Talisman group pension member guide
Transcription
Talisman group pension member guide
IT’S GOOD TO PLAN AHEAD Talisman Introducing your retirement savings plan This is your handy reference guide. Please keep it in a safe place. CONTENTS 2 Introducing Royal London 4 Making payments 5 Investing your money 7 Accessing your pension 9 Frequently asked questions 11 Your next step 15 WELCOME TO YOUR TALISMAN GROUP PENSION PLAN This reference guide contains a background to Royal London as well as lots of useful information about your pension plan: how it works, the investment choices available and what happens when you start taking your retirement benefits. You should keep it in a safe place and refer to it if you have any questions. 3 INTRODUCING ROYAL LONDON We’re a mutual organisation and, unlike a PLC, we don’t have any shareholders to pay. Instead we’re owned by our members1 and everything we do is for the long-term benefit of our members1 and all customers. Members can take part in our AGM and have their say on the future of our business. Quite simply, we answer to you - so we’ll always be looking out for your best interests. Our business is to provide pensions and to help ensure our customers enjoy financial freedom in their later years. We’re proud to play such an important and valuable role in our customers’ lives. We believe passionately in independent financial advice and only sell our pensions through financial advisers. We call ourselves pension specialists. But you don’t have to take our word for it - our long list of industry awards proves it. Everything we do, from our carefully selected investment choices to our excellent customer and online service, is designed to make saving for your future as easy as possible. You’ll find out more about us on our website – royallondon.com A bit about group pension plans A pension is for everyone who wants to retire when they get older, and doesn’t want to worry about paying the bills when the income from their job stops. It can also provide an income for your dependants after your death. The amount of money you’ll get from your pension depends on a number of factors including the amount contributed while you were working and the performance of your investments. 4 1 A group pension plan gives you the ability to control your own investment. Your employer can make payments to your plan on your behalf. Depending on the way the plan was set up, you may be able to make your own payments. Your payments are taken directly from your salary and paid by your employer to Royal London. We invest them in your chosen investment funds until you start taking your retirement benefits. And when that time comes, you will use the pension savings that you have built up to give you a regular income in your retirement. Tax benefits To encourage you to save into a pension, the Government offers generous tax advantages. • The payments you make benefit from tax relief. So each time you pay into your plan, the taxman pays in too. For example, if you wanted to pay £100 into your plan, you need only pay £80 and the taxman will pay the other £20. • If you’re a higher rate taxpayer you can normally claim additional tax relief through your self-assessment. • Your savings are allowed to grow in a taxefficient way. • If you die before you start taking your retirement benefits the benefits can be passed on tax-free as a lump sum to any beneficiary (up to the lifetime allowance). We’ve based these details on our understanding of current taxation law and practice. They might be affected by any future changes in legislation and your own personal circumstances. If you need more information on tax you should get professional advice. You’ll be able to see from your terms and conditions whether you’re a member. MAKING PAYMENTS This couldn’t be easier. Your employer will deduct your regular payments from your salary and send them to us along with any payments they make on your behalf. So you don’t need to worry about setting up direct debits or sending cheques. Regular payments can be paid as a percentage of your earnings or as a fixed amount. Your plan may be set up so your payments increase at specific intervals. Your illustration document will provide further details if this is the case. Deciding how much to save Generally speaking, the more you save, the more you can expect to get back. So you should save as much as you can afford. And you’ll receive tax relief on all of the payments you make so long as they don’t exceed 100% of your earnings. This limit applies to the payments you make into this plan and any other pension plans you have in a tax year. Your employer will normally help you by making payments into your plan. Often, the amount they pay is based on the amount you pay. If this applies you should pay as much as you can to get the maximum amount from your employer. There is an upper limit on the total amount that can be paid into this and any other pension plan you have in a tax year. This is known as the annual allowance – if you exceed it you’ll incur a tax charge on the excess. 5 Boost your pension savings with one-off payments Making one-off payments can really help to boost your pension savings. You can make one-off payments at any time. So if you receive a bonus from work or have some spare cash, you can pay it into your plan so long as you don’t exceed the annual allowance. These payments can be made through your employer’s payroll or by cheque, and they benefit from tax relief in the same way as your regular payments. 6 Transfer other pension plans If you have pension savings built up in other pension plans you can transfer them into this plan. As your payments to the previous arrangement have already received tax relief, the transfer payment won’t receive any more. Transfers are complicated, so if you’re thinking of making one you must talk to a financial adviser to make sure it would be in your best interests. If you don’t have a financial adviser, we tell you how you can find one on page 15. INVESTING YOUR MONEY When deciding how to invest your pension savings you have two main options. Your employer may have chosen an investment option for your plan with help from their financial adviser. You can stick with this option or you can choose your own investments instead. Here you’ll find a summary of the investment options available. Remember that investment returns can fluctuate and are not guaranteed. The value of your investment can go down as well as up and you may not get back the value of your original