PLANNING THE RETIREMENT YOU WANT

Transcription

1 PLANNING THE RETIREMENT YOU WANT Charlotte Supply Chain Graduate HEINEKEN UK Flexible Retirement Plan

2 Contents A reminder of... How the Flexible Retirement Plan works 4 The benefits 6 Consider what you want from your pension How much of my salary should I exchange? 8 Valuable Company contributions 9 Choosing my contribution level 10 SMART Pensions 13 An overview of the investment options Where should I invest my pension pot? 14 Answers to frequently asked questions Frequently asked questions 17 This member guide is for those who started employment before 9th July 2011 and joined the Plan at the first opportunity. Laws and tax rules may change in the future. The information here is based on Standard Life s understanding in April Your personal circumstances also have an impact on tax treatment. The Company means HEINEKEN UK Limited and Scottish & Newcastle Limited. 2

3 Welcome to your pension Plan for the retirement you want - with HEINEKEN s help. The Heineken UK Flexible Retirement Plan (the Plan) is a valuable and competitive pension arrangement that s flexible to your needs. You should always remember, however, that your needs and circumstances can change, so there are some important things that you should review regularly: How much of my salary should I exchange towards my pension? Where should I invest my pension pot? When do I want to retire and take my benefits? Remember, any pension benefits you have already built up in the Scottish & Newcastle Pension Plan are preserved under current legislation. The Flexible Retirement Plan is a Group Flexible Retirement Plan from Standard Life. You should also read the Standard Life Key Features document which explains the risks and commitments involved. For a full list of the Terms and Conditions for the Flexible Retirement Plan please see If you don t have internet access please call us on and we will send you a paper copy. Please see the glossary at or in your joining pack for definitions of some terms you may not be familiar with. 3

4 A reminder of how the Flexible Retirement Plan works A summary of the main benefits and an overview of how it works. Company contributions into your pension pot: worth up to 12% of your pensionable salary. extra Company contributions: worth a further 6%* of your pensionable salary in the first 3 years. Death In Service cover:** 7 times your pensionable salary. Ill Health Income Protection:** provides up to 50% of your pensionable salary plus 15% pension contributions, payable until your Normal Retirement Age (or return to fitness). *Pro-rated in Year 1. ** Death In Service cover is provided by Zurich and Ill Health Income Protection is provided by Canada Life. The Flexible Retirement Plan has been awarded the Pension Quality Mark Plus. This is awarded by the National Association of Pension Funds to defined contribution pension schemes which meet the highest standards in terms of: Contributions. Investments. Governance. Communications. The Plan received the PQM Plus award before it was even launched - the first pension scheme ever to do so. 4

5 How the Flexible Retirement Plan works As a member of the Flexible Retirement Plan, you have your own individual pension pot. You normally exchange at least 3% of your pensionable salary towards your pension and the Company makes an additional pension contribution of double the amount of pensionable salary you exchange, up to a maximum of 12%. For most employees, contributions into the Flexible Retirement Plan will be made through the existing SMART Pensions arrangement, which means that you could benefit from National Insurance savings and don t have to reclaim tax from the taxman. For more details about SMART Pensions, see page 13. Contributions into your pension pot are invested in funds that you choose. When you come to retire, your funds are used to buy retirement income, including a pension. The value of your Plan will depend on the contributions made and the net investment return on your funds. Remember that investment returns can go down as well as up and there is a chance your fund may be worth less than was paid in. ANY INVESTMENT RETURNS PENSION INCOME TAX FREE LUMP SUM (optional) Based on size of your personal pot less any fund management changes The Company sets the contribution levels. 5

