GROUP MONEY PURCHASE SCHEME MEMBER BOOKLET PUTTING THE PERSONAL TOUCH INTO CORPORATE PENSIONS

GROUP MONEY PURCHASE SCHEME MEMBER BOOKLET PUTTING THE PERSONAL TOUCH INTO CORPORATE PENSIONS

ABOUT SCOTTISH WIDOWS Scottish Widows has been looking after the financial well-being of people from all walks of life for over 200 years, and our aim is to help you prepare your finances for the years to come. We believe in doing this by giving you financial facts and information in a clear, straightforward manner. By joining a Group Money Purchase Pension Scheme with us you can rest assured that you ll be in the safe hands of a group which is prepared to give you the highest standards of service. 1

PLANNING FOR A SECURE RETIREMENT Your employer has chosen a Scottish Widows Group Money Purchase Pension Scheme to provide you with retirement benefits. The scheme is constituted under a trust administered by trustees, closely assisted by Scottish Widows, according to rules which govern your legal position. The trustees are required to make arrangements so that one-third of the trustees are member nominated. Your employer or the trustees can provide details on this. The trustees must ensure that payments from you and your employer are applied as payments under insurance policies under the scheme. The trustees must use the funds accrued for you under the scheme to purchase benefits in accordance with the scheme rules. ELIGIBILITY Invitation to join the Scheme is entirely at the discretion of your employer, although remember that, if invited, you don t have to join. PAYMENTS 1. Your policy The Scheme is a money purchase type of arrangement. This means that the value of your benefits will depend mainly on the following: total payments paid to your pension fund, the investment return on your pension fund, the term your pension fund is invested for, charges, the rates for converting your pension fund into an income if you choose this option at retirement and tax rules. 2. Types of payments The following types of payments can be made to the Scheme: Regular monthly payments (these can either be a fixed amount in s, or a percentage of salary, or variable payments), Single payments, Transfer values (see below), You may also make additional voluntary contributions (AVCs) to secure extra benefits. Transfers If you have a fund built up in a previous employer s scheme, it may be possible for the value of that fund to be transferred to this scheme. However, advice should be sought as the benefits on transfer could be less than those available from the transferring scheme and you could be giving up guaranteed and protected benefits. Please seek financial advice for further information. 3. Who pays? Payments into the Scheme will be made by your employer and you may be required to contribute also. If you make payments, your payments will be at the rate agreed between you and your employer. The trustees will tell you what payments will be made by you and your employer and how they will be calculated. Your payments will be deducted from your salary by your employer who will then forward all payments directly to Scottish Widows. 2

4. Investment The investment choices for the scheme are normally made by the trustees. However they may take your wishes into account in arriving at their decisions. Our Pension Investment Approaches, offer a different combination of risk and reward depending on how you currently intend to take your benefits and the way you want your money to be invested. More details are available in our Pension Investment Approaches Guide and our Premier Lifestyling Options Guide. If the trustees don t choose from the Pension Investment Approaches, we also offer a broad range of investment funds to choose from. The Investment Approaches have varying aims and investment risks and the investment funds we offer carry different aims and types of risk. You may be able to invest in the with-profits fund depending on how your scheme was set up. Your employer or the trustees can provide further details. More details are available in our Pensions Funds Investor s Guide, Premier Lifestyling Options Guide and Your guide to with-profits. Pensions are a long term investment. The retirement benefits you receive from your pension plan will depend on a number of factors including the value of your plan when you decide to take your benefits which isn t guaranteed, and can go down as well as up. The value of your plan could fall below the amount(s) paid in. GENERAL 1. Payments Payments will be applied under an individual policy to purchase units in one or more investment funds. When you take your benefits, the value of these units will be used to purchase retirement benefits for you. 3. Taxation Tax relief Payments to the scheme will be deducted from your salary before tax, which means that tax relief will be given at your highest marginal rate. If you are a Scottish taxpayer, the tax relief you will be entitled to will be at the Scottish rate of income tax, which may be different from the rest of the UK in the future. Please see our Key Features document for more information. The funds your policy will be invested in are unable to reclaim tax deducted at source from the dividends of UK company shares. Other investment income and all capital gains are currently free from UK tax. All pensions paid from the scheme will be taxed as earned income under the PAYE system. At retirement, one of the options you have is to take up to 25% of the fund value as tax free cash, and a smaller taxable pension. Tax charges may apply if the Government s Annual Allowance, Tapered Annual Allowance, Money Purchase Annual Allowance or Lifetime Allowance is exceeded. Please see www.gov.uk/tax-on-your-private-pension for more information on these. The tax advantages of joining the scheme will depend on your personal circumstances. Both your circumstances and tax rules may change in the future. 4. Charges For details of the types of charges that may be applied to your plan please see our Key Features document and Your guide to with-profits for more information. 2. Regular Updates Each year we ll send a statement to the trustees which they ll send on to you to keep you up to date with how your pension fund is doing. You should regularly review your plan to check if it remains on track for your needs. 3

