll contribute at the same percentage rate that applied immediately before your leave started but based on actual pay you receive during your leave, including statutory pay. I have an existing pension plan that I want to transfer into the Samworth Brothers Retirement Savings Plan? If you have retirement savings in another arrangement then you may be able to transfer them into the Retirement Savings Plan. You should contact your Personnel Team for more information if you are interested in doing this. 21
8. Need more information? This booklet is only a summary of the benefits within the Plan. There is more information on our website at www.legalandgeneral.com/samworthbrothers Or via the Retirement Savings Plan Telephone Helpline on 0345 0708686 Or talk to your Personnel Team. Other impartial information sources that you might find helpful are: www.pensionwise.gov.uk A free and impartial government service about defined contribution options www.moneyadviceservice.org.uk A free and impartial money advice service, set up by the government, to help you manage your money Both of these websites are easy to read and have lots of useful information on retirement planning. 22
9. Understanding pensions language Explaining some of the words and phrases that crop up in pension information. Annual Allowance This is the limit set by HMRC that you can pay into a pension arrangement whilst attracting tax relief. In 2015/2016 the limit is generally 40,000. Contributions These are the payments that are made into The Samworth Brothers Retirement Savings Plan by both you and the Company. Default lifestyle programme Samworth Brothers Default Lifestyle Programme is the investment programme that members will be automatically enrolled into if they do not choose their own investment option. We call this the default programme. You can find out more by visiting www.legalandgeneral.com/ samworthbrothers or by reading Your Investment Options guide which is also available on the website. HMRC Her Majesty s Revenue and Customs sometimes known as the Inland Revenue. Investment fund When contributions are made into the Plan, the contributions are invested in one or more funds of your choice. The aim of any investment fund is to help preserve or increase the value of your money (although there is no guarantee that this will happen). For more information about the investment funds available, please see the Your Investment Options guide. 23
Life cover pay The greater of gross pay for 12 months prior to death or basic rate of earnings at date of death. Lifetime Allowance This is a ceiling on the total amount of tax privileged pension savings that you can build up in your retirement savings pot. For most people their Lifetime Allowance will be the Standard Lifetime Allowance. In 2015/2016, the Standard Lifetime Allowance is 1.25 million but this is reducing to 1 million from April 2016. Normal minimum pension age The normal minimum pension age is 55 years old and is the minimum age when you are able to take retirement benefits. It will change to 57 years old in 2028. Pension annuity An insurance policy that uses the value of your pension pot to provide you with an income for the rest of your life. The amount you receive will depend on a number of things including the value of your pension pot, your age, your health and the annuity rates available when you purchase one. 24
Pensionable pay Your pensionable pay is made up of the parts of your earnings on which you and the Company pay contributions. Some elements of your pay, such as profit related pay and any car allowance or refunds from the final salary scheme, are not included in your pensionable pay. Retirement savings pot The value of the contributions from you and the Company, and any investment growth. Tax relief Some of your money that would have gone to the Government as tax goes into your pension instead. Trustee The Trustee is responsible for the management and administration of the Plan in accordance with the formal governing documents and relevant UK legislation and regulation. It is also responsible for the safekeeping of the money and investments belonging to the Plan. Units All funds are divided into units. When you make contributions to your retirement savings pot these are used to buy new units in your chosen fund or funds. The price of these units rises and falls in line with the underlying investments, and when you wish to take your benefits your units in your chosen fund(s) will be sold at the price at that time. Voluntary top-ups Extra contributions that you can pay if you wish into your pension plan. Sometimes they are know as Additional Voluntary Contributions or AVCs. Although the Company doesn t match members top-up contributions, they are still a good way to save as you usually don t pay any tax on the contributions. 25
10. Samworth Brothers Retirement Savings Plan in more detail Legal information about the Plan This booklet provides a summary of the Plan. The Trustee must abide by the Trust Deed and Rules of the Plan, which are the legal documents that govern its operation and members rights. If there is any conflict or difference between what is said in this booklet and the Trust Deed and Rules, then the Trust Deed and Rules will prevail. You can see a copy if you write to the Pensions Department, Samworth Brothers, Chetwode House, 1 Samworth Way, Leicester Road, Melton Mowbray, Leicestershire LE13 1GA. Tax registration The Plan is a registered with Her Majesty s Revenue & Customs ( HMRC ) under the Finance Act 2004. As a result of this: ou receive full tax relief on your contributions up to the Annual Y Allowance; T he Plan s investments are largely free from income and capital gains tax; and C ash sums up to 25% of your retirement savings pot are tax free, as long as that sum is not more than 25% of your available Lifetime Allowance. Changing or closing the Plan The Company is legally entitled to change, close or wind up the Plan at any time in the future (in accordance with the Trust Deed and Rules). If the Plan was wound up, your retirement savings pot would be held elsewhere. The Trustee can also change the investment options available or the provider under the Plan. 26
Internal Dispute Resolution Procedure The Trustee operates an internal dispute resolution procedure to deal with any complaint or disagreement you may have. For more information contact your Personnel Team or go to www.legalandgeneral.com/samworthbrothers. Data Protection Act 1998 In order to comply with legislation, the Trustee has notified the Data Protection Commissioner under the Data Protection Act 1998 that it processes personal data for the purposes connected with its trusteeship of the Plan. The Pensions Regulator The Pensions Regulator is a supervisory body for work-based pension schemes. It has power to intervene in the running of pension schemes where trustees, employees or professional advisers have failed in their duties. The Pensions Regulator can be contacted by writing to Napier House, Trafalgar Place, Brighton BN1 4DW or by visiting www.thepensionsregulator.gov.uk. The Pensions Advisory Service The Pensions Advisory Service (TPAS) is available to assist members and beneficiaries of pension schemes in connection with any pension queries they may have, any difficulties they may have encountered at any time and which they may have failed to resolve with the trustees or administrators. TPAS can be contacted by writing to 11 Belgrave Road, London SW1V 1RB, calling 0845 601 2923 or by visiting www.pensionsadvisoryservice.org.uk. The Pensions Ombudsman The Pensions Ombudsman is available to investigate and determine any complaint or dispute of fact or law in relation to a pension scheme from an individual or between an individual and the pension scheme s trustees. Pension scheme members and beneficiaries may call upon the services of the Pensions Ombudsman. The Pensions Ombudsman can be contacted by writing to 11 Belgrave Road, London SW1V 1RB, calling 020 7630 2200 or by visiting www.pensions-ombudsman.org.uk. 27