6 A reminder of the benefits What s on offer to members of the plan? Valuable Company contributions towards your retirement As a member, you normally exchange a minimum of 3% of your pensionable salary towards your pension. You will then receive an additional pension contribution from the Company worth double the amount of pensionable salary you exchange, up to a maximum of 12%. Extra Company contributions in the first 3 years As an existing employee you are eligible to receive extra Company contributions in the first 3 years worth up to a further 6%* of your pensionable salary. For more details on contributions, see page 9. *Pro-rated in Year 1. Specially designed investment options A number of investment options have been specially designed by the Company in conjunction with its advisers and Standard Life. These investment options are overseen by the Company s Governance Committee, which is made up of employee and independent representatives, as well as Company representatives. If you re looking for more investment options, there s a wide range of competitively priced funds you can choose from. Find out more about your investment options on page 14. 6

7 Death In Service cover As an existing employee you are eligible for Death In Service cover of seven times your pensionable salary. This is payable to your beneficiaries as a tax-free lump sum, subject to legislation at that time. This benefit is provided by the Company in association with Generali. Ill Health Income Protection If you suffer extended ill health whilst employed by the Company, you could receive up to 50% of your pensionable salary until either you return to work or reach Normal Retirement Age, whichever occurs first. In addition you could also benefit from contributions into your pension pot worth 15% of your pensionable salary. Payments are subject to medical approval and are in addition to any sick pay you are entitled to. Your benefits in the Scottish & Newcastle Pension Plan Any benefits you have built up in the Scottish & Newcastle Pension Plan are preserved under current legislation. In line with the Rules of the Scottish & Newcastle Pension Plan, this means that you will receive a deferred pension when you retire. As a deferred member of the Scottish & Newcastle Pension Plan, you may also be eligible to receive other benefits. Visit for more details (this website is not maintained by Standard Life). This benefit is provided by the Company, in association with Canada Life. It is only available to members of the Flexible Retirement Plan. 7

8 How much of my salary should I exchange? How do you see your standard of living in retirement? Thinking about this can help you decide how much to save into your pension pot. Here are some key points to bear in mind when you re looking ahead to your retirement: Think about the standard of living you want in retirement and how much pension you ll need to achieve it. Use the online retirement planner at to estimate how much you might need to save for the type retirement you want. Enter this into the Retirement Planner for a more complete view of your estimated pension. Start early more will be added to your pension pot and the funds will be invested for longer. Take advantage of the Company s contributions the more of your pensionable salary you exchange towards your pension, the more the Company will contribute towards your pension pot, up to a maximum of 12%. 8

9 Valuable Company contributions Make the most of valuable contributions from HEINEKEN. Normally, as a member of the Flexible Retirement Plan, you need to exchange at least 3% of your pensionable salary towards your pension. The Company then makes a contribution to your pension pot which is double the amount of salary you have exchanged (up to a maximum of 12%). Your pensionable Company contribution The total going into your pension pot salary exchange* 3% (minimum) 6% 9% 4% 8% 12% 5% 10% 15% 6% 12% 18% Over 6%** 12%** Your pensionable salary exchange plus 12% from the Company. * As a member, you normally exchange a minimum of 3% of your pensionable salary towards your pension. A non-contributory option is not available. This booklet assumes that contributions to your pension pot are made through the SMART Pensions arrangement (see page 13 for more details). ** You can exchange more of your pensionable salary towards your pension, subject to limits set by HM Revenue & Customs. Extra Company contributions As an existing member of the Flexible Retirement Plan, you also qualify for extra Company contributions over 3 years worth an additional 6% of your pensionable salary. The extra Company contributions will be added to your pension pot as follows: An extra 3% of your pensionable salary from the Company in Year 1*. An extra 2% of your pensionable salary from the Company in Year 2. An extra 1% of your pensionable salary from the Company in Year 3. * Added on a pro-rata basis from 9 July 2011 to May

