Provident Financial Workplace Pension Scheme Frequently Asked Questions

Provident Financial Workplace Pension Scheme Frequently Asked Questions This document answers some of the questions you may have about the company s workplace pension scheme with NEST. 1. What is it all about? 2. Joining the Provident Financial Workplace Pension Scheme 3. What if I m not sure it s for me? 4. Already have a pension? 5. NEST the pension provider 6. Your NEST pension account 7. Taking money out 8. Ill health and death benefits 9. Moving Jobs 10. Can I join a better scheme? 11. More Information Note: The figures in this document apply to the 2013/14 tax year and will be reviewed every year by the government. If your question is not covered, visit www.gov.uk/workplace-pension C:\Users\patrick.sanderson\Desktop\temp\Workplace Pensions FAQ 240713 Final.doc

1. What is it all about? - 2 - Why is this happening? What is Auto-Enrolment? Why is automatic enrolment it being introduced? Is everyone being enrolled into a workplace pension scheme? Can other workers join and will the Company make a contribution to their pot? What is a qualifying workplace pension scheme? What if I don t meet the criteria to be enrolled? Who will pay into the pension? How much are the contributions? What is a Pension? What is a workplace pension? What is a Personal pension or private pension? Are pensions safe? What are the different types of pension scheme? I want to know more about company pensions. How is the money invested? I want to know more about workplace pensions. Can the value go down as well as up? I want to know more about workplace pensions. Could I lose my pension if Provident Financial plc goes bust?

- 3 - Why is this happening? The government s aim is to help more people have another income, on top of the State Pension, when they retire. The State Pension is a foundation for your retirement. If you want to have more, you need to save during your working life. Otherwise, you may reach retirement facing a significant fall in your standard of living. The full basic State Pension in 2013/2014 is 110.15 a week for a single person. The government is getting employers to enrol their workers automatically into a pension at work so it is easier for people to start saving. You can opt out if you want to, but if you stay in you will have your own pension which you get when you retire. What is Auto-Enrolment? The government has introduced a new law that requires all employers to automatically enrol certain workers. Due to a change in law the government requires all employees who are aged 22 or over, earn over 9,440 per year (2013-14) and are under State Pension age to be enrolled into a qualifying workplace pension scheme, if they are not already in one. The aim is to make it easier for workers to save for their retirement and for more people to have another income, on top of the State Pension, when they come to retire. Employers will also have a duty to automatically re-enrol workers into a qualifying pension scheme every three years. Why is automatic enrolment it being introduced? People in the UK today can expect to live longer than ever before. The number of retired people will rise by more than a third by 2050 but there will be relatively fewer working people. Many people plan to rely on the basic State Pension when they retire, which is 110.15 per week for the 2013/2014 tax year. It can give people a foundation for their income in retirement but might not be enough for the kind of retirement they want. The government has now made changes to encourage people to save more. The Pensions Act 2008 introduced new duties on employers to provide access to a workplace pension scheme for most workers. As part of this many workers will get new rights. Is everyone being enrolled into a workplace pension scheme? On 1 October 2013 Provident Financial plc has to enrol into a workplace pension scheme, workers who: are not already in a qualifying workplace pension scheme; are aged 22 or over; are under State Pension age; earn more than a minimum amount ( 9,440 a year in 2013-14); and work or usually work in the UK. Employers must make a minimum contribution to the retirement pot of any automatically enrolled jobholder.

- 4 - Can other workers join and will the Company make a contribution to their pot? A worker who works or normally works in the UK and is: aged below 22 or over State Pension age, earning more than 5,668 or aged at least 22 but under State Pension age, earning more than 5,668 but less than 9,440 can ask to be enrolled into the Provident Financial Workplace Pension Scheme, and the Company will make a minimum contribution to their retirement pot. A worker whose earnings are below 5,668 can ask to be enrolled, but the Company will not make a contribution until the earnings exceed 9,440. What is a qualifying workplace pension scheme? A It is a pension scheme that meets certain standards that are set by the government. The Provident Financial Workplace Pension Scheme, the PFG Retirement Plan and the Provident Financial Staff Pension Scheme are all qualifying workplace pension schemes. What if I don t meet the criteria to be enrolled? If you don t meet the criteria above when Provident Financial plc starts enrolling workers, you will not be automatically enrolled into the workplace pension scheme. However, you will be able to join the pension scheme if you want, if you re not already a member of another Provident Financial scheme, so long as you re 16 or over, and under 75. If you meet the criteria at a later date, for example you turn 22 or you start to earn more, and you are not already a member, then Provident Financial plc will automatically enrol you. Who will pay into the pension? You will pay into it. Provident Financial plc will pay into it too. We have to do this if you earn more than a certain amount ( 5,668.00 a year in 2013-14). Plus most people will get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as tax, goes into your pension instead. How much are the contributions? Minimum contributions are normally based on what is known as qualifying earnings. This is a band of gross annual earnings used to calculate minimum contributions. Under current legislation this is earnings between 5,668 and 41,450 for the tax year 2013/14. Qualifying earnings include salary, wages, overtime, bonuses and commission, as well as statutory sick, maternity, paternity or adoption pay. At first an amount equal to at least 2 per cent of a worker s qualifying earnings must be paid into their NEST retirement pot. A minimum 1 per cent of this will be paid by the employer, but you can pay more if you choose. The rest will come from the worker s own contribution and tax relief from the government. It s a good idea to save for retirement so it s worth putting aside more than the minimum if you can. The minimum contribution will increase gradually, rising to 8 per cent of qualifying earnings, of which the employer will pay at least 3 per cent. NEST has an annual contribution limit on how much can be paid into a retirement pot in one tax year. It includes a worker s own contributions, money from the employer