HOW CAN I TAKE MY BENEFITS? 1. When can I take my benefits? If the trustees agree, you can normally start taking all or part of your benefits at any time between ages 55 and 75. You may defer taking your benefits but they must be taken by age 75. You can start taking your benefits earlier than 55 only if you re in ill health. 2. What benefits can I receive? Subject to the trustees agreement, you will have access to the fund built up under your pension scheme using one or more of the following options: take up to 25% tax free, convert some or all of the rest into a regular retirement income (known as an annuity) subject to tax and/or withdraw the remaining cash in stages or as one lump sum, subject to tax at your highest rate. Beneficiary s pension You can choose a pension which will continue to be paid to a chosen beneficiary after you die, although this will reduce the level of pension you can receive. Increasing pensions You can choose a pension which increases in payment. This will reduce the initial level of pension you can receive. Minimum period You can ask for a pension to be paid for a minimum period. If you die during the minimum period, the pension will continue to be paid to the end of that period. By taking a pension for a minimum period, it will result in a lower pension being available. BENEFITS ON DEATH 1. Death in service before taking your pension If you die in your employer s service before you take your benefits, we will pay an amount equal to the value of your plan to the scheme trustees. The trustees will use this value to provide a lump sum and/or pension to your dependant(s). Separately, there may be a specific sum assured which will be paid if you die while you are employed and are an active member of the scheme. An indication of the value on death will be shown in the statement of benefit. If your policy schedule shows additional life cover, the sum assured will be paid in addition to the value of the plan. If it shows integrated life cover, the amount paid on your death will be the greater of the insured life cover amount and the value of your plan. Generally, the cost of life cover increases as you get older. This means that if you have integrated life cover, the contributions paid towards your pension may decrease in proportion to the contributions paid towards your life cover. You may advise the trustees at any time whom you would like to receive death benefits from your plan, although they are not bound to follow your wishes. A nomination form is included within your application form. You may change your nomination(s) at any time. Lump sum death benefits in excess of the Lifetime Allowance will be subject to a tax charge. There s normally no such charge if the excess is used to provide dependants pensions, although these are taxable as earned income. Please see our Key Features for more information. 2. Death after retirement Any spouse s or dependant s pension purchased when your pension started will be paid to the surviving spouse or dependant. No further instalments of your pension will normally be paid, unless you have chosen a minimum period and you die during that period. In such circumstances, your pension will continue to be paid until the end of the minimum period. The word spouse means a husband, wife or registered civil partner. 4

LEAVING THE SCHEME If you leave the scheme, all payments to the policy will normally stop and any life cover will be cancelled. Your options will depend on the length of time that you have been a member of the scheme and these are described below: Less than three months membership: you will be entitled to a refund of your own payments, less a tax charge*, or you will be entitled to a deferred benefit under the scheme, subject to trustee agreement. More than three months but less than two years membership: you will be entitled to transfer the value of your fund to another registered pension scheme, or alternatively, you may receive a refund of your own payments, less a tax charge*, or you will be entitled to a deferred benefit under the scheme subject to trustee agreement. *You will only get a refund up to 30 days after joining. After 30 days you can keep the deferred benefit or transfer. More than two years membership: you will be entitled to a deferred benefit under the scheme, or alternatively, you may choose to transfer the value of your fund to another registered pension scheme. AMENDMENT OR TERMINATION OF THE SCHEME The trustees of the scheme have the right to alter or modify the rules of the scheme at any time, but no such alteration itself should adversely affect the value of the fund already secured for you. In the event of any amendment, you will be notified in writing of the circumstances and the effect on your fund or benefits in payment. If the scheme is terminated (wound up) you ll normally have the option to transfer to another registered pension scheme. Otherwise your benefits will be transferred to an individual arrangement by the trustees. SCHEME INFORMATION Each year the trustees and your employer must agree a schedule of contributions payable for at least the next 12 months. The trustees are required to obtain a yearly statement from the scheme auditor confirming that the payments shown in the schedule have been paid. Scottish Widows will provide the necessary information. If you require any further information about the scheme or your benefits, or if you would like to see a copy of the rules and auditor s statement, you should contact the trustees. IMPORTANT NOTES Charges, limits and terms which apply may change. This brochure contains a summary of the main benefits available from the Group Money Purchase Pension Scheme. Full terms and conditions are available on request from Scottish Widows. COMPLAINTS If you have general queries regarding the scheme these should in the first instance be raised with the scheme administrator. If you are unhappy with any aspect of the scheme you may approach the person nominated by the trustees to consider problems. This person should reply to your complaint within two months. If you are still unhappy you may appeal to the trustees. The trustees will give their decision within two months. The Pensions Advisory Service (TPAS) is available at any time to assist members and beneficiaries of the scheme with any pensions queries they may have or with any difficulties they have been unable to resolve with the scheme administrator or trustees. The address at which TPAS may be contacted is: The Pensions Advisory Service, 11 Belgrave Road London SW1V 1RB Telephone 0300 123 1047 If TPAS is unable to deal with your complaint, you can refer your case to the Pensions Ombudsman. You can contact the Pensions Ombudsman at: Pensions Ombudsman, 11 Belgrave Road, London SW1V 1RB Telephone (020) 7630 2200 For details of the Financial Ombudsman Service, please refer to the Key Features document for your plan. 5

Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655. 15685 06/16