investment. Choosing your own investments If you decide to choose your own investments, there are a few things you should think about. Spread your investments Most financial experts agree that the best way to invest your pension savings is to have a spread of investments, such as equities (also known as stocks and shares), property and cash deposits. So if one particular investment performs poorly, you won’t be as badly affected. This is called asset allocation. Think about how long you have to save The amount you invest in each type of investment is affected by the length of time you have to save. For example, someone in their twenties might aim to achieve maximum growth by investing more in equity funds. On the other hand, an investor with only a few months to go until they start taking their retirement benefits might favour less risky investments such as cash. Consider your attitude to risk The more risk you’re willing to take, the higher your potential return – but the greater your chance of loss. Lower risk investments on the other hand offer greater security but lower potential returns. You need to decide how much risk you want to take with your pension savings. To get an idea of your attitude to risk simply complete our online risk questionnaire at royallondon.com/riskattitude Decide how involved you want to be If you want to do everything yourself we offer a carefully selected range of funds for you to choose from. If you’d like us to do the work, our Retirement Investment Strategies offer an ‘off-the-shelf ’ solution. 7 Retirement Investment Strategies Funds The closer you get to taking your retirement benefits the more likely it is that you’ll want to reduce the risk to your savings. Our Retirement Investment Strategies are designed to help with this. If you want to pick your own funds we offer a carefully selected range to choose from. In the early years of your plan, they’ll aim to provide maximum investment growth by investing in a higher risk portfolio. In the later years they aim to reduce your exposure to risk by investing in lower risk portfolios. This happens automatically, you don’t have to do anything. 8 • Our pension funds Our in-house funds are managed by our investment division – Royal London Asset Management. These funds offer opportunities to invest in the UK and overseas and aim to provide consistent long-term growth. • Specialist fund managers You also have access to the investment expertise of some of the world’s leading investment companies through our range of externally managed funds. Some of these funds have an additional charge. TAKING YOUR RETIREMENT BENEFITS The savings you’ve built up in your plan belong to you. And when it’s time to take your retirement benefits, you’ll find that your plan has a number of flexible options. Your choices You can start taking your retirement benefits any time after age 55, even if you’re still working. You can take some or all of your plan as a cash lump sum – 25% of each lump sum will be tax-free. The rest will be subject to tax. Alternatively, you can take up to 25% of the value of your plan as a tax-free cash sum. You can use this money in any way you want – you could pay off your mortgage, or simply have extra money to meet the cost of living. The rest of your plan or all of it if you haven’t taken a tax-free cash sum, can be used to provide you with an income for life by buying an annuity. You don’t have to take your income from us. You’re free to shop around other providers to get the best rates. There’s no charge if you do this. You also have the option to move to another plan that gives you the flexibility to take the regular income you want, when you need it. Unlike an annuity, income payments are not guaranteed for the rest of your life. Both the income payments and the value of your plan may go down. Regardless of which option you choose, it’s important that you speak to a financial adviser before you make your decision. Making your decision Don’t worry if you haven’t made up your mind yet about how you want to take your retirement benefits. We’ll write to you when you’re close to your chosen retirement date with more information about your options. Accessing your pension before your selected retirement date There are different versions of the Talisman Group Pension Plan. For some versions, where you access your pension savings before your selected retirement date, the value of your pension savings may be reduced. Versions one to four The full value of your pension savings may be paid to you on your retirement as long as you retire no more than five years before your selected retirement date. If you retire earlier than this date, your pension savings will be calculated as a transfer value and will be a lower amount. See the What happens if I leave my employer? section on page 11. Versions five and six The full value of your pension savings may be paid to you regardless of when you retire. See the What happens if I leave my employer? section on page 11. If you are unsure about which version your plan is, please contact your financial adviser. Find the best deal for you Just because you have saved with Royal London doesn’t mean that you have to take your income from us. You’re free to shop around and compare other companies’ rates to get the best deal. Know your limits There is a limit on the amount you can have built up in this and any other pension plan when you start taking your retirement benefits. It’s set by the Government and it’s called the lifetime allowance. If you want to find out more visit yourplan.royallondon.com. 9 Other things to think about The benefits you choose You will want to know how much you’ll get when you start taking your retirement benefits. The amount you’ll get will depend on a number of things. We mentioned earlier that when you start taking your retirement benefits, you can choose from a range of options. The option you choose will affect the level of your income. How much you pay into your plan Pension rates Generally speaking, the more you pay in, the more you can expect to get back. You can find more information on making payments on page 5. The amount of income you receive depends on the rates available when you start taking your retirement benefits. Remember that you can shop around to find the best deal. How long your payments are invested The earlier you start saving, the more chance your money will have to benefit from investment growth. The investments you choose The performance of your chosen investment funds will affect the overall value of your pension savings. You’ll find more on the investment choices available to you on page 7. The charges under the plan The plan charges will affect the amount you get back. To find out what the charges are under your plan, look at the What are the charges? section on page 12 or speak to us. You’ll find our contact details on page 15. Further details regarding the charges can also be found in your key features document. When you start taking your retirement benefits If you decide to take your retirement benefits early, you will have saved less into your plan. This means that the value of your pension savings could be less than if they had remained invested longer. There may also be charges made to your plan if you choose this option. 