- 5 - and tax relief. It also includes any money paid in by others such as a partner or spouse. This limit is 4,500 for the 2013/2014 tax year but it will be reviewed each year and increased in line with earnings. What is a Pension? A pension is a way of saving money to provide you with an income when you retire. When people talk about their pension they can mean either the way they are saving for their retirement and/or the income they receive when they re retired. The terms pension scheme and pension pot are sometimes used to describe the way you save for your retirement. Other names you may come across are pension plan, pension policy and retirement pot. Income you receive when you retire is sometimes called retirement income. What is a workplace pension? The Provident Financial Workplace Pension Scheme is the scheme used by Provident Financial to comply with its duty to automatically enrol employees when required by legislation. It is administered by NEST. The term workplace pension is sometimes used to describe a company pension, an occupational pension or a works pension. What is a Personal pension or private pension? It s possible for people to set up a personal pension themselves directly with a pension provider. You arrange this yourself with the pension provider of your choice, and you pay into it. As this is not organised through your employer, they don t pay into it. Are pensions safe? No savings, including pensions, are ever entirely risk-free. However, the government has put an increasing number of controls in place designed to minimise the risks. This means your money is better protected than in the past. - The Pensions Regulator regulates workplace pensions www.thepensionsregulator.gov.uk - The Financial Conduct Authority (FCA) regulates the providers of personal pensions www.fca.org.uk There s no perfect answer for where to put your money for later life. Each type of saving and investment works differently and has its own pros and cons. But for most people it s better to do something, such as pay into a workplace pension scheme, than do nothing.

- 6 - What are the different types of pension scheme? There are two main types of pension scheme: 1) Defined Contribution schemes such as the PFG Retirement Plan or the NEST scheme. Your pension pot is put into various types of investments, such as shares (shares are a stake in a company). The amount you get at retirement is based on how much is paid in and how well the investments have performed. Normally, when you retire, you take some of your pension pot as a tax-free cash lump sum. You use the rest to buy yourself an income, on which you might pay tax. These are also known as money purchase schemes. 2) Defined Benefit schemes such as the Cash Balance section of the Provident Financial Staff Pension Scheme. The amount you get at retirement is based on various factors. These could include how long you have been a member of the pension scheme and your earnings. Examples include final salary or career average earnings related pension schemes. Normally when you retire you take some of your pension as a tax-free cash lump sum. The rest you get as a regular income, on which you might pay tax. The first of these types is more common. To find out which type you are in, check with the Pensions Department at Head Office pensionenquiries@providentfinancial.co.uk. I want to know more about company pensions. How is the money invested? With a Defined Contribution Pension Scheme such as the PFG Retirement Plan, the contributions you and your employer pay in, plus the contribution from the government in the form of tax relief*, go into your pension pot. Your pension pot is put into various types of investment, such as shares (shares are a stake in a company). It is expected to grow over time. Your pension pot is invested in this way because in the long run it usually gives a better return than a savings account. *Tax relief means some of your money that would have gone to the government as tax, now goes into your pension pot instead. With some workplace pension schemes, you may be able to make decisions about how your money is invested. But you don t have to all pension providers have to offer a fund that meets the needs of most people and this is where your money will be automatically invested. Whoever runs your pension scheme will have more information on this. The earlier you start putting money into your workplace pension, and the more you and your employer put in, the more money you re likely to have at the end. With a Defined Benefit Pension Scheme such as the Cash Balance section of the Provident Financial Staff Pension Scheme, the amount you get at retirement is based on various factors. These include your earnings and how long you have been a member of the pension scheme. How exactly it is worked out varies from scheme to scheme whoever runs your pension will have information on this.

