THOMSON REUTERS (UK) RETIREMENT PLAN A GUIDE TO YOUR PENSION

Transcription

1 THOMSON REUTERS (UK) RETIREMENT PLAN A GUIDE TO YOUR PENSION.

2 SPECIAL TERMS WE HAVE TRIED TO KEEP YOUR GUIDE AS STRAIGHTFORWARD AS POSSIBLE, BUT THERE ARE SOME WORDS THAT HAVE A SPECIAL MEANING. WE HAVE HIGHLIGHTED THEM IN BOLD WHERE THEY APPEAR IN THE GUIDE AND WE EXPLAIN WHAT THEY MEAN BELOW. ANNUAL ALLOWANCE This is the total amount of pension benefits that HM Revenue & Customs allows members to build up each year without having to pay a tax charge. (Please see page 19 for more details.) COMPANY This is Thomson Reuters, or a company in the Thomson Reuters Group which takes part in Thomson Reuters (UK) Retirement Plan (TRRP). INDIVIDUAL PENSION ACCOUNT This is the name of the individual account that the trustees set up in your name when you join TRRP. Your account includes: all pension contributions (including those made by you and your employer) for your membership of TRRP; any additional voluntary contributions (AVCs) that you choose to pay; and the investment returns (after expenses) that these contributions earn. LIFETIME ALLOWANCE This is the overall amount of pension benefits that HM Revenue & Customs allows members to have at retirement without having to pay a special tax charge. (Please see page 19 for more details.) PENSION ADJUSTMENT The Pension Adjustment is a way of making contributions to your individual pension account that reduces the amount of National Insurance that you pay. This gives you an opportunity to increase your take-home pay and at the same time brings costs down for the company. (Please see page 6 for more details.) QUALIFYING SERVICE This is the length of time you have been an active member of TRRP. It includes any pensionable service under a previous employer s scheme that you have transferred into TRRP. REFERENCE SALARY This is your basic salary before the Pension Adjustment has been taken off. The company uses this figure to work out its pension contributions, other company benefits (including bonuses, overtime, maternity pay, sick pay, share plans and share option plans) and for any salary reviews. WHERE TO LOOK NEXT FIRST THINGS FIRST PAGE 4 How to make the most of your membership MAKING CONTRIBUTIONS PAGE 6 How contributions are credited to your individual pension account INVESTING FOR YOUR FUTURE PAGE 9 Make the right choices for your situation REAPING THE REWARDS PAGE 13 Benefits for you PROVIDING PROTECTION PAGE 15 Benefits for the people who matter to you MOVING ON PAGE 16 Your choices if you leave TRRP COMPLETING THE PICTURE PAGE 18 Background information about TRRP YOUR INVESTMENT OPTIONS PAGE 25 Thomson Reuters (UK) Retirement Plan has been set up under trust and is managed by a board of trustees. By law, the trustees must protect the interests of members and pensioners at all times. The trust deed and rules is the legal document that governs the way TRRP works and sets out your rights to benefits. If there is any conflict between this guide and the trust deed and rules, the trustees will follow the trust deed and rules. November TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

3 BUILDING FOR THE BEST POSSIBLE FUTURE WHEN IT COMES TO PLANNING FOR OUR FINANCIAL FUTURES, WE RE ALL RESPONSIBLE FOR MAKING SURE WE HAVE AN INCOME WE CAN RELY ON ONE THAT WILL ALLOW US TO GET THE MOST OUT OF THE YEARS AHEAD. It takes time and effort to build up a good pension. However, as a member of Thomson Reuters (UK) Retirement Plan (TRRP), you have the reassurance of knowing that you have the company s support as you build for the future. Thomson Reuters provides TRRP so that you have the opportunity to build up a good level of income for your retirement. TRRP also provides valuable financial benefits for you and your dependants if the unexpected should happen in the meantime. This guide explains how to make the most of being a member. SUMMARY Your membership of TRRP is an important benefit of working for the company. When you join TRRP, the trustees set up an individual pension account in your name. During your working life, the aim is that you build up the value of your account. This happens through the contributions that are credited to your account and through the investment returns that these contributions earn. Through a process called the Pension Adjustment, the company contributes 8% or 11% of your reference salary to your account. You can increase the amount going into your account by paying additional voluntary contributions. (See Making contributions on page 6.) You decide how you want to invest the contributions that are credited to your account. The investment decisions you make will affect the money that builds up in your account. (See Investing for your future on page 9.) When the time is right, you will use your account to buy a package of retirement benefits. (See Reaping the rewards on page 13.) This will include a pension for you for life. You will be able to take some of your account as a cash sum, which is currently paid free of UK tax. You can also choose to provide a pension for your husband, wife or other dependant which they will receive after you die. While we hope it s never needed, TRRP will provide some financial protection for your dependants if you die before you retire. (See Providing protection on page 15.) 3

