Newsletter – December 2020
Welcome to the latest edition of the GDST Defined Benefit Pension Scheme (‘the Scheme’) newsletter, with developments and news on the Scheme together with other topical pension issues.
We very much welcome feedback on the issues covered in this newsletter and the opportunity to answer any of your questions. If you have questions about the Scheme or your benefits, or if you’d like more information on the articles in this newsletter, you can contact the Trustee by writing to us using the contact details on page 5.
Keeping us informed of changes in address
Please remember to tell us if your address changes. This will enable us to keep in touch with you with news of the Scheme and contact you when your benefits are due for payment.
The assets of the Scheme are held under trust. This provides security for members’ benefits by ensuring that they are entirely separate from those of the employers. The Scheme is managed by the Trustee who is responsible for ensuring that the Scheme is compliant with legislation, the Trust Deed governing the Scheme and the requirements of the Pensions Regulator.
Your Trustee Board
GDST Pension Trustees Limited is the Trustee of the Scheme and the current Trustee Directors are:
|Company-selected trustee directors||Member-nominated trustee directors (MNTD)|
|DM Boyd||J Gibson|
|BESTrustees, represented by Graham Wardle|
The law requires that members of pension schemes should be given the opportunity to nominate and select at least one-third of the trustees of their pension scheme. The role and responsibilities of all members of the Trustee is the same in every respect. As the term of office for both Jeremy Gibson and Nigel Pitt have expired we will be running a MNTD exercise as detailed in the separate papers enclosed with this newsletter.
Managing the Scheme, to ensure compliance with current pensions legislation so that members’ interests are best protected, is a complex task. To assist in this task, the Trustee calls upon the services of independent advisers, with whom the Trustee Directors work closely, to ensure that the Scheme runs smoothly.
Buck provides actuarial, investment, consultancy and secretarial services to the Trustee. Buck also undertakes the day-to-day administration of members’ benefits on behalf of the Trustee.
The Scheme Actuary, who advises on the funding of the Scheme, is M C Rawe FIA of Buck.
Ensors, who are independent from the auditor used by the Trust, audit the Scheme’s accounts on an annual basis. Pinsent Masons LLP is the Trustee’s legal advisers, and are independent from the legal adviser used by the Trust.
The Trustee produces a formal report and financial statements each year as at 31 August, including full details of all the money coming into and going out of the Scheme, membership movements over the year and the Plan’s investments. A copy is available upon request – see page x for contact details.
As at 31August 2020 there were 1,623 members (deferred 1,009 and pensioners 614) with assets totalling £119,090,565.
For members not in receipt of their pension from the Scheme, a summary of your options is shown on page 5.
The Trustee is responsible for making sure that the Scheme has sufficient money necessary to provide all the benefits promised to members. Every three years the Scheme Actuary checks the Scheme’s ongoing funding position in a formal exercise known as a triennial valuation. The latest valuation, as at 31 August 2019 is currently underway. In between the triennial valuations the Scheme Actuary performs annual approximate updates to monitor the funding position.
The Trustee shares this information with members in the form of a Summary Funding Statement. The next Summary Funding Statement will be circulated once the 31 August 2019 valuation has been completed.
The Trustee’s primary investment objective is to invest in a range of assets of appropriate security and liquidity that will generate sufficient income and growth to meet the future benefit payments to be made by the Scheme combined with any payments made by the Employer. The Trustee has a Statement of Investment Principles (SIP) which explains how we invest the Scheme’s money and the SIP is available on the GDST web site [insert web address]
COVID-19: Coronavirus update
The Trustee would like to reassure you that have been closely monitoring the Scheme during the COVID-19 pandemic. As Trustees we agree a funding and investment strategy with the Employer, working with the Scheme Actuary and and our investment advises to manage the Scheme’s investments. We are regularly monitoring the funding position of the Plan and the performance of the investments.