- 7 - I want to know more about workplace pensions. Can the value go down as well as up? With Defined Contribution pension schemes including the PFG Retirement Plan and our NEST Scheme, your pension pot is put into various types of investment, such as shares (shares are a stake in a company). Your pension pot is invested in this way because in the long run it usually gives a better return than a savings account. Over the years, the value of investments can go up and down. But even if the value goes down in the short term, it is likely to recover in the long term. As you approach retirement, you may be asked if you want your pension pot moving into investments less likely to reduce in value in the short-term. (This is called lifestyling). Some pension schemes do this automatically. You can check with whoever runs your pension if this applies to your scheme. With Defined Benefit pension schemes such as the Cash Balance section of the Provident Financial Staff Pension Scheme the amount you get at retirement is based on various factors. These could include your earnings and how long you have been a member of the pension scheme. How exactly it is worked out varies from scheme to scheme and could change over time. I want to know more about workplace pensions. Could I lose my pension if Provident Financial plc goes bust? If you have a Defined Contribution pension scheme such as the PFG Retirement Plan or our NEST Scheme, your pension pot is looked after by Standard Life or NEST, so if Provident Financial plc goes bust you won t lose your pension pot. If a pension provider cannot pay, there are a number of organisations who might be able to help. For example, if the provider was authorised by the Financial Conduct Authority, the Financial Services Compensation Scheme (FSCS) can provide compensation. This will generally be because the provider has stopped trading and/or is unable to pay its debts. For more information visit: www.fscs.org.uk If you have a Defined Benefit pension scheme such as the Provident Financial Staff Pension Scheme, your employer is required to make sure their scheme has enough money to pay workers pensions. The Pension Protection Fund was set up in April 2005 to protect you if your employer goes bust and the pension scheme does not have enough money to pay your promised pension. For people who have reached their scheme s pension age the Pension Protection Fund will generally pay 100 per cent compensation. For most people below the pension age, the Pension Protection Fund will generally pay 90 per cent compensation.

- 8-2. Joining the Provident Financial Workplace Pension Scheme When will I be automatically enrolled? Can I ask my employer to delay my enrolment date? Do I have a choice about the scheme I am enrolled in? Can I choose not to be auto-enrolled into a pension scheme? If I earn more after 1 October 2013 what will happen? I don t earn more than 9,440 a year ( 787 a month): if I don t join the pension scheme now, what happens if I earn more than 787 a month after 1 October 2013? I am younger than 22: if I don t join the pension scheme now, what happens when I reach 22? Will the amounts paid into my pension change? What difference will tax relief make to my contributions?

- 9 - When will I be automatically enrolled? If you were an employee on or before 1 July 2013 and on 1 October 2013 you: are not already in a qualifying workplace pension scheme; are aged 22 or over; are under State Pension age; earn more than a minimum amount ( 9,440 a year in 2013-14); and work or usually work in the UK. then you will be automatically enrolled on 1 October 2013. If you became an employee after 1 July 2013 then you will be automatically enrolled on the first of the month following 2 months service, if you meet the above conditions. Can I ask my employer to delay my enrolment date? No. The Pensions Regulator has provided a date (known as the staging date) to Provident Financial plc and employers cannot change their staging date. Do I have a choice about the scheme I am enrolled in? No. Provident Financial plc has selected the Provident Financial Workplace Pension Scheme as the pension scheme for employees to be enrolled in. Once you have been enrolled into this scheme, you can choose to opt out of it if you wish. Can I choose not to be auto-enrolled into a pension scheme? No. Your employer is required by law to automatically enrol their employees, who are classed as eligible jobholders, into a qualifying workplace pension scheme. If you are auto-enrolled into a workplace pension scheme, you can choose to opt out of the scheme if you wish. If I earn more after 1 October 2013 what will happen? If you earn more than the minimum (currently 787 a month), you will be automatically enrolled into our workplace pension scheme, so long as you are aged 22 or over, are under State Pension age, and are working or usually work in the UK. If this happens, we will write to you again to give you all the information you need. You can choose to opt out of the scheme if you want to, but if you stay in you will have your own pension which you get when you retire. Provident Financial plc and you will pay into it every month. Your pension will belong to you, even if you leave us in the future. If you are aged under 22 or over State Pension age when you earn more than 787 a month then you will not be automatically enrolled, but you will have the right to join our workplace pension scheme if you want. If you earn more than 473 a month but not more than 787 a month, you will not be automatically enrolled but you will have the right to join our workplace pension scheme if you want. Provident Financial plc and you will pay into it every month. Your pension will belong to you, even if you leave us in the future.

