Key Features of the Group Stakeholder Pension Plan Its aims To help you save for your retirement by building up a sum of money in a tax-efficient way that will provide you with an income when you retire. To enable you to take a tax-free lump sum on retirement in return for a smaller regular pension. Your commitment To make regular payments, or at least one single payment. The minimum premium you can make is 20 (gross). Payments may come from you, your employer, or a combination of your personal and employer contributions. To let your fund build until you choose to start taking your pension, and then use it to provide your pension by age 75. You will normally have to wait until you are 50 before you can take your pension and any lump sum. After 5 April 2010, the minimum retirement age will be 55. To continually review your contributions to ensure that they meet your retirement needs. To notify us at retirement of all your pension arrangements. To tell us if you stop being resident or ordinarily resident in the UK. Risk factors What you get back at your chosen retirement date is not guaranteed. If your retirement fund from all your pension arrangements exceeds the Lifetime Allowance (see Questions and Answers) you will be subject to a tax charge on the excess. When you retire, your pension and any lump sum may be lower than expected. This could happen for a number of reasons. For example, if: you or your employer stops paying into your plan or if you take a payment break investment returns are less than expected annuity rates when you retire are lower than expected you start taking your pension earlier than your chosen retirement date, or tax rules change. Your plan may invest in a range of investments, including stocks and shares, which carry differing levels of risk. Depending on your personal circumstances, any pension benefits you receive from this contract may reduce your entitlement to some State Benefits. Saving for your pension is a long term investment and the minimum age you can benefit from your plan is 50 (55 after 5 April 2010).
Questions and Answers About your Plan What is a Group Stakeholder Pension Plan? How flexible is the plan? It is an investment plan that will help you to save for your retirement in a tax-efficient and cost effective way. Contributions can be saved regularly and lump sums can be added whenever you wish. The Government has set minimum standards covering payment levels, costs, and terms and conditions that companies must apply to Group Stakeholder Pensions. Our Group Stakeholder Pension Plan complies with all of these standards. The Stakeholder Pension decision trees and explanatory notes enclosed with these Key Features will give you more information on how Stakeholder Pensions work and whether they are right for your personal circumstances. Your Group Stakeholder Plan is designed to be flexible. You can: make regular or one off payments at anytime subject to 20 gross minimum contribution change your regular payment you can take a payment break and stop paying and restart at a later date, subject to your employer s agreement if you stop contributing permanently, the fund you have built up at the date payments stop will remain invested until you take benefits or decide to transfer your benefits to another approved pension arrangement. Tax Relief What about tax? What is the Annual Allowance? What is the Lifetime Allowance? You will benefit from tax relief on the contributions you pay into your Group Stakeholder Pension. Using current tax rates, this means that for every 100 you invest, your plan will be credited with 128. If you are a higher rate taxpayer, you can claim the extra relief through your self assessment tax return. Your contributions are invested in funds with special tax advantages. You are entitled to receive tax relief on all your pension contributions up to a maximum of 3,600 regardless of earnings, or 100% of your earnings each tax year, subject to the Annual Allowance. The Annual Allowance for the tax year 2006/07 has been set at 215,000 and is reviewed annually. If your total contributions to all pension arrangements, including those from your employer, exceed the Annual Allowance in any tax year, you will be subject to a charge of 40% on the excess amount. This charge will not apply in the tax year in which you take your retirement benefits. The Lifetime Allowance is the maximum pension fund an individual can build up from all of their approved pension schemes, in a tax-efficient way. This means that any capital growth in your fund is not subject to Capital Gains Tax. This is initially set at 1.5 million for the 2006/2007 tax year. The Government has set the Allowance for each year up until 2010 when the limit will be 1.8 million.
Any excess over the Lifetime Allowance will be subject to a tax charge before benefits are taken. Investing Contributions Where are payments invested? What are the charges? How much will the advice cost? What happens if I leave my current employer? We will invest 100% of each payment into your plan. You can choose to invest in one or more of nine funds currently available. Please see Your investment guide and the Group Stakeholder Pension Plan Funds Leaflet for more information on the funds available. If you do not choose a fund, we will invest your payments in the default fund(s) determined by the Lifestyle Profile until you tell us otherwise. If you invest in the Lifestyle Profile we will automatically switch units to more secure investments during the last 10 years before your scheduled retirement date. This is to ensure that your pension is not fully exposed to the effects of stockmarket fluctuations just before your retirement. You can switch your payments into and out of various funds to change the mix of investments at any time and without charge. Each fund is made up of units. We use your payments to buy units in the funds you choose. The price of one unit in each fund depends on the value of the investments. We will work out the value of your plan based on the total number of units you have in each fund. If the unit prices rise or fall, so will your plan value. Please note that past performance is no indication of future performance. There is currently an annual charge of up to 1% of the value of the funds you accumulate. If your fund is valued at 500 throughout the year, this means that we will deduct 5 that year. If your fund is valued at 7,500 throughout the year, we will deduct 75 that year. We may vary the charges in the future, subject to Government regulations. Based on a 40-year old contributing 100 gross each month until retirement at the age of 60, HSBC Bank plc, HSBC Investments (UK) Limited or HSBC Holdings plc (depending on who provides the service) would expect to receive 296.34 once the contract starts. This will cover the sales costs incurred in setting up this contract. This figure assumes that no RPI (Retail Price Index) increases are made (even if your policy accommodates such increases). The sales costs are paid for from the 1% annual charge and are calculated according to the size of your investment, and for regular premiums, the length of the contract. The Group Stakeholder Pension Plan is yours and you will be able to continue contributing to the plan direct from your bank
