The Sun Life Assurance Company of Canada 1988 UK and Irish Employee Benefits Scheme ( the Scheme ) Summary Funding Statement

The Sun Life Assurance Company of Canada 1988 UK and Irish Employee Benefits Scheme ( the Scheme ) Summary Funding Statement

32 This statement is being sent to you on behalf of the Scheme Trustees, who are responsible for administering the Scheme. As you are entitled to benefits from the Scheme, we are writing to give you an update on the Scheme s financial position. Please take a few minutes to read this statement as it provides important information about the financial health of the Scheme. Who manages the Scheme? As required by law, the Scheme is managed by the Board of Trustees ( the Trustees ) who are legally bound to act in the best interest of all members. The Trustees are responsible for ensuring the Scheme is run in line with the Trust Deed and Rules and complies with all legislation. The current Trustees are: Capital Cranfield Pension Trustees Ltd Represented by Alison Creasy Capital Cranfield Pension Trustees Limited 42 New Broad Street, London, EC2M 1JD Paul J Davies c/o Sun Life Assurance Company of Canada (U.K.) Limited Matrix House, Basing View, Basingstoke RG21 4DZ Michael Edwards c/o Sun Life Assurance Company of Canada (U.K.) Limited Matrix House, Basing View, Basingstoke RG21 4DZ Trustee Chair Independent Professional Trustee Member Nominated Trustee Company Appointed Trustee We would like to thank Rob Payne, who retired as a Trustee on 31 December 2017, for all of his hard work as a Trustee of the Scheme. Rob was replaced by Michael who was appointed on 1 January 2018. Member forum The Trustees encourage members to contact them. If you would like to put a point of view or suggestion to the Trustees, please contact Julie Andrews, Secretary to the Trustees, who will ensure that issues are put to the Trustee Board on a regular basis. How to contact Julie 01256 425293 julie.andrews@sloc.co.uk Sun Life Assurance Company of Canada (U.K.) Limited, Matrix House, Basing View, Basingstoke, Hampshire RG21 4DZ

43 Summary of the Scheme s funding position Every three years a funding valuation is carried out by the Scheme Actuary (a qualified, independent professional). The Scheme Actuary determines the funding position by comparing the value of the Scheme s assets with an estimate of the current value of the Scheme s liabilities (which is the total value in today s terms of all members benefits that will be paid in the future). To calculate a current value of the Scheme s liabilities, the Scheme Actuary makes assumptions about the future, such as expected investment returns and life expectancy. The funding levels below show the Scheme s funding position on an ongoing basis as at the most recent full actuarial valuation (31 December 2016), along with the results of the approximate updates as at 31 December 2015 and 31 December 2014 for comparison. 31 December 2016 31 December 2015 31 December 2014 Total Assets 538.7m Liabilities 528.7m Total Assets 465.6m Liabilities 482.8m Total Assets 491.9m Liabilities 494.5m Funding level 102% Surplus 10m Funding level 96% Shortfall - 17.2m Funding level 99% Shortfall - 2.6m The funding position has improved from a shortfall of 17.2m as at 31 December 2015 to a surplus of 10m at the last full actuarial valuation. The main factors that contributed to the improvement in the funding level were the growth in assets and incorporating more recent life expectancy experience, which had the effect of decreasing the Scheme s liabilities. The next full actuarial valuation will be carried out as at 31 December 2019.

4 The funding plan How is my pension paid for? The employer, Sun Life Assurance Company of Canada (U.K.) Limited, is required to pay contributions to fund any deficit revealed by each formal actuarial valuation in order to ensure that the Scheme has sufficient funds to pay the promised benefits. Although the Scheme is in surplus, in order to protect the Scheme s funding position, the employer has agreed to pay a contribution of 5 million by 30 April 2018. In addition, the employer pays the majority of the Scheme s administration expenses. By law, we are also required to notify you of any refunds paid to the employer, or modifications or directions on the Scheme made by the Pensions Regulator. There have been no such refunds, modifications or directions since you were last issued with a Summary Funding Statement. The Scheme s investment policy The Scheme s assets are invested by the Trustees with the aim of meeting member payments and to get a suitable return. The Trustees regularly review the investment strategy to ensure it remains appropriate for the Scheme. The value of the Scheme s invested assets at 31 December 2017 was 529.2m ( 529.9m at 31 December 2016) and the asset allocation is split as follows: 115.4m Asset Allocation Long Term Liability Hedge Portfolio Asset Backed Securities Loans and Commercial Real Estate 248.9m 164.9m

5 The money used to pay for your pension and other benefits is held in one common fund. It is not held in separate funds for each individual. As members retire, their benefits are paid from this fund. The employer is paying the agreed contributions to the Scheme and as long as this continues we anticipate that we will continue to be able to pay benefits now and in the future. Legislation states that solvent companies must continue to pay contributions to ensure that pension schemes can pay all future benefits in full. The Pensions Regulator has powers to prevent a solvent company avoiding this responsibility. In addition, the Government has established the Pension Protection Fund to pay benefits to members of pension schemes where the sponsoring company has become insolvent leaving a scheme with insufficient assets. Further information and guidance about the Pension Protection Fund is available at www.pensionprotectionfund.org.uk or You can write to the Pension Protection Fund at: Renaissance, 12 Dingwall Road, Croydon, Surrey, CR0 2NA

6 If the Scheme were to be wound up Like all pension schemes, this Scheme contains no absolute guarantees. The Scheme promises to pay you your pension, but there are risks and it is not certain that the Scheme will be able to meet the promises in full. However, there have been improvements in member protection, and the Trustees funding plan aims to ensure there is enough money in the Scheme to pay pensions now and in the future. If the Scheme winds up you might not get the full amount of pension you have built up even if the Scheme is fully funded under the funding plan. The extent to which the Scheme can secure with an insurance company the pension rights which have built up if it were to close down is known as its solvency position. These costs are usually estimated by an actuary rather than obtaining definitive quotations from an insurance company. An estimate of the solvency position was included in the actuarial valuation as at 31 December 2016 when the Scheme was estimated to have 81% of the money needed to secure the accrued benefits of all members in full. An estimated wind up position of less than 100% is not unusual for UK pension schemes. There are currently no plans to wind up the Scheme.