- 10 - I don t earn more than 9,440 a year ( 787 a month): if I don t join the pension scheme now, what happens if I earn more than 787 a month after 1 October 2013? If you earn more than the minimum (currently 787 a month), you will be automatically enrolled into our workplace pension scheme, so long as you are aged 22 or over, are under State Pension age, and are working or usually work in the UK. If this happens, we will write to you again to give you all the information you need. You can choose to opt out of the scheme if you want to, but if you stay in you will have your own pension which you get when you retire. Provident Financial plc and you will pay into it every month. I am younger than 22: if I don t join the pension scheme now, what happens when I reach 22? If you earn more than the minimum (currently 9,440 a year, 787 a month) when you reach 22, you will be automatically enrolled into our workplace pension scheme. We will write to you again, around the time of your 22 nd birthday, to give you all the information you need. You can choose to opt out of the scheme if you want to, but if you stay in you will have your own pension which you get when you retire. Provident Financial plc and you will pay into it every month. Will the amounts paid into my pension change? Yes, the amounts will automatically increase or decrease accordingly if your earnings go up or down. Also, we are going to increase the amounts being paid into your pension over the next few years. This is to meet the government s minimum standards. The government has set a minimum that has to be contributed in total (this is your contribution, your employer s contribution and the tax relief added together) - this will increase as follows over the next few years: Timing Nov 2012 Sept 2017 Oct 2017 to Sept 2018 Oct 2018 onwards Minimum total percentage (of qualifying earnings) that has to go into your pension 2 per cent 5 per cent 8 per cent Within that total, the government has also set a minimum percentage that has to be contributed by your employer. This will also increase as follows over the next few years. Timing The minimum percentage (of qualifying earnings) that has to be contributed by your employer Nov 2012 Sept 2017 Oct 2017 to Sept 2018 Oct 2018 onwards 1 per cent 2 per cent 3 per cent

- 11 - To give you an indication of how these increases might affect you here is an example based on someone who earns 17,564 a year and has qualifying earnings of 12,000 a year ( 1000 a month). Qualifying earnings means what you earn between a minimum (currently 5,564 a year) and a maximum (currently 42,475 a year). If you earn more or less than 17,564 a year the actual contributions for you will be higher or lower October 2013 September 2017 Each month: You put in 8 Employer puts in 10 Tax relief 2 20 GOING INTO YOUR PENSION POT October 2017 September 2018 Each month: You put in 24 Employer puts in 20 Tax relief 6 50 GOING INTO YOUR PENSION POT October 2018 onwards Each month: You put in 40 Employer puts in 30 Tax relief 10 80 GOING INTO YOUR PENSION POT Overtime and bonus payments are included for the purposes of calculating the contributions. What difference will tax relief make to my contributions? If you re eligible, NEST will claim tax relief on your contributions and add it to your pot. The basic rate of tax relief is 20 per cent. So, if your minimum contribution is 100, you ll pay in 80 and you ll also get another 20 in the form of tax relief. In total 100 will go into your pot.

- 12 - If you re not eligible for tax relief, then you ll pay your whole minimum contribution, but there will be no tax relief money. In the example above, you would pay 100 unless your employer chooses to top up your contribution by paying extra for you.

- 13-3. What if I m not sure it s for me? What if I m not sure it s for me? I can t afford it What if I m not sure it s for me? I don t need to start saving for my pension yet What if I m not sure it s for me? It s too late for me I ve been automatically enrolled but I don t want to save for my retirement. Can I opt out? How do I opt out?

- 14 - What if I m not sure it s for me? I can t afford it For many people, paying into a workplace pension scheme is a good idea - even if they have other financial commitments, such as a mortgage or a loan. This is because you re not the only one putting money in. Your employer has to contribute too, provided you earn more than a certain amount ( 5,668a year in 2013-14). Most people will also get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as tax, goes into your pension instead. Over time, this money adds up and can grow. But you should make sure you can afford to meet your other commitments. If you re behind on your mortgage, rent, credit card or other debt payments then a pension might not be the right step at the moment. It s something you should come back to at a later date, once your debts are more under control. If you start saving into a workplace pension but then a few months or years later you want to stop paying, you can do so. You might want to check with whoever runs your pension scheme what happens when you stop paying, and how to rejoin. You can start paying into some employer s schemes again at a later date, if you decide you want to. Provident Financial plc will accept you into our Workplace Pension Scheme with NEST once in every twelve month period. This means if you leave, join, and then leave again within twelve months we will not accept you a second time until 12 months has passed since you left the scheme. If you opt out or you stop making payments, Provident Financial plc is required to automatically enrol you back into the NEST pension scheme every three years after you originally joined. This is because your circumstances may have changed and it may be the right time for you to start saving. Your employer will contact you and you can choose to stay in the workplace pension or opt out. If you re struggling with debts and would like advice on how to manage your money, you might find the Money Advice Service a good starting point. Website: www.moneyadviceservice.org.uk What if I m not sure it s for me? I don t need to start saving for my pension yet It may seem early to start planning for later life, but remember you could have twenty years of retirement and you will need an income. A workplace pension is one way to provide that income. Usually, the younger you are when you start paying into a pension the better. The money has more time to grow. So even if it s only a small amount, the money you put away early in life can build up over time.