10 Choosing my contribution level Making the choice that s right for you. You need to decide: 1. How much of your salary you want to exchange towards your pension 2. Whether you want to use the extra Company contributions in the first 3 years to help you gradually step up to your chosen level of salary exchange or whether you want to start at your chosen level and use the extra help from the Company as additional contributions over the first 3 years. Under SMART Pensions, the figures shown below as My salary exchange will be converted into an additional employer contribution to the Flexible Retirement Plan. Once you have chosen your contributions, you re not stuck with them. Each year, you will be reminded of your chosen contributions for the year ahead and you will be able to change these if you wish. If you do nothing, your contributions will automatically move in line with the structure originally chosen. Step up to max I want maximum Company contributions from Year 4 onwards. In the meantime, I want to gradually increase my salary exchange. My salary exchange Company contributions Year 1 0% 9% Year 2 2% 10% Year 3 4% 11% Year 4 onwards 6% 12% Start on ZERO salary exchange and end on MAXIMUM Company contributions You exchange zero salary in Year 1. This increases by 2% each year, until you reach 6% in Year 4. IMPORTANT: If you joined the Flexible Retirement Plan without telling us your preferred contribution option, your contributions will have been automatically set to STEP UP TO MAX. 10

11 Step up to 6% I want to exchange 6% of my salary towards my pension, and I want to step up to this. My salary exchange Company contributions Year 1 3% 15% Year 2 4% 14% Year 3 5% 13% Year 4 onwards 6% 12% MINIMUM salary exchange required to get MAXIMUM Company contributions This option provides you with MAXIMUM Company contributions for the MINIMUM required level of salary exchange. You exchange 3% of your pensionable salary in Year 1. This increases by 1% each year until you reach 6% in Year 4. Step up to 5% I want to exchange 5% of my salary towards my pension, and I want to step up to this. Year 1 Year 2 Year 3 Year 4 onwards My salary exchange Company contributions 2% 13% 3% 12% 4% 11% 5% 10% You exchange 2% of your pensionable salary in Year 1. This increases by 1% each year until you reach 5% in Year 4. Step up to 4% I want to exchange 4% of my salary towards my pension, and I want to step up to this. Year 1 Year 2 Year 3 Year 4 onwards My salary exchange Company contributions 1% 11% 2% 10% 3% 9% 4% 8% You exchange 1% of your pensionable salary in Year 1. This increases by 1% each year until you reach 4% in Year 4. 11

12 Step up to 3% I want to exchange the minimum 3% of my salary towards my pension, and I want to step up to this. Year 1 Year 2 Year 3 Year 4 onwards My salary exchange Company contributions 0% 9% 1% 8% 2% 7% 3% 6% MINIMUM salary exchange required to join the Plan You don t exchange ANY of your pensionable salary in Year 1. This increases by 1% each year until you reach 3% in Year 4. Set your own level I know how much of my salary I want to exchange towards my pension, and I want to do this from the beginning. You exchange a defined percentage of your pensionable salary towards your pension, which must be a minimum of 3% of your pensionable salary. In Year 1, the Company will contribute the equivalent of 15% of your pensionable salary, whichever level of salary exchange you choose. From Year 4 onwards, Company contributions are double the amount of salary you exchange, subject to a maximum of 12%. Each year you will be reminded of your chosen contributions for the year ahead and will be able to change these if you wish. For example: If you choose to exchange 6% of your pensionable salary, contributions will be made into your pension pot as illustrated below. Year 1 Year 2 Year 3 Year 4 onwards My salary exchange Company contributions 6% 15% 6% 14% 6% 13% 6% 12% 12

13 SMART Pensions The Company s salary exchange arrangement. The vast majority of colleagues already participate in SMART Pensions, which has been in place for the Scottish & Newcastle Pension Plan since Participating in SMART Pensions Under SMART Pensions, the salary you exchange towards your pension will be converted into an additional employer contribution into your pension pot. Under current tax legislation SMART Pensions may be beneficial for most colleagues. It means they save on their National Insurance Contributions and get higher take home pay as a result. If you are not eligible to participate in SMART Pensions or choose not to, you can still join the Flexible Retirement Plan. You can simply make employee contributions from your net pay. For more information, please see the SMART Pensions booklet available at If you don t have internet access, please call us on and we will send you a paper copy. You should read this booklet before joining the Flexible Retirement Plan. SMART Pensions isn t right for everyone. It could affect your state benefits, other company benefits or your ability to borrow. If you re not sure whether SMART Pensions is right for you, you should speak to Heineken HR or ask an adviser for guidance. 13