As a member of a defined benefit scheme, your benefits are not directly linked to the investments that the Schemes hold, so even if the investment markets suffer big falls, subject to the continual support of the Employer, the benefits that you are entitled to (or are receiving as a pensioner) will not change. In any event, pensions are long-term investments and markets always go up and down; sometimes they are very volatile, for instance, during the 2008 financial crisis but subsequently values recovered and then continued to grow.
The Trustee remains reassured by the support from the Employers and they are committed to contributing to the Schemes so that your benefits can be met.
In the unlikely event that the Employers could not continue to support the Schemes or were to be insolvent, the Pension Protection Fund might be able to take over the Schemes and pay compensation to members.
Administration update on C19
If you are a pensioner (or are due to take your benefits in the next few months), be assured that our pension administration providers, Buck, has taken all necessary actions in conjunction with the UK Government guidance, to ensure that your pension can be paid as usual.
Following the Government’s request, Buck’s administrators have been successfully working from home. Buck have reassured us that his remote working practice has no material impact on the timescale for responding to your requests, although they are prioritising benefit payments.
You may contact our administrators by phone, email or letter. We encourage phone or email for speed, but any paper requests will be picked up and dealt with in the normal way.
Protect yourself against scammers
If you are considering taking any action in reaction to the impact of COVID-19, such as transferring your pension savings out of the Scheme, you should consult a financial adviser regulated by the Financial Conduct Authority.
Note that individuals in receipt of a pension cannot transfer out of the Plan. Incidents where people are tricked by scammers into handing over heir pension savings are on the increase since the introduction of pension flexibilities in 2015. The pension regulator and the Financial Conduct Authority (FCA) urge members to be vigilant when receiving unexpected offers about their pension savings and to check that is if from a reputable and reliable source. The Trustees are pleased to note that there have been no reported scams from the Scheme.
Further information is available on the Pension Regulator’s website: www.thepensionsregulator.gov.uk
Equalisation of Guaranteed Minimum Pensions (GMPs)
A court case in 2018 (involving Lloyds Banking Group) may impact some of the benefits provided by the Scheme.
The case requires certain pensions built up between 1990 and 1997 – known as “Guaranteed Minimum Pensions” or “GMPs” – should be made equal between men and women. This process is known as “GMP equalisation”.
The Trustee of the Scheme is considering how best to comply with these requirements, but it is a complex process (including an ongoing exercise to reconcile GMP amounts with those held on HMRC records).
The Trustee will update members when a course of action has been agreed. In the meantime, you should note that GMP equalisation has been accounted for in any transfer value illustration requested from the Scheme.
Please note that that not all members of the Scheme will be affected by this, and that any changes to pension amounts are likely to be small.
State Pension age
The basic state pension and the additional State Pension have been replaced by a new single-tier State pension. Further information can be found on the Department for Work and Pensions’ website www.gov.uk/government/organisations/department-for-work-pensions where you will be able to find out your State Pension Age, request statement of what you might expect to receive and find out how you can claim your State Pension.
Risk management and employer covenant
A key responsibility for the Trustees is to ensure that members receive their promised benefits. An integrated risk management framework, which brings together the identified risks the Scheme and the Employers face has been established. Ultimately the Employer underwrites investment and funding risks so it’s important that the Trustee monitors this and that the Employers work with the Trustee to act when material risks arise.
The Trustee continues to work closely with the Employers and remain confident in both the ability and willingness of the Employers to support the obligations of the Scheme over the long term.
Expression of Wish forms
Your Expression of Wish form guides the Trustee as to who you would like to receive any lump sum benefit payable on your death. Lump sum benefits are payable if you die before you start receiving your benefits from the Scheme or if you die within five years of starting to receive your benefits on retirement. In order to ensure the lump sum is paid without incurring inheritance tax, the decision as to who should receive the benefit on your death is made by the Trustee. However, to help the Trustee with this decision, please ensure your Expression of Wish form is completed and up to date with details of whom you would like to receive any lump sum benefit payable.
You may indicate any number of individual dependants or beneficiaries on the form. If your personal circumstances change and you want to nominate different individuals, this can easily be done by completing a new form. If you are unsure about an entry on your form or would like to complete a new one, please write to the address at the end of this newsletter.