- 15 - What if I m not sure it s for me? It s too late for me Being in a workplace pension is worth considering, even if you think you re too old. Unless your retirement is just a few weeks away, there s still time to build up some money. Unlike other ways of saving, being in a workplace pension means you re not the only one putting money in. Your employer has to contribute too, provided you earn more than a certain amount ( 5,668 a year in 2013-14). Most people will also get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as tax, goes into your pension instead. If, when you retire, your pension savings are not more than a certain amount, you might be able to take it as a cash lump sum (instead of a regular income). To find out if this is possible, and if so, the amount and other rules, check with whoever runs your pension scheme. I ve been automatically enrolled but I don t want to save for my retirement. Can I opt out? Yes you can, but you should think very carefully before you do. The Basic State Pension is designed to provide you with enough to cover only the basics when you retire. Putting money away through a workplace pension scheme like NEST makes sense. This is because as well as the tax relief you ll get on your contributions, your employer may also contribute to your retirement pot. How do I opt out? To opt out, you need to contact NEST preferably via the internet (Search for NEST Pension then Select NEST for Savers then Your NEST account ). You will need your NEST ID which is sent to you by NEST in a welcome pack shortly after you join the scheme. Alternatively you can contact NEST on 0300 020 0090. If NEST notifies Provident Financial plc that you have opted-out between 1 October 2013 and 31 October 2013, you will be removed from the pension scheme. Any payments you have already made will be refunded, and you will not have become an active member of the scheme on this occasion.

4. Already have a pension? - 16 - I m paying into a personal pension already, what should I do? I had a workplace pension in a previous job, what should I do about that? I already pay into a Personal Pension Scheme. Will auto enrolment affect me? What happens if I have more than one job? How do I work out what my employers and I should be contributing?

- 17 - I m paying into a personal pension already, what should I do? It s possible to have both a workplace pension and your own personal pension, so you could choose to continue paying into both. Or you might choose to continue with just one of them. It depends on your circumstances - for example, what you can afford and what your personal and workplace pension schemes are offering. With your workplace pension, you will receive a contribution from your employer that you won't get with your own personal pension. However, your own personal pension may have a guarantee about future income. If you re considering this question, The Pensions Advisory Service might be a good place to start. The Pensions Advisory Service is an independent voluntary organisation which provides free information about pensions: Website: www.pensionsadvisoryservice.org.uk I had a workplace pension in a previous job, what should I do about that? You could leave it where it is. You will get it when you retire, so long as you were in the pension scheme long enough. The length of time needed will be in the pension scheme rules. Or you might be able to combine it with your new workplace pension. If you re considering doing this, you need to check with your current pension provider that it s possible and, if it is, how to go about doing it. If you need help with your pension options, The Pensions Advisory Service might be a good starting point. Website: www.pensionsadvisoryservice.org.uk If you have lost track of a pension, the government s Pension Tracing Service could help provide you with the contact details for that pension. Website: www.gov.uk/find-lost-pension I already pay into a Personal Pension Scheme. Will auto enrolment affect me? A Your employer will still need to assess you for auto enrolment. Employers are required to enrol eligible jobholders into a qualifying workplace pension scheme if they are not already in one. If you are auto-enrolled into a workplace pension scheme, you can choose to opt out of the scheme if you wish. What happens if I have more than one job? How do I work out what my employers and I should be contributing? For each job you have, your employer will need to contribute at least the minimum required to comply with the law. If this means that more than NEST s annual contribution limit ( 4,500 for the 2013/14 tax year) ends up being contributed as a result, NEST will still accept it, so you don t need to worry about this.

- 18-5. NEST the pension provider What is NEST? How does NEST work? How does NEST fit with personal pensions from insurance companies? Will NEST communicate with me about my NEST pension pot? Do NEST offer the lowest fees on the market out of all pension schemes?

- 19 - What is NEST? NEST is an easy to use, great value pension scheme that any employer can use to meet their new workplace pension duties. It s been designed specifically for automatic enrolment following extensive research into the needs of our future members. They have an award-winning investment approach and use plain language to make pensions easier to understand. NEST is run by an independent Trustee in its members interests on a not-for-profit basis. It gives workers one retirement pot for life. The pot moves with them whether they change contract, employer, become self-employed or stop working. This is especially useful if they re freelancing, as it means they just have to pay into a single retirement pot. NEST s key features are: clear communications easy to use puts the worker in control an investment approach based on what workers need great value travels with the member run for the benefit of members. How does NEST work? NEST is a way of saving for retirement. Money from the employer, along with any tax relief, is added to a worker s own contributions and used to buy different types of investment on the worker s behalf. The value of these investments is expected to go up in the long term. After they reach the age of 55 workers can take their money out of NEST to buy a retirement income and take some of their pot as cash if they want. How does NEST fit with personal pensions from insurance companies? NEST is designed for a target market that is largely new to pensions saving. It complements existing workplace pension schemes by increasing access for millions of people who may not have had access before. NEST has very competitive charges for smaller pension pots for example those who change jobs frequently or low earners. Will NEST communicate with me about my NEST pension pot? Yes. Once a worker is enrolled, all communications relating to a worker s NEST pot will be sent by NEST to the worker directly. This may be done through the worker s online account, or sent by post if the worker has requested this. Do NEST offer the lowest fees on the market out of all pension schemes? Probably not, but the very lowest fees tend to be offered to higher earners in large companies. People who aren t higher earners or work for smaller companies tend to be charged more. We re confident that NEST is low cost compared to the sorts of fees our target market would have to pay to other pension providers.