7 Additional documents and information available on request Annual Benefit Statement If you are not receiving a pension, you can ask the Administrator for a statement that gives you an illustration of your estimated pension at retirement. Annual Report & Accounts Details of the Scheme s income and expenditure over the scheme year. Actuarial Valuation Report The Actuary s full report on the Scheme s assets and liabilities and the recommended contribution rate. Cash Equivalent Transfer Value ( CETV ) You are entitled to one free transfer value each year. We make a charge for any additional requests. Scheme Booklet You would have been given a copy of this when you joined the Scheme, but copies can be provided on request. Schedule of Contributions This shows how much money is being paid into the Scheme. Statement of Funding Principles Sets out the Trustees policy for meeting the Statutory Funding Objectives. The Trustees must agree its contents with the Principal Employer. Statement of Investment Principles Explains how the Trustees invest the money paid into the Scheme and its existing assets.

8 Scheme news Scheme membership The total plan membership of the Scheme decreased over the year from 3,136 to 3,039. Membership numbers at 31 December 2017 were as follows: Deferred members 1,665 Pensioner members 1,374 Member website A secure member website, known as pensionsweb, has been developed by the Scheme Administrator, Hymans Robertson. As a member of the Scheme, you have access to this secure website. Here s a summary of what you can do: View and regularly check that the personal details held by us are correct. View your payslip. View your deferred benefits and make a request for a quotation. Submit a general enquiry. Set your preferred method of communication as email if you would prefer this. To login and request a unique pin number, please visit the web address below to register. https://secure.1988onlinebenefits.co.uk If you have any difficulties with the registration process please either call 0141 566 7522 or email sloc@pensionsweb.hymans.co.uk Please tell us if you change your address. You can do this on pensionsweb or by contacting the Scheme Administrator. Data protection As you may be aware, the rules on data protection are changing. The General Data Protection Regulation (the GDPR ) is a new law which is designed to strengthen data protection for individuals within the European Union, including the UK. It will come into effect from 25 May 2018 and its main purpose is to enhance the protections around the processing of your personal data. Despite the UK s intention to exit the EU, the Government has confirmed that the GDPR will apply in the UK. As a result, the Trustees have been working with their advisers to prepare for the GDPR coming into effect and will be providing you with further information in due course.

9 How to get in touch Scheme administrator For day-to-day administration queries, such as changes of address, queries about your pension and requests for copies of documents you should contact the Scheme administrator, Hymans Robertson who provide a dedicated day-to-day pension administration service on behalf of the Trustees. How to contact Hymans Robertson 0121 212 8120 sloc@hymans.co.uk Sun Life of Canada Scheme, Hymans Robertson LLP, 45 Church Street, Birmingham, B3 2RT Nomination forms If you are a pensioner with life cover in retirement, please remember to keep your nomination of beneficiaries form up to date. This ensures the Trustees have a better picture of your circumstances and wishes in the event of your death. If you need a form, please contact the Scheme Administrator, Hymans Robertson. Transferring your benefits out of the Scheme Following the introduction of Pension Freedoms in 2015, there has been an increase in the number of members requesting a Cash Equivalent Transfer Value ( CETV ) of their benefits. If you are considering transferring your pension to another arrangement, we recommend that you take independent financial advice. Indeed, you are required to do so by law, if your transfer value is over 30,000. If you need financial advice visit www.unbiased.co.uk to find a financial adviser in your area. An adviser may charge you for the services they provide. Please note that before a financial adviser does any work for you they must agree with you the fee you are likely to pay for their services. For impartial guidance, you can get in touch with Pension Wise. It s a free service run by the government. Pension Wise can t tell you what to do with your money, but they can give you more information about how the different types of pension work, and what to look out for with taxes and fees. You can get information online at www.pensionwise.gov.uk or phone 0800 280 8880 to talk to someone or to book a face-to-face appointment.

10 Pension scams Your pension is one of your most valuable assets, for many it offers financial security throughout retirement and the rest of their lives. Like anything valuable, your pension can become the target for illegal activities, scams or inappropriate and high risk investments. It s good to remember that pension scams can take many forms and usually appear to most, to be a legitimate investment opportunity. Pension scammers are clever and know all the tricks to get you to hand over your savings. They target anyone and everyone, pressuring you into transferring your pension savings, often into a single investment. Things to look out for Being approached unexpectedly by phone or via text message Pushy people who claim they are advisers but often aren t properly qualified or registered, claiming to be able to help you access your pension early Companies that offer a loan, saving advance or cashback from your pension Any reference to loopholes, overseas investments, creative or new investment techniques. Accessing your pension before age 55 can result in an unauthorised payment which can attract significant tax charges and penalties. Additionally, taking money early means individuals will receive less pension and be worse off in retirement. Some pension scheme members lose all of their pension savings after being scammed. Make sure it doesn t happen to you! For further information about pension scams, please contact: The Pensions Advisory Service For free pensions advice and information 0300 123 104 www.pensionsadvisoryservice.org.uk or The Pensions Regulator www.thepensionsregulator.gov.uk

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