Transfer of AVC's to the Investor Plan for ELAS
In the summer of 2018, the Equitable announced that it had made plans for the future of the Equitable. These plans include the closure of the with-profits funds and transfer of the business to Utmost Life and Pensions. If these plans go ahead, all with-profits policies will receive an uplift in exchange for the current investment guarantees and the with-profits policies will be converted to unit-linked accounts. The unit-linked accounts will be transferred to Utmost Life and Pensions on 1 January 2020.
Policyholders (including the Trustees of the Siemens Benefits Scheme) voted in favour of these plans at the recent policyholders’ meeting and the plan will now proceed, providing High Court approval is received at the hearing which started on 22 November 2019.
Under the plans proposed by Equitable Life your investments will be transferred to Utmost Life and Pensions, on 1 January 2020. The uplift to your investments will be applied as part of the transfer.
Initially the investments will be held in a cash fund offered by Utmost Life and Pensions (the Secure Cash investment, which is guaranteed not to fall in value) but it is necessary to make a decision on how they are invested longer term.
Utmost Life and Pensions has a range of investment options which could be used. However, the Trustees have reviewed these options and believe that you will receive better overall value if your investments are transferred from Utmost Life and Pensions into the Investor Plan Section of the Siemens Benefits Scheme instead. The range of funds in both arrangements is comparable, but in the Investor Plan you will benefit from the lower fees the Trustees have been able to negotiate with the Investor Plan’s fund managers. You will also benefit from the ongoing control and oversight the Trustees have over the Investor Plan’s investment arrangements.
For more details visit the My Pension website.
No, it will not be possible to do this within the Siemens Benefits Scheme. The Trustees intend to transfer all member investments from Utmost Life and Pensions to the Investor Plan. The only way for you to stay at Utmost Life and Pensions would be to withdraw your funds from the Investor Plan entirely and enter into a personal arrangement with them.
The default arrangement is the one used for all members of the Investor Plan unless they choose otherwise. This option is called the Flexible Access Lifestyle.
‘Lifestyle’ blends together three different funds (the Fidelity Siemens Balanced Fund, the Fidelity Siemens Consolidation Fund and the Fidelity Siemens Opportunity Fund) to achieve long-term growth that is similar to equities but with less variability in returns. The funds invest in a range of underlying funds. Initially they provide diversified exposure to global equities, including emerging market equities, and incorporate a limited allocation to property and infrastructure funds. As you near retirement the blend automatically changes to less volatile investments with the aim of reducing the risk of large fluctuations in your pension savings shortly before you access them. Within 10 years of your target retirement age the blend increases bond strategies with the aim of reducing variability further.
The latest fund charges for the Investor Plan are set out in the following table. Please note these charges can change from time to time; the latest charges can be found on the My Pension website.
The table includes the separate charges for each of the funds that makes up the default arrangement but be aware that the overall charges in the default arrangement will vary over time as the blend of these funds’ changes depending on your age. The charges (the total expense ratio) start at 0.21% if you are 26 years or more from your target retirement age because you would be 100% invested in the Opportunity Fund. They reach a maximum of 0.48% as you approach your target retirement age, when you would be 75% invested in the Balanced Fund and 25% invested in the Consolidation Fund.
*The total expense ratio (TER) is a measure of the total costs associated with managing and operating an investment fund.
**These three funds make up the default arrangement.
For comparison, ten of the twelve funds offered by Utmost Life and Pensions have an annual management charge 0.75% p.a., with the remaining two charged at 0.50% p.a.
Your target retirement age is the age you are aiming to take your benefits, this is automatically set to 65. If you want to choose another age, when the transfer is complete, you can do this by visitingthe Investor Plan page on the My Pension website, logging in and then selecting the change investment screen.
If you are invested in the default arrangement, then your target retirement age will be used to work out when to switch your account into lower-risk investment options and retiring at a different time may defeat the objective of your chosen Lifestyle strategy. For example, if you’re in Flexible Access Lifestyle and your target retirement age is 65, but you actually retire at 60, your account will be invested in higher-risk options when you retire, not having had the time to switch to more balanced options. Investing in higher-risk options close to retirement puts your retirement savings at a higher risk of falling in value due to market movement.
For further information on how your target retirement age affects your investments visit My Pension and navigate to the Investor Plan toolkit.
If you do want your funds to be transferred to the Investor Plan but do not want them invested in the default investment option, you should complete the form attached to the letter you received in October and return it by 31 January 2020.
If you choose this option, your funds will be transferred to the Investor Plan and invested in the cash fund. Once the transfer is complete you will be able to log on to your account through the My Pension website and select your own investments from the full range offered.
After the transfer you will be responsible for choosing your investments from the range offered. If you do not log on and make a selection your investments will remain in the cash fund.
See the FAQ below on how to obtain your log in details if you are not able to currently log in.
If you do not want your investments to be transferred in this way you can choose to transfer to another pension provider, provided you complete and return the transfer out forms by 31 January 2020.
Please be aware that if you elect to move your AVC funds to an alternative provider, then you will be moving them out of the Siemens Benefits Scheme and will not be able to include them in calculating your overall benefits or cash lump sum entitlements when you take your benefits from Siemens Benefits Scheme.
Please also be aware that, although you can transfer your investments from Equitable Life at any time, if you do so before 1 January 2020 you would lose the benefit of the proposed additional uplift.
If we have not received the completed transfer out forms by 31 January 2020 your investments will be automatically transferred into the Investor Plan’s default arrangement.
Once the transfer has been completed, if you currently do not have an Investor Plan account, you will be sent a separate letter detailing your username and login details.
If you do have an Investor Plan account, then you can use your PKI access to log in or your current username and login details.
If you experience any difficulties please contact Trafalgar House www.myworkpension.co.uk/ContactUs. It is worth noting that if you have registered but haven’t logged on for 90 days, you will need to reset your password.
Visit the My Pension website, click on username and password, this will take you to the Orbit employee benefits portal. From here you can click on the ‘Forgotten username or password?’ and follow the on-screen instructions.
Alternatively, if you are a current Siemens employee you can log in using your PKI card. If you experience any further difficulties please contact Trafalgar House www.myworkpension.co.uk/ContactUs. It is worth noting that if you have registered but haven’t logged on for 90 days, you will need to reset your password.