4 FIRST THING FIRST WHAT YOU NEED TO DO YOU DON'T NEED TO DO ANYTHING TO JOIN TRRP All eligible employees are automatically enrolled in TRRP when they join the company. (This currently includes all UK employees who are paid through the company payroll, either on a fixed or term contract.) You may need to provide evidence of your health to be eligible for certain benefits. We will tell you if we need you to do this. YOU NEED TO CONSIDER WHETHER TO PAY ADDITIONAL CONTRIBUTIONS OR MAKE INVESTMENT CHOICES Although joining is automatic, you may wish to tell us how you want to invest the contributions that are credited to your individual pension account. (See Investing for your future on page 9.) Please note that if you do not complete an investment choices form, the contributions that are credited to your account will be invested in the Lifestyle option, your selected retirement date will be your 60th birthday and your account will start to switch out of equity investments 10 years before this date. You can also choose to pay additional voluntary contributions (AVCs) which you would need to do through the Thomson Reuters Pension Portal available through the Hub. You can update the information in your expression of wish form as often as you need to. You should have received copies of these forms with this guide. Extra forms are available on the Hub or from Thomson Reuters Member Services Centre. OPTING OUT The company provides TRRP to help employees prepare for the best possible financial future. However, membership is voluntary and you can choose to opt out after you have been auto enrolled in TRRP through the Pensions Portal. If you opt out within one month of joining TRRP you will have any contributions that have been deducted from you refunded in the following month s payroll. You can also choose to leave TRRP at any time. This is called opting out. If you opt out, no more contributions will be credited to your individual pension account. If you think you want to opt out, please consider the benefits that you will be giving up and the effect that this might have on you and the people that matter to you. If you opt out, you will be able to join TRRP at a later date. You will also be re-enrolled into TRRP approximately every three years. YOU NEED TO FILL IN AND RETURN AN EXPRESSION OF WISH FORM This form tells the trustees who you would like to receive any cash sum that will be paid if you die while you are a member of TRRP (see page 15). 4 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

5 WHERE TO FIND OUT MORE IF YOU WANT MORE INFORMATION ABOUT TRRP, AVCS OR YOUR BENEFITS Please contact Thomson Reuters Member Services Centre. Write to: Thomson Reuters Member Services Centre Capita Hartshead House 2 Cutlers Gate SHEFFIELD S4 7TL United Kingdom If you are contacting Thomson Reuters Member Services Centre from the UK: Phone Fax If you are contacting Thomson Reuters Member Services Centre from overseas: Phone Fax thomsonreuterspensions@capita.co.uk GETTING ADVICE Please remember that the law does not allow Thomson Reuters Member Services Centre or Thomson Reuters employees to give you advice about what might be best for your personal situation. If you want some advice, you should contact an authorised independent financial adviser. The Financial Services Authority (FSA) has useful information about finding financial advice. Visit their website at or phone their consumer helpline on An organisation called IFA Promotion can provide contact details for financial advisers in your local area. Visit their website at Before you take advice from anyone, you should check that they are qualified and authorised to advise you. As no commission is paid from TRRP, you should ask how much they will charge you for their advice. IF YOU WANT MORE INFORMATION ABOUT YOUR INVESTMENT OPTIONS Please visit the Fidelity member microsite for TRRP. The address is MANAGE YOUR INDIVIDUAL PENSION ACCOUNT ONLINE As a member of TRRP, you can manage your individual pension account online using Hartlink. You can use Hartlink to: check your membership details; check the value of your account; change the way you invest your account; change your AVCs; and get an estimate of the pension you might receive when you retire. Hartlink is available 24 hours a day, seven days a week. The address is This service is only available after you have joined TRRP and Capita have received your membership information. 5

6 MAKING CONTRIBUTIONS DURING YOUR WORKING LIFE, THE AIM IS THAT YOU BUILD UP THE VALUE OF YOUR INDIVIDUAL PENSION ACCOUNT. THIS HAPPENS THROUGH THE CONTRIBUTIONS THAT ARE CREDITED TO YOUR ACCOUNT (WHICH WE EXPLAIN IN THIS SECTION), AND THE WAY YOU CHOOSE TO INVEST THEM (WHICH WE EXPLAIN IN THE NEXT SECTION, WHICH STARTS ON PAGE 9). NORMAL CONTRIBUTIONS New TRRP joiners will automatically be put into the default contribution rates of 3% employee and 5% employer. You have the option to increase to a 4% employee contribution and a 7% employer contribution. You will be able to change your contribution rates subsequently in any month. Therefore, the company contributes 8% or 11% of your reference salary to your account once a month if you are taking part in the Pension Adjustment. This is made up of a core company contribution of 5% or 7% with a respective further contribution of 3% or 4% for the member contribution level, which is paid through the Pension Adjustment. The company also meets all of TRRP s administration costs and the cost of providing you with life cover (see page 15). HOW THE PENSION ADJUSTMENT WORKS The real cost to you is less than the employee rates of 3% or 4%, as you currently benefit from tax relief on this amount at your highest rate of tax. However, through the Pension Adjustment you don t actually pay contributions direct to your account. Here s what happens. When you join TRRP, your gross contractual pay (before deductions) goes down by an amount equal to 3% or 4% of your reference salary. (This amount is the Pension Adjustment.) The company pays a contribution of the same amount straight into your account. This is on top of its core contribution. This process reduces the amount of National Insurance (NI) that you pay, because you only pay NI on your earnings after the Pension Adjustment has been taken off, rather than before... 6 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