Please note: it is important that your Expression of Wish form is updated as your circumstances change.
Further information and help
Help with pension problems
The Trustees make every effort to ensure the Scheme is well run. Any problems that do arise can generally be resolved informally. If, however this proves not to be the case you are able to use the Scheme’s internal dispute resolution procedure. Details of the procedure are available by writing to the address at the end of this newsletter.
Get in touch with us
If you have any further questions or wish to update us of any changes to your details, such as your address or bank account information (please note, your updated information must be provided in writing) please use the following contact details.
|GDST Defined Benefit Pension Scheme|
PO Box 323
Telephone: 01473 293 075
Graham Wardle, Chair of GDST Pension Trustees Limited
What options do I have for taking my Defined Benefit (DB) pension?
|Am I eligible?|
|Normal Retirement||A pension payable from your Normal Retirement Date (NRD).||This is your default option. An illustration of your pension benefits will be sent to you before your Normal Retirement Date.|
|Early Retirement||A pension payable before you reach your NRD. The pension will be lower than at your NRD to allow for the fact that it will be payable for longer.||If you are over age 55 you may take early retirement. In some cases this may be subject to agreement by the Trustee/Employer. Ill-health retirement earlier than age 55 may also be possible.|
|A pension payable after you reach your NRD. The pension will be higher than at your NRD allowing for the fact that it will be payable for a shorter period.||Yes – though some pension schemes may impose limitations.|
|Tax-Free Lump Sum||A tax-free lump sum can be payable by exchanging some of your pension for a lump sum.||Options to exchange pension for a lump sum will be included in your retirement illustration. This is usually 25% of the value of your pension.|
|Small Lump Sum||A one-off lump sum payment, where the benefits under the pension scheme are valued at less than £10,000.||Minimum age 55. Option includes pensions already in payment. Amount paid has to be less than £10,000.|
|A one-off lump sum payment, where all your pension benefits are valued at less than £30,000.||Minimum age 55. Benefits across all your registered pension arrangements must have a value not exceeding £30,000.|
|Transfer Value (CETV)||A cash equivalent transfer value representing the value of all your pension benefits within the pension scheme. You will have no further benefits remaining in the pension scheme if you accept a transfer value.||Members who are more than one year away from their NRD have a statutory right to transfer their preserved DB benefits out of the pension scheme. If the Transfer Value is over £30,000, you must take appropriate financial advice. The Trustees may permit non-statutory transfers for members within 12 months of NRD (or having passed NRD). It is not available once the pension is in payment.|
You can get useful information about pensions and retirement planning from the following websites:
|For government initiatives and information about retirement and pensions. You can also get help finding pension contact details for previous pension schemes you have lost contact with, through the Pension Tracing Service, and find out information about what State benefits you might receive.|
|www.fca.org.uk/register||Use this site to confirm that an adviser or firm is registered and appropriately authorised by the Financial Conduct Authority to give financial advice on pensions.|
|www.fca.org.uk/scamsmart||Use this site, also provided by the Financial Conduct Authority, to find out about pension scams, how to spot the warning signs and how to protect yourself from them.|
|www.pensions-ombudsman.org.uk||The Pensions Ombudsman deals with complaints and disputes which concern the administration and management of occupational and personal pension schemes.|
|www.thepensionsregulator.gov.uk||The Pensions Regulator may intervene in the running of pension schemes where trustees, managers, employers or professional advisers have failed in their duties.|
|www.pensionwise.gov.uk||Pension Wise provides guidance to people aged 50 or over about their defined contribution pension options. The main benefits under the Scheme are defined benefits and are not covered by Pension Wise, but you may find the service useful in respect of any AVC funds or other pension arrangements you may have.|
|www.moneyandpensionsservice.org.uk||The Money and Pensions Service has recently been set up to bring together the Money Advice Service, The Pensions Advisory Service and Pension Wise into one single organisation to help people get free and impartial guidance on pensions, money and debt. For the time being you can still visit these consumer websites as described above|