14 Where should I invest my pension pot? Choose a fund that is right for you. Your involvement Low OPTION 1: Lifestyle Profiles What s available? Choose from 3 options designed around lower, moderate and relatively high risk profiles. As you approach retirement, the investment aims of a Lifestyle Profile option are to move away from capital growth and towards preparing your pension fund for your retirement. This happens automatically. OPTION 2: Core Fund Range What s available? Choose from 12 blended funds, covering different combinations of equities, property, bonds and money market instruments. Why choose this option? You re not interested in making your own individual fund choices and you ve still got plenty of time until retirement. Why choose this option? You want to actively manage your investments, but would prefer to choose from a narrower selection of funds rather than the full fund range. The Lifestyle Profiles and Core Fund Range have been designed by the Company, in conjunction with their advisers and Standard Life. The performance will be monitored by the Governance Committee. Narrow Your choice 14

15 The Company, in conjunction with its advisers and Standard Life, has designed a range of options for you to choose from, including Lifestyle Profiles and a range of Core Funds. Standard Life s Full Fund Range and Self Investment options are also available, if you want to have a greater involvement in your investments. Remember, investment returns can go down as well as up, and could be worth less than you originally contributed. Please see the booklet Choosing the right investment options for your pension for more information on all the fund options. OPTION 3: Full Fund Range What s available? Choose from over 300 investment funds, covering a wide range of equities, property, bonds and money market instruments. Your involvement High OPTION 4: Self Investment What s available? Actively manage your investments through a Group Self Invested Personal Pension (GSIPP). Why choose this option? You want to be actively involved in your investment choices and you speak to your financial adviser on a regular basis about all of your pensions and investments. You re prepared to put in the effort to research funds in detail to find what s right for you. Why choose this option? You re knowledgeable and experienced in financial investments and want an even greater choice over your investment funds and when you take your benefits. You are comfortable actively managing your investments and you speak to your financial adviser on a regular basis about all of your pensions and investments. Wide Your choice 15

16 Find out more about your investment options The separate booklet Choosing the right investment options for your pension is designed to help you make your investment decisions. It gives background information on investments and explains each of your investment options in more detail. For further information on the funds available and to use the online risk questionnaire, please visit For more information on the risk questionnaire, please see the booklet Choosing the right investment options for your pension. If you re still not sure about your investment options, you can get help from the dedicated HEINEKEN helpline at Standard Life on The helpline can t give you financial advice. If you feel you need financial advice, you can get details of independent financial advisers in your area by visiting You are responsible for meeting their fees or other costs. Your preferred retirement age You can choose to retire at any age from 55 years (57 from 2028). You are not obliged to retire at your preferred retirement date it is used for administrative purposes. For example, if you invest in a Lifestyle Profile, your preferred retirement age will be used by Standard Life to move your investments into funds designed to prepare your pension pot for how you plan to take your retirement benefits/ income. You can change your preferred retirement age, but if you don t include it on the joining form, then for these purposes we will assume it to be 65 years. 16

17 Frequently asked questions Answers to common queries. How flexible is it? You can change the amount of salary you exchange towards your pension at the annual Plan renewal date. You can also arrange for additional contributions to be made into your pension pot on a one-off basis. However, one-off contributions would normally be made from net pay rather than through the SMART Pensions arrangement, and any higher rate tax relief would need to be claimed through tax self assessment. Also, one-off contributions would not attract any further Company contributions. Please see your Key Features document for more information. You may even be able to transfer benefits from other companies or pension providers into the Flexible Retirement Plan, subject to a minimum transfer value of 1,000. You should always take financial advice before deciding to transfer between different pension plans as valuable benefits may be lost. How do I keep track of my plan? You can see how your pension pot and investments are doing through our secure website. You can log in to the secure site by visiting and using the password provided to you. Once logged in you can: See what your pension pot is currently worth and what it may be worth in the future. Check on the contributions going into your pension pot. Check and change your investments, including free of charge switching for most funds. Learn more about pensions with useful tutorials and calculators. Update your personal details, including your preferred retirement age. 17