7 IF YOU CHOOSE NOT TO TAKE PART IN THE PENSION ADJUSTMENT: The Pension Adjustment is a voluntary arrangement and you can choose to opt out. If this is something you think you want to do, you will need to do so through the Pensions Portal. If you opt out, you will pay full pension contributions and full NI contributions direct out of your reference salary. If you previously took part in the Pension Adjustment, your take-home pay may go down because of the change to your NI contributions. IF YOU ARE NOT ELIGIBLE TO TAKE PART IN THE PENSION ADJUSTMENT Most members will benefit from taking part in the Pension Adjustment. However, there will be some members for whom this will not be the case. As a result, the company will suspend the Pension Adjustment for members in the following categories. Members on international assignment. Members who start receiving long-term incapacity benefit from the company. Members whose gross contractual pay falls below the earnings threshold ( 7,072 for the 2011/2012 tax year) and who are not on approved unpaid leave. Members employed in the Republic of Ireland. Members who have been told that the Pension Adjustment does not apply at their level of membership. If you meet one of these conditions, the company will apply an auto-exit from the Pension Adjustment for you. This means that the Pension Adjustment stops for the time being. If this happens, you will pay full pension contributions and full NI contributions (if this applies) direct from your reference salary. If your circumstances change so that the auto-exit no longer applies, the Pension Adjustment will automatically start again. Please remember that the money in your account is entirely separate from the company s assets and cannot be lent to, or used by, the company in any way. 7

8 SAVING MORE As a member of TRRP, you know you are building up valuable benefits. You also have the opportunity to build up extra benefits by paying additional voluntary contributions (AVCs). AVCs are a straightforward, tax-efficient and cost-effective way to increase your benefits. You might find them useful if: you think you might need more money to pay for the lifestyle you want when you retire; you joined TRRP late on in your career and so don t have long to build up the money in your account; or you want to provide even greater financial security for the people who matter to you if you die. There are a number of advantages of paying AVCs. YOU CHOOSE THE LEVEL OF AVCS YOU WANT TO PAY HM Revenue & Customs currently allows you to pay up to 100% of your UK earnings (after the Pension Adjustment) as pension contributions. However, the value of any benefits or contributions above the annual allowance each year does not receive tax relief. YOU CHOOSE HOW YOU PAY YOUR AVCS You can pay AVCs regularly each month, or you can pay a one-off amount which is useful if you receive bonuses, commission or overtime. YOU CHOOSE HOW YOU WANT TO INVEST YOUR AVCS Your AVCs are credited to your account as well as the normal contributions that it receives. You can invest your AVCs in the same way that you invest the normal contributions that are credited to your account, or you can choose different investment options. It s up to you. (See Investing for your future on page 9.) IF YOUR MAIN CONTRIBUTIONS ARE PAYABLE THROUGH THE PENSIONS ADJUSTMENT THEN YOUR AVCS WILL BE PAYABLE IN THE SAME MANNER Remember that there are many ways to save for your future, other than through TRRP. For example, current pension law gives you flexibility over the number of pension arrangements that you can contribute to at any one time. You may also want to consider options such as individual savings accounts, bonds and National Savings Certificates. If you need advice about what might be best for you, you may find it helpful to speak to an independent financial adviser. (See page 5.) TRANSFERRING BENEFITS IN You may have built up benefits in a previous scheme, for example a previous employer s scheme or a stakeholder or personal pension. If the company and the trustees agree, you may be able to transfer these into TRRP. If you want to know more about this option, please contact Thomson Reuters Member Services Centre... 8 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

9 INVESTING FOR YOUR FUTURE THE MONEY THAT BUILDS UP IN YOUR INDIVIDUAL PENSION ACCOUNT DEPENDS NOT ONLY ON THE CONTRIBUTIONS THAT ARE CREDITED TO YOUR ACCOUNT, BUT ALSO HOW YOU CHOOSE TO INVEST THEM. KNOW WHAT YOU RE AIMING FOR Choosing an investment approach is down to you. It needs to suit your individual circumstances and the aims you have in life. As a result, your approach may stay the same, or it may change over time. Think about the target you are aiming for and balance this against the level and type of risk that is acceptable to you. Remember that the balance between these two is likely to change at different stages during your working life. BE AWARE OF THE RISKS An important factor which will affect your investment decisions is your attitude to risk. This is personal to you, because everyone has a different idea about what is an acceptable level of risk. All investment involves some risk. You need to balance this risk over the long-term with the target that you have set for your pensions saving. There are four types of risk you need to think about. Each of these risks will be important at some stage during your working life. If you want to protect yourself against a particular risk, you will need to know when and how it might affect you. This way, you can consider investing your account in a way that will help keep the risk as small as possible. Missed opportunity risk is the risk that being too cautious in your investment decisions will result in an account that will not provide you with a suitable pension. Inflation risk is the risk that the value and buying power of your account will not keep up with economic factors like inflation. This is the main investment risk your pensions saving faces during the early to middle part of your working life. Conversion risk is the risk that the buying power of your account will fall if the cost of buying a pension changes as you get closer to retirement. Capital risk is the risk that uncertain investment returns close to retirement might affect the value of the cash sum you can take from your account. Liquidity risk is the risk that you will not be able to disinvest quickly from an investment should the need for instant access to cash arise. This is particularly relevant for investment in the property fund since properties are more difficult to buy or sell compared to other asset classes (e.g. equities). 9

10 MANAGING RISK Different types of investment can help protect you against the different risks that can affect you during your working life. INVESTING IN EQUITIES CAN HELP PROTECT YOU AGAINST MISSED OPPORTUNITY RISK In the past, higher-risk investments such as equities (shares) have performed better than lower-risk investments such as bonds and cash. Although equities may produce better returns, these are not guaranteed. INVESTING IN EQUITIES CAN HELP PROTECT YOU AGAINST INFLATION RISK. Equities are a type of investment that is expected to benefit from general economic growth. While the value of equities can go down as well as up in the short term, history shows that they have provided better long-term returns than other types of investment such as gilts, bonds or cash. These returns have often been ahead of price inflation, but there is no guarantee that equities will provide better returns in future. INVESTING IN GILTS AND BONDS CAN HELP PROTECT YOU AGAINST CONVERSION RISK Gilts and bonds do not have the same long-term growth potential as equities. When you retire, you use the money that has built up in your account to buy a pension from an insurance company. The cost of buying a pension is generally linked to the performance of the gilts and bonds markets. As a result, investing more of your account in gilts and bonds as you get closer to retirement can help protect you from sudden changes in the cost of buying a pension. INVESTING IN CASH CAN HELP PROTECT YOU AGAINST CAPITAL RISK In the past, cash has provided lower returns than other types of investment, often falling behind price inflation. However, it has the advantage of providing stability and security over the short-term. As a result, investing some of your account in cash as you get close to retirement can protect the value of any cash sum you might be expecting to take from your account. If you think you need to speak to someone about the investment approach that might be best for you, consider getting in touch with an independent financial adviser (see page 5) TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