10 Keeping track of your pension These days, many of us do our banking online: and at Royal London we offer a similar facility for your pension. Our award-winning online service allows you to access lots of information about your plan, including: • the current value of your pension savings • details of the investment funds your savings are invested in • payment details. We designed our online service to keep you in control. It allows you to keep track of how your pension savings are performing. If your employer has set up online access for you, we will write to you with information on how to register and start using the service. We’ll also send you a paper statement each year showing you how your pension savings are performing. FREQUENTLY ASKED QUESTIONS What happens if I leave my employer? If you leave your employer you can: • Continue your existing payments to this plan – remember that the payments your employer makes will stop. • Stop making payments and leave the pension savings you have built up invested. • Transfer the pension savings you’ve built up to another pension plan. Transfers are complicated and you must talk to a financial adviser if you are thinking of doing this. Some Talisman Group Pension Plans may have received a discount to the charges. Typically, if you leave your employer this discount will be lost. The amount of your transfer value will depend upon which version of the Talisman Group Pension Plan you have: • For versions one, three and four, the value of your pension savings is available as a transfer value if taken within five years of your selected retirement date. At other times, we may apply a fund reduction factor. Any reduction made will be to take account of any expenses properly incurred in setting up and administering the plan on an ongoing basis, which have not been deducted before the transfer takes place. • For version two, the value of your plan is available as a transfer value if taken within five years of your selected retirement date. However, if taken at any other time the full value of your pension savings may not be available as a transfer value. In strictly limited circumstances, the full value of your pension savings may be available as a transfer value before you have reached five years from your selected retirement date. The circumstances relate to the status of the other members in your group plan and the transfer value must have been requested within three months of you leaving your employer’s service and stopping making payments. You will be notified if this applies to your plan. • For versions five and six, the value of your pension savings will be available as a transfer value at any time. • If your plan is invested in the With Profits fund we may reduce the value of your plan by applying a market value reduction if you take money out of the fund at any other time than your selected retirement date. What happens if I die before I start taking my retirement benefits? We will normally pay out your plan value as a tax-free lump sum to any beneficiary you have nominated such as your spouse, civil partner, or dependants on your death. If your employer has added extra life assurance to your plan, the appropriate amount will be paid out as well. Alternatively, you can use the plan value on your death to provide an income for any beneficiary you have nominated. You can tell us who you would like to receive your benefits if you die by completing the nomination of beneficiaries form included in your plan documentation. 11 What happens if I die while taking my retirement benefits? When you start taking your retirement benefits, you can ask for your regular income to be paid to any beneficiary such as your spouse, civil partner or dependants if you die. If you choose this option your regular income may be lower. Can I increase my regular payments? You can increase your regular payments at any time. Just let your employer know what your revised payments are and they’ll handle the rest. What about pension savings I have built up with previous employers? If you have pension savings built up with a previous employer, you can: • Transfer the value of your existing pension savings into this plan. Transfers are complicated, so if you’re thinking of doing this you must talk to a financial adviser to make sure it’s in your best interests. • Pay into both arrangements so long as you don’t exceed the annual allowance. • Stop making payments and leave the plan invested. What are the charges? There is a charge for managing your plan known as the annual management charge. This is taken from the pension savings you’ve built up. Your illustration document will show the annual management charge that applies to your plan. 12 There may be other charges that apply to your plan such as the following: • A monthly member charge may apply to your plan. This charge will be taken from each regular payment and increases each year in line with the Retail Prices Index. • An initial administration charge of £25 may be deducted from any single payments and transfer payments paid to the plan. • After the deduction of any administration charge, a percentage of each payment will be allocated to the investment fund(s) selected. The allocation percentage will depend upon a number of factors. • A unit cancellation charge may also apply to the plan. • Your payments buy units at the ‘offer’ price and you will sell your units at the ‘bid’ price. The bid price is currently about five per cent lower than the offer price. • Commission may have been paid to a financial adviser who helped set up your plan. You should check your illustration document for further details. Further details on these charges can be found in your key features document. Are any bonuses added