Presented by Graham Moore

Who we are

National Firm of Employee Benefit Consultants

Established 1980 9 offices in the UK

Lucas Fettes & Partners

Independent Financial Advisers Authorised and regulated by the Financial Conduct Authority

In partnership

Appointed to deliver pension solutions for NCVO members in April 2011

Open to all voluntary organisations Affinity Group Terms

Contents
Background & Challenges

Company Proposition

Overview of Legislation

Legal Requirements

Next Steps

Setting the scene

Facts & Figures

Male aged 65 Average life expectancy 20 yrs

Females born today 4/10 100 yrs old Current Basic State Pension - 113.10 2014/15 BSP represents 24% of annual average wage
Proposed changes Proposed Reforms: Increase in SPA 66 from 2020, 67 from 2024/6 & 68 from 2038 Universal fixed rate pension - 144.00 p.w. from 2017 35 yrs NIC required

What are your plans ?

Consider what you want to achieve

Will you have to continue working beyond the SPA?

OR

Wish to retire with sufficient income?

Auto-Enrolment overview
Commenced October 2012 Automatic Enrolment from staging date

Eligibility criteria

Contribution criteria

Compliance of regulations

Penalties

Assessing your workers

Worker type Age band Earnings Enrolment Duty
Must be automatically enrolled Employer Contributions

Eligible jobholders

22 - SPA 16 21 or SPA 74 16 74

10,000+

Non-eligible jobholders

10,000+ Have a right to opt in Above 5,772 but below 10,000 Up to 5,772 Have a right to join

Entitled workers

16 - 74

Matt can you change this to look like the other slides (see previous)

Certification

Tier 1 2 3

Total Contribution 9% 8% 7%

Based on Basic pay Basic pay* All pay

Min employer % 4% 3% 3%

Employee % 5% 5% 4%

* Providing basic pay represents at least 85% of payroll

Opting Out and Re-enrolment

Auto Enrolment in practice
Eligible jobholders can opt-out Ongoing responsibility to maintain the enrolment, opt in and out process.

1 month joining window

Periodically employers will need to re-enrol workers

About Scottish Widows

One of the most financially secure providers in the UK

A rated by key rating agency Standard & Poors

Over 44,000 schemes (March 2012)

Over 2.0 million pension customers (March 2012)

Range of clients from small employers to PLCs and across all sectors

Current Scheme vs New Scheme

Pension Scheme Current Clerical Medical Group Stakeholder Pension Allocation rate Charges Investment choice - Default investment Contributions 100% 1.0% AMC (core funds) 32 investment funds None individual choice Employer - 6% of BAS Personal - voluntary New Scottish Widows Group Personal Pension 100% 0.57% AMC (core funds) 120 investment funds Balanced Pension Approach Employer matched up to 6% Or Phased contributions (4 yrs)

Phased Contributions
Employer contribution of 3% after 4 years

Personal minimum contribution of 4% after 4 yrs Contributions phased in over 4 year period Up to to 30 Sept 2017 Employer 1% Personal 1% 1 Oct 2017 to 30 Sept 2018 -Employer 2.5% Personal 2.5% From 1 Oct 2018 Employer 3% Personal 4% Contributions based on ALL pay

Personal Contributions paid net of basic rate income tax

Annual Contribution allowance 2014/15 - 40,000

Tax Relief on Personal Contributions

Example: Employee earning Services 20,000 per annum - initial 1% contribution provided
Monthly payments example
Employer pays 16.67

Tax Relief *Basic rate on tax your relief contributions at source Higher rate tax claimed through self assessment or via coding

You only pay

13.33*

Your tax relief 3.34

Collected via Payroll net of pay

Total paid in

33.34

Investment Attitude to Risk

Potential Return High

Risk v Return

Individual Shares Emerging Markets Regional/Specialist Global Equities UK Equities

Property Corporate Bonds Gilts Low Low Cash RISK High

Investment Options

Three risk-based Lifestyle options Adventurous Balanced (Default) Cautious

Online Investment decision maker

Ongoing Governance

Managing investment risk to retirement

Adventurous Balanced Cautious

Stage 1: 15 years or more to go Going for growth Stage 2: 15-5 years to go Gradual risk reduction Stage 3: last 5 years Maximising tax-free cash + pension

Core Services - Employees

Financial education

Member engagement

Employee

Online management

Access to advice

Leaving Service

Why save in a Pension

Longevity Build a retirement fund (replacement for earnings) Employer contributions Tax Relief Control and Independence

How does it work?

Build a Fund for Retirement Size of fund depends on:

Term of saving period Amount of contributions Employer Contributions Investment Choice Plan charges Personal Contributions Tax Relief

Choices at Retirement

Retirement Fund

Maximum Tax Free Lump Sum 25% of fund

Purchase an annuity
(open market option)

Alternatives
Phased Income Drawdown Third Way

Single life Spouses benefit Indexation

Potential Annuity Rates

Individual Aged 60 Pension Fund Value 100,000
Single Life, level with 5 yr guarantee - 5,578 p.a. gross

Joint Life, 50% spouse, level no guarantee - 5,250 p.a. gross Joint Life, 50% spouse, RPI 3% p.a. no guarantee - 3,379 p.a. gross

Income from an annuity is taxed as earned income

Projection of Benefits

Joining Process

Current members
Contractually joined or Auto - Enrolled Joiner notification issued Including opt out Policy issued Log in details for online services Consolidation options

Non members
Auto Enrolled or Express an interest in joining
Joiner notification issued Including opt out Policy issued

Log in details for online services

Summary

You need to provide for your retirement A pension is a tax efficient way of saving After Adoption will contribute towards your plan Low charges and access to a wide range of funds

Lucas Fettes provide advice and guidance

Important Notes

Please note, this presentation has been prepared based on our current understanding of UK taxation, Law and HMRC Practice. The tax treatment of arrangements varies according to the financial circumstances of the individual concerned. Past performance is not necessarily a guide to the future returns and values can go down as well as up. Lucas Fettes & Partners (Financial Services) Limited is an Independent Financial Adviser authorised and regulated by the Financial Conduct Authority FCA no. 146279.