- 20-6. Your NEST pension account How do workers keep track of their pension after they join? Can you move money into NEST from another pension scheme? Can my partner pay into NEST on my behalf? Where is the money invested? Are there other fund choices? What happens if I don t want to invest in NEST Retirement Date Funds? What happens if I would like a Sharia-compliant fund? What happens if my retirement pot goes down in value? What happens to the money I save in NEST? What is the annual contribution limit? How much will I get from my workplace pension when I retire? Will it be enough?

- 21 - How do workers keep track of their pension after they join? NEST is an online scheme. This means that they provide almost everything workers need to know about their pension through their online account. They also provide a UK-based contact centre and workers can ask to receive information by post if they prefer. A worker s login details will arrive with their Member welcome pack a few days after they ve joined NEST. They can then quickly and easily activate their account. Once the account s been activated workers can log on at nestpensions.org.uk whenever they want to check what s been added to their pot and update their details. Can you move money into NEST from another pension scheme? You can only transfer money into NEST if: a court has awarded you a share of an ex-spouse or civil partner s retirement pot in a divorce or at the end of a civil partnership. you ve spent more than three months but less than two years saving in a workplace pension that s an occupational scheme. Can my partner pay into NEST on my behalf? Yes they can. We can accept contributions made by any third party to your retirement pot on your behalf. Your partner s contributions should be paid from a UK bank account and can be paid via debit card but not by Direct Debit or direct credit. Their payments will count towards your annual contribution limit. Where is the money invested? Retirement pots are invested in an investment fund. NEST uses member s money to buy and sell things like company shares, property or loans to carefully selected companies and governments that will pay interest and grow their savings. Spreading workers money around different types of investment in this way means their money is safer in the long term than if it was invested in just one place. Unless a worker tells NEST otherwise they ll put their money into one of the NEST Retirement Date Funds. There s one for every year a worker could take their money out of NEST. For example, if they expect to take their money out in 2022 their retirement pot will be invested in the NEST 2022 Retirement Fund. If a worker does not confirm when they would like to take their money out, their NEST retirement date will be linked with their State Pension age. If they tell NEST that they want to change the year they plan to take their money out of NEST, NEST will switch them into the right fund free-ofcharge. NEST look after worker s money in different ways depending on how close they are to taking their money out of NEST. There s more about this in:nestpensions.org.uk/nest-retirement-date-funds

- 22 - Are there other fund choices? We believe the NEST Retirement Date Funds are the best option for most of our employees. However, NEST does offer a choice of funds for people with personal beliefs or preferences about how their money is managed. You can find out more at: nestpensions.org.uk/fund-choices What happens if I don t want to invest in NEST Retirement Date Funds? NEST offer a carefully selected range of other funds for members who want to have a say in where their money is invested. What happens if I would like a Sharia-compliant fund? NEST offers a Sharia-compliant fund. What happens if my retirement pot goes down in value? It s normal when investing for the long term for your funds to go up and down along the way. The aim of saving in a pension scheme is to make your money grow in the long term. NEST s investment experts aim to take the appropriate amount of risk when investing members pots throughout your time saving with NEST. What happens to the money I save in NEST? Your money will be invested. This means that NEST aims to get a better return on your money than if you put it in a bank account, for example. What is the annual contribution limit? The annual contribution limit is the maximum that can be added to your retirement pot in one year. This includes contributions from you and your employers as well as tax relief from the government. It s 4,500 for the 2013/14 tax year (see notes below) Notes - This figure will be adjusted annually in line with average earnings. How much will I get from my workplace pension when I retire? It s possible to get an idea of how much you will get from your workplace pension by getting a pension estimate (also sometimes known as a pension projection ). You can get this from NEST the company that runs our Workplace Pension Scheme either by emailing support@nestpensions.org.uk or by calling 0300 020 0090. Will it be enough? Being in a workplace pension means you ve taken an important step towards giving yourself the lifestyle you would like in later life. You may want to start thinking about the things you will need money for in retirement such as paying bills, transport and buying food, and the things you may also want to do such as: Run a car Meet friends for lunch or drinks Buy gifts for your family or friends Go on days out/ holidays Do sport or other leisure activities Once you have an estimate of how much you can expect to get from your workplace pension you can think about whether it will be enough.