to my pension savings? What if I can’t keep up my regular payments? Depending upon what version of the Talisman Group Pension Plan you have, a bonus may be added to your pension savings when you take your benefits: Don’t worry. You can reduce the amount to a level that’s more affordable. But if you do this, the amount your employer pays may also reduce. Or you can take a payment holiday while you remain in the group plan. The member charge, where applicable, will continue to be deducted during a payment holiday but there are no additional charges. You can start regular payments again at any time. Remember to check with your employer what effect this will have on their payments. • For versions one, two and three, a loyalty bonus may be added to your pension savings on retirement, death, or transfer. The full value of the bonus will be paid within five years of your selected retirement date. A reduced rate may be paid if you take your benefits or transfer your pension savings earlier than five years before your selected retirement date. Loyalty bonus will cease to accrue on funds secured by regular premiums if your policy is made paid-up prior to your selected retirement date, transfer or death. You may not receive the full amount of loyalty bonus on funds secured by regular premiums if your policy is made paid up earlier than 5 years before your selected retirement date. Different rates of loyalty bonus will be applied to funds built up from regular and single payments. The level of loyalty bonus will depend on the number of years which have elapsed since the payment was made. Full details of the loyalty bonus can be given on request. • For versions four, five and six, and as an alternative to a loyalty bonus, additional units calculated as a percentage of your fund may be added to your pension savings at the end of each scheme year. Details will be shown on your illustration document, if applicable. What if I want to leave my plan invested? You can stop your payments altogether and leave your pension savings invested in your chosen funds or Retirement Investment Strategy. The value of your savings when you take your benefits will depend upon which version of the Talisman Group Pension Plan you have: • For versions one, three, and four, the full value of your pension savings will normally be available as a benefit if payments stop at least four years after your plan starts. At other times, we may apply a fund reduction factor. Single payments may continue to be made to the plan. With our agreement, you can start regular payments again. • For version two, the full value of your plan will normally be available. • For versions five and six, the full value of your pension savings will be available. 13 Can I cash my plan in early? Can I change my mind? Your pension savings are locked in until you reach age 55. You have 30 days from when you receive your plan documents to change your mind. If you decide that you don’t want the plan you should complete and return the cancellation form provided to you. It may be possible for you to start taking your retirement benefits before age 55 if your health means you can no longer carry out your job. What happens if I am off work due to sickness? If you are absent from work as a result of sickness or injury, you will normally continue making payments into the plan. If your employer makes payments into the plan, ask them what would happen to these payments. What happens if I go on maternity leave? While on maternity leave you can continue, reduce or stop your payments – the choice is yours. And when you return to work, you can easily increase or start your payments back up again. If your employer makes payments into your plan on your behalf, ask them what would happen to these payments during maternity leave. Remember that reducing or stopping your payments will reduce the amount you get back when you start taking your retirement benefits. What happens when I reach my selected retirement date? We will get in touch with you between three and six months before you are due to start taking your retirement benefits. At this point you will receive information detailing the options that are available to you. 14 Who do I speak to if I have a complaint? Providing our customers with excellent service is very important to us. But if there’s anything you’re unhappy about, talk to our Customer Service team who will try their best to resolve the matter. If you want to make a complaint you can contact us by the following methods: Customer Relations Team, Royal London House, Alderley Road, Wilmslow, Cheshire SK9 1PF 0845 60 50 050 Monday to Friday 8am – 6pm. We may record calls to help improve our customer service. [email protected] If you’re not satisfied with our response you can complain to the Financial Ombudsman at: The Financial Ombudsman Service Exchange Tower London E14 9SR YOUR NEXT STEP Throughout this guide we’ve talked about the importance of financial advice. There are a lot of important decisions to make when it comes to planning for your financial future. So it makes sense to talk to an expert before you take any action. You need to remember that small amounts of pension savings can affect your entitlement to State benefits. If you don’t have a financial adviser you should contact IFA Promotion. This is a free service that will help you find a financial adviser in your area. Visit their website at www.unbiased.co.uk/find-an-ifa. Remember that you may be charged for the service provided by a financial adviser. If you have a question that isn’t covered here or you want to talk to someone about your plan, you can contact our Customer Service team. They won’t be able to give you financial advice but they will try their best to provide you with any information you need. 0845 60 50 050 Monday to Thursday 8am – 6pm and 8am – 5pm on a Friday. We may record calls to help improve our customer service. 0131 524 8800 [email protected] royallondon.com Royal London House Alderley Road Wilmslow Cheshire SK9 1PF 15 Royal London 1 Thistle Street, Edinburgh EH2 1DG royallondon.com All literature about products that carry the Royal London brand is available in large print format on request to the Marketing Department at Royal London, St Andrew House, 1 Thistle Street, Edinburgh EH2 1DG. All of our printed products are produced on stock which is from FSC® certified forests. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304. Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London, EC3V 0RL. April 2015 27G0165/7