Welcome [yourplan.royallondon.com] · Synectics Pension Plan Scottish Life have been chosen to provide one Group pension plan which meets the new legal requirements The new Synectics

Welcome Pension Road Show - Existing Group Pension Scheme Members

PENSION ROADSHOW 1

An introduction

Synectics has put a plan in place to ensure we meet the legal requirements and communicate this

with you appropriately:

• Synectics Board commissioned a full market review

• The review was undertaken by an independent pension adviser, LEBC Group Ltd.

• A formal communication programme has been developed – the pension road show is just one

element of this programme

You will have received an email from Group Communications highlighting the changes in

Government legislation to get people saving for their future.

PENSION ROADSHOW 2

The purpose of the road show

The format :

• 30 minute presentations plus 15mins for Q&A

• Four presentations a day:

o Two presentations for all those employees not currently in a pension scheme

o Two for those already in an existing pension scheme

• Opportunity to book a 10min 1-2-1 session with LEBC, in the pension clinic

• All UK employees are encouraged to attend a local presentation, but the information is also

available via a dedicated Synectics Pension website (details to follow)

• Further information will be communicated as appropriate between Nov 13 & April 14

To keep you informed - we will share with you the changes in the Pensions Legislation,

how this impacts on you, introduce the new Synectics pension plan and explain what you need to do next.

PENSION ROADSHOW 3

Impartial financial advice.

Improvements to your pension

Tim Ross and Greg Nicholls

Senior Consultants LEBC Group Ltd

Synectics Pension Plan Today’s Agenda

● Changes in the Pensions Legislation

● How this impacts on you

● New pension plan

● What you need to do

Synectics Pension Plan Changes in Pensions Legislation

● State Pension Benefits

● State Pension Age

● Auto Enrolment

Synectics Pension Plan


Current

● Flat rate of £110.15 per week

● 30 years to qualify

● Plus SERPS/S2P

New

● A flat rate State Pension of approx £144 per week is proposed from April 2016

● IS THIS ENOUGH TO SUSTAIN A REASONABLE STANDARD OF LIVING?

State Pension Benefits


● State Pension Age 65 – Females phased in

Current Pension Law

● 67 between 2034 and 2036

● 68 between 2044 and 2046

It is proposed these Retirement ages are effected earlier

State Pension Age


● Synectics group will need to auto enrol employees from January 2014

● Auto enrolment requires phased minimum contribution rates over 4 years:

Phase 1 2014-2017 1% employee 1% employer

Phase 2 2017-2018 3% employee 2% employer

Phase 3 2018 5% employee 3% employer

● On Band Earnings (£5668 – £41450 2013/14)

● Less Tax Relief

Auto Enrolment


● Minimum 3% employee and 3% employer

● Employer matching contribution at differing levels on

the various pension schemes

● You may need to increase your contribution in the future

Current Schemes Contribution Basis


● You will be auto-enrolled on your current contribution basis or the statutory minimum if you are not a current member

● You will be given one month to increase or decrease your contribution rate

● There is no limit on the employee level of contribution

● Employee contributions will be matched by the employer up to 5% of your Basic Salary

● You have the option to change your contribution level every January

How this impacts on you


● Scottish Life have been chosen to provide one Group pension plan which meets the new legal requirements

● The new Synectics Pension Plan will replace all the existing schemes

● The Annual management charge will reduce from 1% to 0.50% of your fund value per annum

● Your existing funds can be moved without penalty

● No commission is charged, LEBC’s fees are paid by Synectics

The Synectics Pension Plan

Example £100 per month retiring at 65 earning 5% pa return

Age at Joining Fund at 65

0.5% 1.00% 25 131,000 115,000 35 74,800 68,200 45 38,500 36,300 55 15,100 14,600


What is the impact of charges on your fund?


● Established in 1881, owned by Royal London largest UK Mutual

● Now over 3.1million customers

● Over £52.2 billion under management

● Low annual management charges

● Group pension plan website – access information and manage personal pension

● Reputation in the market for governance and performance standards

Why Scottish Life?