- 23 - If you re concerned you will not have enough, you could think about contributing more to your pension, working longer, and/or saving in other ways. You can find out more about your options at: www.gov.uk/plan-retirement-income After 2 years membership of the NEST scheme you will receive an invitation to join the PFG Retirement Plan which gives you the opportunity to pay more and receive higher contributions as well as increased death in service cover and long term disability income. You need to complete and return the application form by the deadline as you will not be given a further opportunity to join that scheme.

7. Taking money out - 24 - Can I take the money out? What happens at retirement? How much will NEST s members get when they retire? How do I get the most from my retirement income? What happens if I don t want to buy a retirement income product from NEST s panel of providers? What happens if I really need the cash in my retirement pot before I retire?

- 25 - Can I take the money out? Currently, most people can t take money from any pension scheme until they are aged at least 55. The exact age you get your pension depends on the rules of the scheme. To find out, check with whoever runs your pension scheme. What happens at retirement? By law a member of a pension scheme cannot normally take their money out before their 55th birthday. A member can use their retirement pot to buy a retirement income, also known as an annuity. A member can also take up to 25 per cent of their retirement pot as a tax-free cash lump sum. As members get close to taking their money out of NEST, they ll be able to use the Retirement pack to support them in making their choice. They ll receive their Retirement pack six months before they take their money out of NEST. NEST also gives members access to our panel of retirement income providers known as the Retirement Panel. How much will NEST s members get when they retire? The more money a worker has in their retirement pot when they take their money out, the greater the annual income they can buy. How much income they get also depends on interest rates when they retire and the retirement income products being offered by companies at the time. Members and non-members can find out how much they might get when they retire by using NEST s online Pension Calculator: nestpensions.org.uk/pension-calculator How do I get the most from my retirement income? NEST will help you to get a range of quotes from a number of retirement income providers through their Retirement Panel. You are also free to shop around on the open market. What happens if I don t want to buy a retirement income product from NEST s panel of providers? NEST provide all their members with guidance to help them decide on what s likely to be the most appropriate type of product to buy. If you don t want to buy a product from any of the providers on NEST s panel they ll aim to make it as easy as they can for you to buy a product from another provider. What happens if I really need the cash in my retirement pot before I retire? Normally you won t be able to use your retirement pot until age 55, even if you do have a financial emergency. To cope with life s unexpected costs you might want to consider building up a cash fund you can access easily.

- 26-8. Ill health and death benefits What happens to my pension if I die before retiring? What happens if a NEST member dies before taking their benefits? What happens if I become seriously ill before I m due to take my money out of NEST? What happens if I die soon after I buy a retirement income?

- 27 - What happens to my pension if I die before retiring? The rules vary depending on the type of scheme. Find out from whoever runs your pension whether you can nominate (choose) someone to receive the money if you die and how much they would get. If you can nominate someone, whoever runs your pension should ask you to confirm in writing who that person is when you first join the pension. If they don t do this, you should ask them for a nomination form. You can change your nomination at any time. It s important to review it if your circumstances change. Please note: although in most cases the money will go to whoever is nominated, organisations who run pension schemes are allowed to pay it to someone else if this is needed. For example, if the person nominated cannot be found or has died. What happens if a NEST member dies before taking their benefits? When a worker is enrolled NEST will write to them asking them to let NEST know who they want to get their retirement pot if they die before taking their money out of NEST. This could be their partner, a member of their family, a favourite charity or a combination of people and organisations. They can tell NEST in writing or through their online account. If a worker doesn t nominate someone then NEST will normally pay it to whoever has been appointed to look after the worker s estate. They ll then be responsible for distributing the money from the retirement pot in line with the worker s will or, if they haven t left a will, in line with the law. What happens if I become seriously ill before I m due to take my money out of NEST? You may be able to take your money out of NEST before you re aged 55 if you re ill. If you re seriously ill, you may be able to take your entire pot as tax-free cash. What happens if I die soon after I buy a retirement income? Your retirement income product will give you an income for as long as you live, no matter how long this is. No more money will be paid after you die unless you ve purchased a type of retirement income that includes benefits such as a guarantee that your pension will be paid for a minimum number of years (say 5 years) or a dependant s pension.