11 UNDERSTAND YOUR INVESTMENT OPTIONS The trustees work closely with their independent advisers to provide you with an appropriate range of investment options. This includes a selection of individual investment funds (the Freestyle option) and two options which manage your account for you (Lifestyle). You can invest in any combination of Freestyle funds or you can invest in one of the two Lifestyle options. You cannot do both. FREESTYLE FUNDS In Freestyle, you choose how you want to invest the contributions that are paid to your account. The trustees provide a range of funds that invest in equities, gilts, bonds, cash and property. You can also choose different management styles, as the Freestyle range includes actively-managed funds and passively-managed funds. These investment options are available through a fund-management platform that we have appointed Fidelity to provide. This allows TRRP to give members access to a wider range of funds managed by different investment managers. It also provides TRRP with a more efficient investment administration process. This is because the trustees pass members instructions to Fidelity, who will then deal with the individual fund managers on the trustees behalf. ACTIVE FUNDS The managers of an active fund use their experience and research resources to select the particular investments that they believe will produce better returns than the market as a whole. Active investment management offers the opportunity to outperform the market, but there is also a risk they will do worse if they make the wrong investment decisions. The fees for active managers are usually higher than those paid to passive managers as passive managers don t have to spend time and money researching the prospects of individual companies. PASSIVE FUNDS A passive investment manager does not make investment decisions about the individual assets, but instead invests in line with market indexes. As a result, investment returns are broadly in line with the market indexes being tracked, and the investment management charges for passive funds are lower than those for funds which are managed actively. Although you would not expect a passive manager to outperform their index, there is very little risk that they will underperform against it. The trustees monitor the performance of all of the funds and can make changes to the funds if the investment advisers suggest performance may be improved. You will always be told when a change takes place. The attachment 'Your investment options' on page 25 gives more details of the funds that are currently available. You can also see details of all funds on the Fidelity microsite for TRRP (see page 5). 11

12 LIFESTYLE OPTIONS Lifestyle is an investment option that manages your account for you. In Lifestyle, you do not make day-to-day investment decisions. The money in your account is invested for you in a mix of funds that automatically varies with your age. The aim of this approach is to keep to a minimum the various investment risks that might affect your pensions saving during your working life (see page 9). HOW LIFESTYLE WORKS At the outset, you need to let Thomson Reuters Member Services Centre know the age at which you would like to retire. This is called your selected retirement age. (The company will not record or use this information. It will only be kept on your records at Thomson Reuters Member Services Centre.) In Lifestyle, your account will primarily be invested in equities to begin with. The aim of this approach is to benefit from the possible growth that this type of investment might provide. As you get closer to your selected retirement age, your account starts to switch out of equities to take advantage of the greater stability expected from bonds and cash. (There are more details about these funds on page 25.) There are two Lifestyle options. There is: a five-year Lifestyle option, where the switching process starts five years before your selected retirement age; and a 10-year Lifestyle option, where the switching process starts 10 years before your selected retirement age. If there is any change to your selected retirement age, you must tell Thomson Reuters Member Services Centre as soon as possible. This is because the Lifestyle investment strategies are based on this date and any variation may affect the value of your account. See Page 25 for more information on the funds used in Lifestyle. WATCH YOUR ACCOUNT BUILD UP You can check the value of your individual pension account at any time by logging onto Hartlink (see page 5). You can also use Hartlink to get an estimate of the pension your account might give you. Thomson Reuters Member Services Centre will also send you a benefit statement once a year. This will show the contributions that have been credited to your account, together with the value of the account at the date the statement was prepared. Remember that the value of your entitlement under TRRP is the value of your account rather than the investments themselves, which are held in the name of the trustees. HOW TO MAKE CHANGES You can change the way you invest at any time. If you have considered your options carefully and have decided you want to change the way you invest, please log onto Hartlink and follow the on-screen instructions, or contact Thomson Reuters Member Services Centre direct. Thomson Reuters Member Services Centre will make the changes you want as quickly as possible. However, they, the trustees and the company cannot be held responsible for the effects of any movements that take place on the financial markets before the changes are made. Please note that your investment funds follow a swinging single price, which means you will not have to pay any charges when you switch between them. However, sometimes when there are a large number of purchases or sales, the costs involved in altering the assets of the fund (for example, stockbroker commission) may have a negative effect on the shares held by existing investors. To help protect existing investors, the buyer and seller will pay a charge which is paid direct into the fund. The swinging system adjusts the price to include transaction costs, instead of a separate charge TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