account. Any employer contributions will cease. If you decide to cease contributions also, your pension fund will remain invested with HSBC Life (UK) Limited until you take benefits or until you transfer your pension fund to another approved pension arrangement. Can I transfer my plan? How will I know how my plan is doing? You can transfer your plan to another approved pension arrangement at any time before you retire. We make no charge for this. We ll send annual statements to show how your pension plan is doing. You can also get up to date valuations online at www.hsbc.co.uk. Your welcome letter will give more details on how to do this. You need to regularly review your pension contributions, at least every two years, to ensure that they meet your retirement needs for the future. When you retire What will I get back when I retire? Contributions into your Group Stakeholder Pension are invested into your chosen funds until you decide to take your benefits. When you come to take your benefits: you can take up to 25% of your fund as a tax free cash lump sum the remainder of your pension fund must be used to purchase an annuity by age 75. An annuity provides an income for the remainder of your life and can be purchased at any age from 50 (55 from 6 April 2010) if you are age 60 or over and the value of all your pension arrangements is no more than 1% of the Lifetime Allowance ( 15,000 for 2006/07), your pension arrangements may be paid to you entirely as a lump sum, 25% of which is free of income tax. This option can only be used once you will need to let us know if the value of all your pension arrangements is greater than the Lifetime Allowance. If you die What happens to the plan if I die before I retire? Your fund will be paid as a lump sum on your death. You may nominate someone to receive this lump sum payment and normally we will pay the benefit in accordance with your wishes. If you have arranged your plan under trust, we will pay the lump sum to the trustees. If you do not inform us of your nominated beneficiary/beneficiaries, the lump sum payment may form part of your estate and a liability to Inheritance Tax may arise. If the value of all your pension arrangements exceeds the Lifetime Allowance at the date of death, any excess over the Lifetime Allowance will be subject to a tax charge.
Important Information How do I cancel the policy? How do I terminate my policy? How to contact us Customer service You have a right to cancel this policy. This will run for 30 days from receipt of your contractual information. If you wish to cancel your policy you should complete and return the Cancellation Form that accompanies your Policy Schedule before the expiry of this period. If you cancel the plan and the market has fallen, you may not get back all that you have invested. Where monies have been paid by payroll deduction, they will be returned to your employer for distribution to you. If you do not cancel your plan the monies will remain invested with HSBC Life (UK) Limited until your retirement date or until such date as you wish to transfer your funds to another approved pension arrangement. You may terminate your policy at any time by writing to us at the address below. Please note that you will not normally be able to draw any money from your pension fund until you are 50. After 5 April 2010, the minimum retirement age will be 55. If you have any questions, you can phone us or write to us. Call us on 0845 600 5432 (textphone 1800 108457 660391). Lines are open Monday to Friday (excluding Public Holidays) between 8am and 6pm. To ensure that we carry out your instructions accurately, to help us to continually improve our service and in the interests of security, we may monitor and/or record your telephone call with us. Write to us at: HSBC Life (UK) Limited Customer Services Centre PO Box 1011 Bristol BS99 1GD We want you to be entirely satisfied with the products and services you receive from us. If you are dissatisfied with any aspect of our service, please let us know. We always endeavour to resolve any concerns fairly and quickly. In most cases this can be done if you allow an HSBC representative to listen to your concerns, understand the problem and deliver an effective solution. However, should this not be the case our leaflet Listening to Your Comments may help you in presenting your concerns to us simply ask for a copy. HSBC Bank plc is a member of the Financial Ombudsman Service, further details of which are shown overleaf.
How to complain Terms and Conditions Law Compensation If you ever need to complain, firstly write to us at the above address. If you are not satisfied with our response, you can write to: Financial Ombudsman Service South Quay Plaza 183 March Wall London E14 9SR Telephone: 0845 080 1800 Email: enquiries@financial-ombudsman.org.uk Complaining to the Ombudsman won t affect your legal rights. This Key Features gives a summary of the Group Stakeholder Pension Plan. It does not include all the definitions, exclusions, terms and conditions. If you would like a copy of the full terms and conditions, please contact us. We have the right to change some of the terms and conditions. We will write and explain if this happens. We will also send you a copy of anything that has changed. The contract begins when you receive your policy schedule. This will occur after your pension plan has been set up by HSBC Life (UK) Limited. There is no minimum duration of the contract. Please note that past performance is no indication of future performance. This contract and any proceedings are governed by the laws of England and Wales. The contract and all communication during the course of the contract will be in English. We are covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the scheme if HSBC Life (UK) Limited becomes insolvent and we cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Most types of insurance business are covered for 100% of the first 2,000 and 90% of the balance. Further information about compensation arrangements is available from: Financial Services Compensation Scheme, 7th Floor, Lloyds Chambers, Portsoken Street, London E1 8BN.
HSBC Life (UK) Limited HSBC Life (UK) Limited is incorporated in England and is a company limited by shares. HSBC Life (UK) Limited is authorised and regulated by the Financial Services Authority (Registration number 133435) and is a member of the Association of British Insurers. Registered office: 8 Canada Square, London E14 5HQ. Registered in England (United Kingdom) number 88695.
Issued by HSBC Life (UK) Limited, a member of the HSBC Group, one of the world s largest banking and financial services organisations with around 9,500 offices in 76 countries and territories. HSBC Life (UK) Limited Customer Services Centre PO Box 1011 Bristol BS99 1GD www.hsbc.co.uk/pensions 97233-6 MCP27527 12/06 Printed by Charisma Colourprint, Sheffield. HSBC Life (UK) Limited 2006. All Rights Reserved.