9. Moving Jobs - 28 - What if I move jobs? What if I leave my job to become self-employed or stop working?

- 29 - What if I move jobs? You may be automatically enrolled into a new workplace pension. This will depend on the size of your new employer, when you move, and if you meet the criteria listed above. Very large employers will automatically enrol all new workers who meet the criteria from late 2012 onwards. Smaller employers will follow sometime after this. If your new employer has a workplace pension but they don t automatically enrol you, they may give you the option of joining if you want. If your new employer doesn't automatically enrol you, this will be because of one or both of the following reasons: they are not yet required to do so; or you don't meet the criteria listed at question one. If you start a new pension (either workplace or personal ), you may be able to combine your old pension with your new one. Your new pension scheme provider will be able to tell you if this is possible and, if so, how to go about doing it. Or if you want to, you might be able to continue making contributions to your old pension scheme after you ve left your job. You would need to contact whoever runs your pension scheme to find out if this is possible, if there will be a cost involved and if you will get tax relief. If you can t or don t want to do either of these options, then what happens to your pension depends on the scheme rules. Check with whoever runs your pension scheme. Nowadays lots of people move jobs several times in their working lives, so it s important to keep track of the pensions you have. Keeping your statements will help you do this. If you have lost track of a pension, the government s Pension Tracing Service could help provide you with the contact details for that pension. Website: www.gov.uk/find-lost-pension What if I leave my job to become self-employed or stop working? You should think about what income you ll have to live on in later life. Your employer will stop paying into your workplace pension, but you might be able to continue contributing, if you want. You would need to contact whoever runs your pension scheme to find out if this is possible and if there will be a cost involved. Alternatively, you might want to set up your own personal pension, or put other plans in place to give you an income when you retire.

- 30-10. Can I join a better scheme? Options after 2 years membership of the Workplace Pension Scheme What are the future joining Conditions? What about Management employees?

- 31 - Options after 2 years membership of the Workplace Pension Scheme After 2 years membership of the workplace pension scheme employees will be invited to become members of the PFG Retirement Plan instead of the Workplace Pension Scheme. This invitation will be open for a period of three months only. The PFG Retirement Plan offers the opportunity for members to make higher pension contributions to which higher company contributions are added, as shown in the table below: Contribution paid by you (Gross)% Contribution deducted from take home pay (Net)% The Company s contribution% 3 2.4 5.0 4 3.2 6.0 5 4.0 7.0 6 4.8 8.0 7 5.6 9.0 8 (maximum) 6.4 (maximum) 10.0 (maximum) The above contribution rates are applied to Basic Salary each month. The PFG Retirement Plan also includes an option to pay contributions via SmartPension with higher employer contributions and lower national insurance contributions. Membership of the PFG Retirement Plan increases the lump sum death benefit to 3 x salary and also includes Permanent Health Insurance. What are the future joining Conditions? From 1 October 2013 entry to the PFG Retirement Plan will be by invitation only after 2 years membership of the Workplace Pension Scheme. Employees who do not join the PFG Retirement Benefit Plan at their first opportunity will not have a right to join that scheme in future. What about Management employees? All new Management employees after 1 October 2013 will be given an invitation to join the PFG Retirement Plan, which will expire within 3 months of the date of joining the company. Those who choose not to join will be automatically enrolled into the Workplace Pension Scheme on 1 st of the month following two months service. They can opt-out of that scheme if they wish. Having declined to join the PFG Retirement Plan at their first opportunity, any management employee would have to complete two years membership of the Workplace Pension Scheme in order to have a further opportunity to join the PFG Retirement Plan, and would have no right to join the PFG Retirement Plan at any other time.

11. More Information - 32 - Where can I get further information? What does the Law require of Provident? Where can I get help or find out more about the workplace pensions reforms and NEST?

- 33 - Where can I get further information? If you have any questions about the Provident Financial Workplace Pension Scheme contact NEST at Nene Hall, Lynch Wood Business Park, Peterborough, PE2 6FY Tel: 0300 020 0090 or support@nestpensions.org.uk. You may have questions about workplace pensions and saving for your retirement. More information on pensions and saving for later life can be found on: www.gov.uk/workplace-pensions. More information about the Provident Financial Workplace Pension Scheme can be found on the pensions website at www.pfpensions.co.uk. If you have any questions about pensions please contact the Pensions Department at Head Office on pensionenquiries@providentfinancial.com For information on pensions and saving for later life visit: https://www.gov.uk/workplace-pensions What does the Law require of Provident? If you are under 75, work or usually work in the UK, and earn over 5,564 a year (the amount set by the government for this): we must by law continue to maintain your membership of a scheme that meets certain government standards; and if your membership of such a scheme ends (and it is not because of something you do or fail to do), we must by law put you into another scheme that meets government standards straightaway. Where can I get help or find out more about the workplace pensions reforms and NEST? The Pensions Regulator gives useful information including when your staging date is and what you need to legally tell your workers. See thepensionsregulator.gov.uk Gov.uk for more information on the workplace pension reforms visit gov.uk The Money Advice Service offers free advice to help workers make the most of their money. They can help with questions about debt repayment, saving and budgeting. See moneyadviceservice.org.uk The Pensions Advisory Service an independent non-profit organisation that provides free information, advice and guidance on the whole spectrum of company, personal and stakeholder schemes. See pensionsadvisoryservice.org.uk NEST you can find out more about NEST by visiting nestpensions.org.uk/nestforemployers This Q&A document is only a guide and does not cover every circumstance. The information contained in the document is correct as of. Some of the information may become inaccurate over time, for example because of changes to the law.