13 REAPING THE REWARDS WHEN THE TIME IS RIGHT FOR YOU, YOU USE YOUR INDIVIDUAL PENSION ACCOUNT TO BUY A PACKAGE OF BENEFITS. WHEN TO CALL IT A DAY RETIRING AT NORMAL RETIREMENT AGE The normal retirement age in TRRP is 60. However, this does not mean that you have to retire at age 60. You have a number of options when it comes to drawing your TRRP benefits (see below). RETIRING EARLY If you joined TRRP on or before 5 April 2006 If you were an active or deferred member of TRRP on 5 April 2006, you have the right to start drawing your TRRP benefits at any time from age 50. If you joined TRRP on or after 6 April 2006 Following a change in the law, the minimum early retirement age increased to age 55 from April FLEXIBLE RETIREMENT As long as you are an active member and have the company s permission, you can start drawing your TRRP benefits in instalments at any time from age 55 (see page 14). Even though you will have started to receive your Thomson Reuters pension benefits, you will be able to continue saving for your retirement in TRRP. Please note that for administrative reasons, flexible retirement is not currently available to deferred members. YOUR BENEFITS A CASH SUM You can choose to take a tax-free cash sum of up to 25% of the value of your account (up to the lifetime allowance). This includes the value of any AVCs you have paid. The company can award a pension at any time if you are A PENSION forced to give up work because of ill health. After taking any cash sum, you use the rest of your account RETIRING LATE to buy a pension for you that you will receive for the rest of your life. You can also choose how you want your pension to As long as you still work for Thomson Reuters, you can increase. This includes the option of having no increase at continue as a member of TRRP until age 75. all, although this may not be advisable. 13

14 Buying a pension can be complicated, so make sure you choose the right pension for your needs. If you want some help choosing a pension you should speak to an independent financial adviser. (see page 5). RETIREMENT GUARANTEE You can arrange for your pension to be paid for a minimum period if you die after you retire. Your pension can either be paid to a dependant for the balance of the guarantee period or as a lump sum. Please note that the guarantee period is subject to a maximum of 10 years, or the balance to age 75 if that would be shorter. DEPENDANT S PENSION You can arrange for a pension to be paid to your husband or wife or other dependant for the rest of their life following your death. The amount of the pension and payment terms would be decided at the time you retire. HOW FLEXIBLE RETIREMENT WORKS If you would like to start drawing part of your TRRP pension benefits, you will need to apply to the company at least six months before the date you want this arrangement to start. Your manager will work with Human Resources to process your application. You need to be aware that taking flexible retirement may mean a change to your contract of employment. For more details about what this might mean for you, please contact Human Resources. If you want to change your working hours, you will need to apply to your manager for permission to do so. This process will be completely separate from your request to start drawing part of your TRRP pension benefits. YOUR OPTIONS You will be able to draw your TRRP benefits in up to five instalments, normally allowing at least 12 months between instalments. For example, if part of your pension benefit is drawn in January 2012 you cannot take another instalment until January If you start to draw part of your TRRP pension benefits and then leave the company, you will only be able to take the pension benefits that are left in one instalment. You can choose to use at least 20% of the value of your individual pension account at any one time, as long as you use at least 10,000. You must leave at least 10,000 in your account after each instalment has been drawn, unless you are drawing all your pension benefits. FLEXIBLE DRAWDOWN If you have pension income of at least 20,000 per annum, including State pensions, then any pension amount in excess of this can be taken as cash, part tax free and part taxable. YOUR BENEFITS A cash sum You can take up to 25% of the value of each instalment as a cash sum, in line with HM Revenue & Customs rules. An annuity After any cash sum has been taken, the balance of each instalment will be used to buy an annuity from a provider. The company will pay the broking and administration fees that are involved in securing the annuity. Death benefits The following benefits will normally be paid to your dependants if you die in service while drawing part of your Thomson Reuters pension benefits. If you have bought an annuity that provides a pension for a dependant when you die, this pension will start to be paid. A cash sum will be paid. This will be four times the salary you were receiving at the date you died. The trustees decide who receives this cash sum. (For more details, please see Who receives the cash sum on page 15.) The remaining balance of any other Thomson Reuters money-purchase benefits, either AVCs or from your remaining account, will also be paid as a cash sum. As above, the trustees decide who receives this cash sum. If you would like an estimate of the pension benefits you might be able to take, please contact Thomson Reuters Member Services Centre.

15 .. 14 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN PROVIDING PROTECTION TRRP PROVIDES SOME FINANCIAL PROTECTION FOR YOUR DEPENDANTS IF YOU DIE. DEATH IN SERVICE If you are a member of TRRP and you die while employed by the company, TRRP will provide a cash sum for your dependants. The amount available will be four times your reference salary at the date of your death, plus the value of your individual pension account. This benefit will normally be free of UK tax, unless the value of all cash-sum benefits from all your pension arrangements (including any you may have outside the company) is more than the lifetime allowance. DEATH IN DEFERMENT If you are a deferred member (see page 17) and you die before using your individual pension account to provide a package of retirement benefits, a cash sum will be paid to your dependants. The cash sum will be equal to the value of your account at the date you die. WHO RECEIVES THE CASH SUM The trustees decide who receives any cash sum that may be paid if you die in service or as a deferred member. In this way, current law means that the cash sum does not form part of your estate and inheritance tax should not apply. However, you can tell the trustees who you would like to receive any cash sum by filling in and returning an expression of wish form. The trustees do not have to follow your wishes, but will consider them when making their decision. As a result, it is important you keep your expression of wish form up to date. If you cannot remember who you have named on your expression of wish form, or if your circumstances have changed, please fill in and return a new form. You can use Hartlink to ask for a new expression of wish form. You can also ask Thomson Reuters Member Services Centre to send you one. This form is also available on thelink. DEATH AFTER YOU RETIRE If you die after you retire, the benefits paid will depend on the package you choose at retirement (see page 13).