18 What charges are applied? Standard Life applies a charge to money invested in its funds, known as the fund management charge. It s shown as an annual charge, but Standard Life deducts it from each fund on a daily basis. Additional expenses may also be deducted from some funds. Standard Life aims to keep charges as low as possible and, in addition, the Company has negotiated special rebates to these charges on your behalf, effectively reducing them. For full details of the fund charges and rebates please see the booklet Choosing the right investment options for your pension at What if I leave the Company? Your pension pot in the Flexible Retirement Plan belongs to you. So if you decide to leave the Company, you have several options open to you: Keep your money in the Flexible Retirement Plan. Change your investments from the existing choices to other funds in the Standard Life range, but not into the specially designed HEINEKEN funds. Transfer your pension pot to a pension plan run by a new employer or to another personal plan of your choosing. If you leave the Company, the Company s contributions to your pension pot will end, including any remaining extra contributions that the Company would have paid over the first 3 years, but you ll still benefit from the rebates to your fund management charges. If you leave the Company, you should speak to Standard Life or a financial adviser for more information about your pension. There may be a cost for this advice. Make further contributions on a personal basis. 18

19 What happens when I retire? There are a range of ways for you to access your pension savings when you reach 55 (age 57 from 2028) - from fixed income (annuity) and flexible income (drawdown) options, to combinations of the two. You can also take a lump sum, with normally no tax to pay on the first 25% of your pension pot. When the time comes for you to consider retirement, Standard Life will write to you and explain your options in more detail, to help you find the right option for you. Your options at retirement will always depend on your personal circumstances. If you want to access some of the more flexible options, you may need to transfer to a different pension product first. Transferring will not be right for everyone. There are a number of points to consider, as you could be losing money by giving up any valuable benefits or guarantees that your current plan offers. You might also want to seek appropriate guidance or advice before you make any decisions. An adviser may charge a fee for this. In the meantime, here s a quick summary of what can be available. Flexible Income Flexible income, or drawdown, gives you the freedom to choose your own level of income and the flexibility to suit your personal needs. To access this you may need to move to a different pension product which offers this functionality. Different charges may apply. As with all investments, your capital is subject to risk, and the value can go down as well as up. Fixed Income Fixed income, or an annuity, is a guaranteed income for life. It s easy to set up and won t need any further attention from then on. You have to pay income tax on it, just as you would your salary. You should be aware that the decision to purchase a fixed income product should be carefully considered, as it normally can t be changed in the future. Take cash from your pension You still have the option to take cash lump sums. The first 25% is normally tax-free. If you take it all out as cash, you need to think about the tax you ll pay. What happens if I die before I retire? If you have another source of income or want to support others after you re gone then leaving your pension invested could be the right choice for you. You can ask us to pass on your remaining pot to anyone you choose, inheritance tax-free. If you die before age 75, this will normally be tax-free. If you die after age 75, this will normally be taxed as income. Please let us know who you would like to receive the value of your pension pot by completing the Nomination of Beneficiaries form available at: Standard Life and all your other pension providers will send you a quote when you re ten weeks away from retiring. 19

20 Need more information? On the web For more information about the Flexible Retirement Plan, visit the website at Dedicated helpline If you have specific questions about the Flexible Retirement Plan or how to join, call the dedicated HEINEKEN customer service team at Standard Life on Calls may be monitored and/or recorded to protect both you and us and to help with our training. Call charges will vary. Financial advice If you re not sure what to do, you should seek financial advice. You can get details of independent financial advisers in your area by visiting You would be responsible for meeting their fees or other costs. Online tools A retirement planner and a risk questionnaire are available at help you make decisions about your pension. Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. WSMEE1HEI Standard Life. Images reproduced under licence.