• Money Marketing

Company of the Year;

and

• Best Pension Provider

2012

• Financial Adviser Best for

Service; and

• 5 star Award for

Excellent Service 2011

Why Scottish Life?


Personal Policy

Contributions +

Tax relief +

Potential investment growth

Synectics

You

At retirement =

Lump sum + income (options)

Example – You and Synectics each pay £100 per month

Basic taxpayer (20%)

● £80 taken from pay

● £20 added by HMRC

● £200 paid into your pension plan

∴ Therefore you pay £80 and £200 is invested

Higher rate taxpayer (40%)

● £80 taken from pay

● £20 added by HMRC

● £20 additional tax refund (coding or SA)

● £200 paid into your pension plan

∴ Therefore you pay £60 and £200 is invested

How does the tax relief system work?



● You choose the fund or funds to invest your £ contributions into

● If you do not choose a fund, your contributions will be invested in a default fund

● The default fund is the Balanced Lifestyle Fund, which is Moderately cautious/ balanced in terms of risk and return on investment

● There are 5 Lifestyle Funds to choose from to help you decide how much risk you want to take, which will vary the % you invest in these:

Minimal risk: Cash

Low risk: UK Gilt, Fixed interest securities

Low-Medium risk: Cautious managed funds

Medium risk: Balanced managed funds, commercial property

Medium-High risk: UK equity, stock market managed funds

High risk: Specialist equity funds, Far East, emerging markets

How is Your Money Invested?

Lifestyle

• Programmed switching to Cash / Fixed Interest Funds

• Activates 15 years from retirement age

0%

25%

50%

75%

100%

20+ 15 12 10 5 0

Cash

Scottish Life Governed Portfolio


Fixed Interest


How will Scottish Life look after your money?

● An independent Investment Committee meets quarterly

● They look at how the funds have performed

● They change things if they feel it necessary

● They issue reports to members. These will be available on the Synectics Pension Plan website


How has the default fund performed?

Governed Portfolio 4 (default fund - Balanced Lifestyle Fund)

30.9.12 30.9.11 30.9.10 30.9.09

to to to to 30.9.13 30.9.12 30.9.11 30.9.10 % Chg % Chg % Chg % Chg

Actual 13.94 13.91 -4.71 9.74 Benchmark 13.00 12.90 -0.04 11.98


What happens if I decide not to join?

● You will be automatically enrolled on your current contribution

● You can opt out by contacting Scottish Life once you have been enrolled

● The ‘opt out’ window is open for one month

● You will be automatically re-enrolled every 3 years

● You can choose to opt back in once every 12 months

You will be advised of 3 or 4 options:

1. Leave your fund where it is

2. Continue paying into it

3. Transfer (without penalty) to new plan

4. Draw your benefits early (without penalty) providing you are 55 or over

What happens if you leave?


● Your funds will be paid to your beneficiaries

● Make sure you complete a nomination form for your beneficiaries

● No tax – under current legislation

● No penalty

What happens if you die before reaching retirement?


● Details will be sent to you in February/March

● You may wish to take independent financial advice

● Neither the Group nor its employees can provide or give advice on this

What do I need to do if I want to transfer my existing funds to Scottish Life?


What happens next?

Today One to Ones

January Joining Notices Issued

January One month to review your contribution level or opt out

February/March Transfer options notified


ANY QUESTIONS?

For further information in relation to this presentation please:

• Make an appointment to see Tim Ross or Greg Nicholls

from LEBC today • Check the Q&As and information on the website

www.scottishlife.co.uk/synectics • Email questions to Group Communication

[email protected]


This presentation does not provide individual tailored advice and is for general guidance only. We recommend that individuals seek independent professional advice of a qualified adviser. This presentation represents our understanding of law and HMRC practice as at the date of presentation

IMPORTANT

● A Pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation

● Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs, from taxation are subject to change

● Tax treatment is based on individual circumstances and may be subject to change


Welcome [yourplan.royallondon.com] · Synectics Pension Plan Scottish Life have been chosen to provide one Group pension plan which meets the new legal requirements The new Synectics

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