16 15 MOVING ON YOU CAN CHOOSE NOT TO JOIN TRRP. IF YOU JOIN, YOU CAN CHOOSE TO LEAVE AT ANY TIME, AS LONG AS YOU GIVE AT LEAST ONE MONTH S NOTICE. IF YOU LEAVE TRRP, YOU HAVE OPTIONS WHEN IT COMES TO THE BENEFITS YOU HAVE BUILT UP. YOUR OPTIONS If you leave the company, you automatically leave TRRP. Whether you leave the company or opt out and stay in service, contributions will stop being credited to your individual pension account. You then need to decide what you want to do with your TRRP benefits. Members will be entitled to a deferred individual pension account, or a transfer to another scheme. If you have less than two years service in TRRP, any part of your account that relates to contributions you have paid direct from your reference salary (for example, before the company introduced the Pension Adjustment, or as a result of opting out of the Pension Adjustment), you can ask for a refund of these contributions instead. This refund is made up of the contributions you have paid direct from your reference salary, and the investment returns that relate to these contributions. This refund option will not be available to you if you have taken part in the Pension Adjustment. A REFUND OF YOUR CONTRIBUTIONS If you are eligible for this option, this refund will include all the investment gains or losses on the investments you have chosen that relate to the contributions you have paid, up to the date the refund is paid. However, you will not be entitled to any benefits in relation to the company contributions that are credited to your account. The trustees will take tax off the refund. This is currently at the rate of 20%. Once the refund has been paid, neither you nor your beneficiaries will be entitled to any other benefits from TRRP.

17 .. 16 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN A DEFERRED INDIVIDUAL PENSION ACCOUNT As a deferred member your account will not be credited with any more contributions, but you can leave your account where it is and continue to invest it. Your account will be made up of any contributions paid by you and the company, plus any investment gains or losses that may have been achieved. You will be able to change the way you invest your account at any time. The normal retirement age in TRRP is age 60. However, you have the option to use your account to buy a package of retirement benefits earlier than this (see Retiring early on page 13). When you retire, you use your account to buy a package of retirement benefits (see page 13). If you die before buying your benefits, the value of your account will be used to provide benefits for your dependants (see page 15). A TRANSFER TO ANOTHER SCHEME This involves transferring the value of your individual pension account to another pension arrangement. This could be your new employer s scheme, or a stakeholder or personal pension. Once a year, Thomson Reuters Member Services Centre will automatically send you a personalised statement of your TRRP benefits as at the date the statement was produced. This will include the amount available if you want to transfer your benefits out of TRRP. If you are interested in transferring your benefits out of TRRP at any other point during the year, please contact Thomson Reuters Member Services Centre and ask for a statement that shows the transfer value of your benefits. You can see the value of your account at any time on Hartlink, and you have a legal right to ask for the transfer value to be worked out once a year. If you want to take the transfer value, please confirm your plans in writing to Thomson Reuters Member Services Centre. The transfer value will be paid to the pension arrangement of your choice. The transfer does not have to be made as soon as you leave TRRP. You may decide to make a transfer at any time before your normal retirement age. If you want to explore your options, you may find it helpful to speak to an authorised independent financial adviser (see page 5). After you leave service, please make sure you keep in contact with Thomson Reuters Member Services Centre so that your details are kept up to date. The trustees have given details of TRRP, including a contact address, to the Pension Tracing Service. This service aims to help individuals keep track of their deferred benefit entitlements in previous employers pension schemes. If you have changed jobs in the past, you may have money in pension schemes that you have lost touch with. The Pension Tracing Service can help you trace these plans so that you can claim your pension rights. If you want to trace a pension, you can ask the Pension Tracing Service to send you an application form, or you can fill in an online form on the Government s Pension Service website. The Pension Tracing Service The Pension Service Tyneview Park Whitley Road Newcastle upon Tyne NE98 1BA Phone: (textphone: ) Website:

18 17 COMPLETING THE PICTURE BEHIND TRRP THE COMPANY The company is committed to helping all employees save for their retirement and it provides TRRP to help you build up appropriate retirement benefits. TRRP has been set up under trust. The trustee is a company called TRRP Pension Trustee Limited. The trustee company holds TRRP s assets on behalf of the members and keeps them entirely separate from the company s assets. THE TRUSTEES The trustees are the directors of the trustee company. The trustees are responsible for managing TRRP for the benefit of the members, in line with the trust deed and rules. The trustees appoint independent professional advisers to help them in their work. These advisers include investment managers, actuaries, auditors and lawyers. THOMSON REUTERS MEMBER SERVICES CENTRE Thomson Reuters Member Services Centre is responsible for making sure TRRP continues to run efficiently on a day-to-day basis. If you want to speak to someone about TRRP or your benefits, you should contact Thomson Reuters Member Services Centre. Their contact details are on page 5.

