Equiniti Pensions Roadshow

Business. Empowered.

Stuart Cameron, Pensions Services Director, Xafinity
Paul Munro, Principal Consultant, Xafinity

EQUINITI’S PROPOSED
MOVE TO THE NATIONAL
PENSION TRUST
In association with


The purpose of this presentation
 Recap on the Company’s proposal to:
□ Close the Equiniti Pension Plan (EPP) and
□ Equiniti’s participation in the National Pension Trust (NatPen)

 Overview of NatPen:
□
□
□
□
□
□

What is a DC Trust and how does it work?
Contribution rates
What investment options do you have?
Your benefit options at retirement
What happens if you leave?
Options in respect of previous pension benefits

 Protection Benefits
 Next Steps & Timings
 Questions

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What is the National Pension Trust?
High quality trust based solution
Benefits
High:

 Governance
 Member engagement
 Investment support
 Decumulation support
Low:

 Governance requirements on employer
 Costs to employer
A comprehensive cost effective DC Trust based pension scheme – the
only master trust to be awarded the PQM for its ‘core’ product

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Strong Governance
Independent Professional Trustee:
■ Governs Trust to a high level
■ Ensures clear communications

channels between all providers
■ Ensures appropriate levels of:

□ Risk management
□ Internal controls
□ Administration service standards
□ Quality of record keeping

■ Maintains an action plan and corrects
any problems
The Trustee is wholly independent
of all service providers

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How does a Defined Contribution
(DC) Trust work?

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How DC schemes work
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2

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Your Pension Account

Annual Income

Company Pension
Contributions

£

Pension Pot
converted into
benefits

Tax Free Cash

Member
Contributions

Spouse’s /
Dependant’s
Pension

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Protection
Company Payment

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Benefits

No change to Contributions
Under age 30
Employee

Nothing

1%

2%

2%+

Employer

4%

5%

6%

6%

Total

4%

6%

8%

8%+

Employee

Nothing

1%

2%

2%+

Employer

6%

7%

8%

8%

Total

6%

8%

10%

10%+

Employee

Nothing

1%

2%

2%+

Employer

8%

9%

10%

10%

Total

8%

10%

12%

12%+

Age 30-44

45 and over

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Investing the Pension Pot

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Inflation

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Asset class returns

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How to Invest?
■ Previous slides explained why to invest
■ Key consideration is how to invest?
■ There are two ways to invest your contributions:
Choose from a range of Self Select Funds

OR
Choose a pre-defined Lifestyle Strategy

■ Members can rely on the ‘default’ fund, although this is not a
recommendation

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Investments
PR concerns:
■ Investment return is a key factor in determining retirement income
■ Without support many members are not well placed to make
decisions
Independent Professional Trustee has:
■ Developed processes for regularly monitoring, reviewing and (if
required) replacing

□ Default fund
□ Investment manager(s)
□ Fund Range

■ Determined investment strategy based upon membership
■ Ensured that the number and risk profile of funds reflect the
typical member’s financial capability

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Self Investment Options

Investment options

Nature of
Management

AMC %

High

UK Equity High Alpha Fund
Global Equity Unconstrained Fund
Ethical Fund
UK Equity Fund
Overseas Equity Fund
Global Equity Fund
Property Fund
Adventurous Growth Fund

Active
Active
Active
Passive
Passive
Passive
Active
Active

0.73
0.36
0.38

0.11
0.11
0.11
0.20
0.35

Moderate

Balanced Growth Fund
Diversified Growth Fund

Active
Active

0.26
0.85

Cautious

Cautious Growth Fund
Corporate Bond Fund
Pre-Retirement Fund
Fixed Interest Gilt Fund
Index-Linked Gilt Fund

Active
Passive
Passive
Passive
Passive

0.22
0.11
0.11
0.11
0.11

Minimal

Cash Fund

Active

0.11

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Lifestyle Options

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Purpose of a Lifestyle Strategy
The Lifestyle Strategy is based on the following thoughts:

1. Member is willing to take material risk when some way from retirement to achieve a
potentially higher return

2. Member is willing to accept high volatility when some way from retirement to achieve a

potentially higher return

3. Members wish to retire at their Normal Retirement Age
4. Members are concerned about volatility in the run up to retirement
5. Members’ benefits at retirement: 25% cash, 75% of your account used to provide pension
Therefore, ALL contributions – future contributions and transferred funds – are
invested in the same Lifestyle strategy

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Balanced Lifestyle Strategy (Default)

 Other lifestyle strategies available: Cautious, Adventurous, and
Global Equity
The Global Equity Lifestyle Strategy is similar to the default
option under the Equiniti Pension Plan but at a lower AMC



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Lifestyling may not always be appropriate

■ Will members be in the DC Plan at the agreed
transition point?
■ Retirement at different age to Scheme Normal
Retirement Age
■ Pension drawdown rather than annuity

■ Timing on investment switches
■ Range of self select funds offered will enable
members to set their own strategy
■ Lifestyle investment is a strategy for you to
consider, but this is not a recommendation

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Making your investment choices
■ Xafinity believes it is important that members make a considered choice
when it comes to setting their investment strategy.
■ This may involve consulting an independent financial adviser, though
many individuals find that the information available on the NatPen website
provides sufficient information and education to make an initial informed
choice.
Trust Investment Navigator
Modelling tools
The Investment Navigator is
accessible on the NatPen
Website.
It has been designed to help
provide you with a clearer view
of:
What kind of investor you are;
and
What kind of investment
strategy could help you reach
your long term goals

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Once your details have been uploaded
and you access the secure NatPen site,
you can model what your retirement
benefits might be.
The model will take account of your
contributions, your current fund value
and how long it is until your selected
retirement date.
The value of other DC benefits can also
be included.


Monitoring your investment choices
■ It is important to review the value of your investments annually and to
reconsider your investment strategy at least every three years.
■ Again, this may involve consulting an independent financial adviser.
■ Various information is available to you on the NatPen website:

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Member Communication

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Communications & Helpline
Member Helpline

Interactive web enabled systems*
 Provides access to:
□ Booklet and Investment Guide
□ Fund factsheets
□ Administration forms
□ Benefit Statements
□ News Updates
*Hard copies available
 Allows member to:
□ Undertake “what if” calculations
□ Obtain real time annuity quotations
□ Request fund switches
□ View statement of account over any time period
□ View contribution and transaction details
□ Update personal details

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Auto-enrolment – What impact will it have?
■ Staff are already automatically enrolled into the Equiniti Pension
■
■
■

■

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Plan from the day they join Equiniti. In future, new staff will be

contractually enrolled into NatPen.
The contributions to the EPP (and to NatPen) exceed the amounts
currently required to comply with the new statutory auto-enrolment
requirements.
Equiniti Group’s “Staging Date” under the new auto-enrolment
requirements is 1 September 2013.
As a result of the way the Equiniti’s pensions arrangements and
contribution structure were established, auto-enrolment will have a
low impact when compared to many employers’ pension
arrangements.
For practical purposes, the Company intends to postpone the
automatic enrolment of employees who have not yet joined the EPP
until 1 November 2013.


Options at Retirement

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Decision Tree

 Trustee-established service to





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help you review your benefit
options at retirement
Clear and simple language
Allows a member to
understand their options
Information not advice
Professional and bespoke


Retirement Support
■ Open market (whole of market)
■ Benefit Design support
□ Escalation / Spouse /
Guaranteed Period
□ Impaired life annuity
■ On-line access to model
different bases
□ Prior to retirement
□ At retirement
■ Free Member Helpline
■ Tailored report

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