19 .. 18 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN TAX ADVANTAGES TRRP is registered with HM Revenue & Customs under the Finance Act This means that TRRP qualifies for certain UK tax concessions which help reduce the cost of membership and aim to encourage employees and employers to save for retirement. This means that under current regulations: the contributions the company credits to your individual pension account do not count as a benefit under UK tax law, so you do not pay UK tax on them, unless the total contributions are in excess of the annual allowance(see below); you receive UK income tax relief on any contributions you pay, up to the annual allowance, unless the total contributions are in excess of the annual allowance (see below); you can choose to take a UK tax-free cash sum of up to 25% of the value of your account, up to the lifetime allowance (see right); your dependants do not normally pay any UK tax on any cash sum that is paid if you die; the investment returns that you earn through TRRP are mainly free of UK tax; and the pension you buy with your account will be taxed under the PAYE (pay as you earn) system. HM Revenue & Customs also sets allowances for the contributions and benefits that can build up without you having to pay tax. ANNUAL ALLOWANCE There is an annual allowance for the total amount of pension benefits you can build up each year without having to pay a tax charge. This includes the benefits you build up in all tax-approved pension arrangements, not just TRRP. The annual allowance from 6 April 2012 is 50,000. You can build up benefits above the annual allowance, but you will pay tax at your marginal rate on any contributions or pension value above this through your tax return. There is a lookback facility whereby any unused allowances from the previous three tax years can be used to offset any tax charge. Please contact the Thomson Reuters Member Services Centre for further details. HM Revenue and Customs works out the amount that counts towards the annual allowance in different ways, depending upon whether you have been building up benefits in a defined-benefit arrangement or a defined-contribution arrangement like TRRP. In TRRP, the amount that counts towards the annual allowance is the total amount of contributions that are credited to your individual pension account. If you want to know how much of the annual allowance your Thomson Reuters pension benefits take up, please contact Thomson Reuters Member Services Centre. LIFETIME ALLOWANCE There is a lifetime allowance for the overall amount of pension benefits you can have when you retire without having to pay a special tax charge. All the benefits you have built up in tax-approved pension arrangements during your working life not just your TRRP benefits will count towards the lifetime allowance. This will include any benefits you may have in schemes with previous employers, and funds built up in any personal pension or similar arrangements. Your State Pension benefits will not count towards the lifetime allowance. The lifetime allowance started at 1.5 million in the 2006/2007 tax year and rose gradually to 1.8 million by 2010/2011. From 6 April 2012 it was reduced back to 1.5 million. As with the annual allowance, you will be allowed to go over the lifetime allowance. However, you will have to pay a tax charge of 55% on the value of any benefits above the lifetime allowance on the date the benefits become due to be paid. If this applies to your TRRP benefits, based on the information held on your records, Thomson Reuters Member Services Centre will withhold it. You will have to account for it through your self-assessment tax return. As with the annual allowance, the pension benefits that count towards the lifetime allowance are worked out differently, depending on whether these have been built up in a defined-benefit arrangement or a defined-contribution arrangement like TRRP. In TRRP, the amount that counts towards the lifetime allowance is the value of your individual pension account. If you want to know how much of the lifetime allowance your Thomson Reuters pension benefits take up, please contact Thomson Reuters Member Services Centre.

20 19 WHAT HAPPENS IF? I GO ON SICK LEAVE If you are temporarily absent from work due to ill health, you will continue to be a member of TRRP as long as you are still employed by the company and are receiving your salary. Contributions will continue to be credited to your individual pension account and your life cover will continue (see page 15). I GO ON MATERNITY OR PATERNITY LEAVE If you are absent on maternity or paternity leave, you will continue to be a member of TRRP as long as you are still employed by the company and receiving your salary or maternity pay. Contributions will continue to be credited to your account and your life cover will continue (see page 14). If your salary or maternity pay stop, the company will pay employee contributions as well as employer contributions to your account. You will also continue to be covered for the lump-sum death-in-service benefit as long as your contract of employment still applies. (This will also apply to other cases of unpaid leave of absence approved by the company.) Any AVCs you may have been paying before your leave will stop. They will recommence on return from unpaid maternity leave. You will also be able to choose to make up your AVC payments when you return to work. I AM ASSIGNED OR SECONDED OVERSEAS If you are assigned or seconded overseas by your employer and your home base continues to be the UK, you will normally continue to be a member of TRRP. Contributions and benefits will be based on what your salary would be in sterling. Whether your contributions qualify for tax relief in the country which you are posted to will depend on local tax law in that country. I TRANSFER OVERSEAS If you transfer to a Thomson Reuters company overseas on local terms and conditions of employment, you will stop being an active member of TRRP. You will be entitled to a deferred individual pension account (see page 17). It may be possible to transfer the value of your account to your employing company s plan, but this will depend on local pension regulations and approval by HM Revenue & Customs. Normally, you would only consider a transfer overseas if you expected to stay with the overseas company in the long-term. If you leave your deferred account in TRRP and return from your overseas employment to continue work with Thomson Reuters in the UK, you will also be able to rejoin TRRP as an active member. Your benefits earned in the overseas plan will be on top of any TRRP benefits. It may be possible to transfer the value of the benefits from the overseas plan to increase the value of your account. This can be considered at that time. If you have been building up benefits in other registered pension arrangements while a member of TRRP, you will need to take these into account when assessing your overall progress against the annual allowance and lifetime allowance..

21 20 TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN MAKING CHANGES At the moment, there are no plans to stop running TRRP or to make any major changes to it. However, the company has the right to amend TRRP at any time with trustees permission. The company also has the power to stop making contributions to TRRP. YOUR STATE PENSION When you reach State Pension age, you may receive a pension from the State. This is on top of the retirement income you buy with your individual pension account from TRRP. The State Pension scheme has two parts the Basic State Pension and the State Second Pension. THE BASIC STATE PENSION This is a flat-rate pension that is based on the level of NI contributions you have paid during your working life. This normally increases each year in line with rising prices. THE STATE SECOND PENSION (S2P) This is an extra earnings-related pension that replaced the State Earnings Related Pension Scheme in April TRRP is not contracted out of the S2P. So, unless you have contracted out of the S2P through a personal pension arrangement, you will earn an S2P pension while you are a member. This benefit will be based on the earnings on which you have paid NI contributions, up to a limit. If your earnings after the Pension Adjustment are above that limit (around 40,040 for the 2011/12 tax year), there is no effect on your S2P benefit. If your earnings are below that limit, you take part in the Pension Adjustment and you are not contracted out through a personal pension arrangement, you will earn a slightly smaller amount of S2P. However, you will benefit from paying lower NI contributions. Or, phone the State Pension Forecasting Team and ask for a State Pension forecast form (BR19). Their phone number is WHEN YOUR STATE PENSION CAN START State Pension age is currently 60 for women and 65 for men. Between 2010 and 2020, the State Pension age for women will change and for men between 2018 and 2020, depending on your date of birth. By 2020, the State Pension age will be 66 for men and women. To find out when you can claim your State Pension, please contact your local social security office, Or, use the online calculator at (look under State Pension age in the A to Z listing). The State Pension Age will rise for males and females up to age 68 by ASSIGNMENT OF BENEFITS You cannot assign (transfer) your benefits under TRRP to any other person. RECLAIMING MONEY TRRP rules allow for the benefits of a member to be reduced to pay any amount they owe to the company due to a criminal, negligent or fraudulent act or failure. IN CASES OF DIVORCE If you are currently involved in a divorce, your civil partnership is being legally ended, or if you become involved in this situation in the future, please let your solicitor know about your pension rights and any that your husband, wife or civil partner might have. Thomson Reuters Member Services Centre can give your solicitor details of your TRRP membership if necessary. You can ask for a forecast of the State Pension you might receive. You can do this online through the Government s Pension Service website at 21

22 PROTECTING YOUR INFORMATION The trustees keep relevant personal information (some of which may be sensitive, such as health details) about all members so that they can work out and pay benefits to you and your dependants. As data controllers under the Data Protection Act 1998, they are responsible for protecting this information, which is only used to help them continue managing TRRP and your benefits efficiently. They may need to pass this information to other people, including the trustees professional advisers, and the trustees and employers of other plans if your benefits are transferred. The trustees and the company have a legal responsibility to process your personal information for this purpose. It is important that we keep your information up to date. If you change address, get married, enter into a registered civil partnership, get divorced or end a registered civil partnership, please tell Thomson Reuters Member Services Centre. If you want to know more about the details we have about you, please contact Thomson Reuters Member Services Centre. SORTING OUT DISAGREEMENTS If you have a complaint about TRRP, please contact Thomson Reuters Member Services Centre and they will try to sort it out for you quickly. If they cannot, or if you are not happy with their reply, there is a special procedure you can follow. You can get a copy of the full procedure from the secretary to the trustees of TRRP. Please write to the secretary at the Thomson Reuters Member Services Centre address (see page 5). The first stage of this procedure is to put your complaint in writing to the secretary to the trustees. Give us as much information as you can, including your full name, address, date of birth and NI. You will normally receive a full reply to your complaint within a month. If you are not happy with the reply you receive, you can write to the trustees direct. You must do this within six months of receiving the decision of the secretary to the trustees. Once again, please send all the relevant information about the matter, including why you are not happy with the secretary to the trustees decision. The trustees will normally send you a full reply within two months. If you are still not satisfied, you can take your complaint to the Pensions Advisory Service or the Pensions Ombudsman (see page 23). However, if you have any questions about TRRP, please contact Thomson Reuters Member Services Centre first TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN

23 OTHER ORGANISATIONS There are a number of other organisations that can help you and your beneficiaries with any questions or worries that you have about your pension arrangements. THE PENSIONS ADVISORY SERVICE (TPAS) TPAS is available at any time to help members and beneficiaries of occupational pension schemes sort out any difficulties they may have. These include any difficulties which members have failed to sort out with the trustees or administrators of those schemes. TPAS 11 Belgrave Road London SW1V 1RB Phone: (all calls are charged at the local rate) enquiries@pensionadvisoryservice.org.uk THE PENSIONS OMBUDSMAN THE PENSIONS REGULATOR The Pensions Regulator is the regulatory organisation for work-based pension schemes in the UK. The Regulator has several main aims. These include: protecting the benefits that members build up in work-based pension schemes; and promoting the good administration of work-based pension schemes. You can contact the Regulator at: The Pensions Regulator Napier House Trafalgar Place Brighton BN1 4DW. Phone: customersupport@thepensionsregulator.gov.uk Website: The Ombudsman can investigate and decide on any complaint or disagreement of fact or law involving occupational pension schemes. The services of the Ombudsman are available to scheme members, beneficiaries and future members of schemes. The Pensions Ombudsman 11 Belgrave Road London SW1V 1RB Phone: enquiries@pensions-ombudsman.org.uk 23

24 STAYING IN TOUCH The trustees will tell you about TRRP and your benefits through regular newsletters. Thomson Reuters Member Services Centre will also send you a personalised benefit statement once a year. You can check your personal details or your individual pension account at any time by logging onto Hartlink. You can also ask to see other TRRP documents including the trust deed and rules, the statement of investment principles, and the formal report and accounts that the trustees publish each year. If you have any questions about TRRP or your benefits, please contact Thomson Reuters Member Services Centre (page 5) TRRP MEMBER BOOKLET GUIDE FOR MEMBERS OF THOMSON REUTERS (UK) RETIREMENT PLAN