Standard Life Staff Pension Scheme ("the Scheme") Q&A’s prepared by the Scheme Trustees – 13 May 2015 Question Answer What is the delivery time for a retirement or transfer value quotation? The normal service level for producing a transfer value quotation is 10 working days from receipt of request by Mercer (the Scheme Administrator) As a result of the Government’s April announcement of the new flexibility and choice in how people may take retirement savings, and the outsourcing of the administration service from Standard Life to Mercer, there has been a significant increase in requests for information and illustrations. For example there has been a 60% increase in members requesting transfer value quotations in comparison to this time last year. This is impacting on Mercer’s ability to respond to members within the normal service level timescale. To reduce the backlog and return service to the expected levels the Trustees have agreed with the following: • Mercer has allocated additional resource to its Standard Life Administration. Hymans as Scheme Actuary has agreed to assist with all the transfer cases and they will shortly be in contact with members with outstanding quotes. As a result of the above measures taken by the Trustees, the backlog is expected to be cleared by 30 June. This is of course subject to there being no further unanticipated spikes in member requests. If you are a deferred member of the Scheme: • You are entitled to request at least one (free) statutory transfer quotation a year; • As per the statutory regulations, any transfer quotation you receive will be guaranteed for 90 days from the date of issue If you are an active member of the Scheme • Any transfer you request would not normally be guaranteed and will vary depending on market conditions. However, recognising the unusual current circumstances, the Trustees have decided to treat active members in the same way as deferred. Thus they will provide a 90 day guarantee on one quote per annum to active members. This means that all quotes issued from the 1 March 2015 onwards will be guaranteed for 90 days from the date the quotation was issued • Hymans will be in touch with all active members who have received a quotation in this period to establish what they wish to do. Is the TV quote guaranteed or not? And if so for how long? Page 1 of 5 Standard Life Staff Pension Scheme ("the Scheme") Q&A’s prepared by the Scheme Trustees – 13 May 2015 I have received a transfer value quotation but I have not had sufficient time to obtain IFA and complete all of the paperwork within the quotation guarantee period. Can I get an extension? I am an active Scheme member considering transferring out of the Scheme and need to provide my IFA with sufficient information for them to complete the TVAS assessment. Will this be provided with the quotation Mercer prepares for me? Guarantees cannot normally be extended but in recognition of the delays experienced by members the Trustees will consider providing a short extension at their discretion to allow members to complete the advice process. If you wish to apply for an extension, please email the trustees: [email protected] Yes. From now, we will provide the necessary information with the quotation. If you already have a quote and do not have all the necessary information, please let Hymans know by contacting [email protected] What evidence of IFA do I have to provide to Mercer before the Scheme Trustees will release the transfer settlement? How is a partial transfer calculated? For all quotes issued after 6 April 2015, you must provide evidence confirming that you have received appropriate independent advice. This should be in the form of a written statement from your adviser confirming that they have given you advice relating to the transfer and that they are authorised to give such advice. The statement should also quote your name, the scheme name and the adviser’s FCA’s reference number. Mercer will check the Financial Services Register to ensure that the adviser is FCA regulated and has permission to provide advice on the conversion and transfer of pension benefits. The calculation of partial transfers is performed as follows: This can be simplified in a broad example · Protected benefits earned prior to 6 April 1997, otherwise known as the Guaranteed Minimum Pension (GMP), can either be transferred in full or not at all. This will depend on the type of request, detailed below. · The remaining pension can be taken in full or in part. Some members have several different tranches of benefits on different terms. The same proportion must be taken from each tranche. · Any revision to the partial transfer value request will be treated as a new request and calculated at the date of quotation. Partial transfer value quotes can be requested by active and deferred members and will be guaranteed for a period of 90 days from the date of quotation. There is also a worked example on the trustee website. Page 2 of 5 Standard Life Staff Pension Scheme ("the Scheme") Q&A’s prepared by the Scheme Trustees – 13 May 2015 Do I need to leave part of my DB and / or DC benefits in the Scheme in order to qualify for future accrual of DB benefit (until 15 April 2016) and DC benefit from that date? When I have called Mercer they are not able to answer the technical points I have asked about? I have heard that the Trustees are reviewing the transfer value factors. Where can I find out what impact this will have on the transfer value payable in lieu of my Scheme benefits? I want to transfer to a SL product. Will I need to transfer my investment completely out of the Scheme then re-‐invest the payment into my individual product even although I want to use the same SL funds? No. You can transfer your DB and DC benefits and still accrue further DB benefits until March 2016 and DC benefits thereafter providing you remain in employment. Mercer has carried out significant training with all the customer relations advisors and administrators to ensure they have a full understanding of the Scheme benefits and options. Sometimes however there are queries which are specific to an individual that may require a more technical review or actuarial input. These are escalated to the appropriate level and a response should be provided to you. In the short term, given the volume of calls, Mercer has had to draft in additional resource and so the desired level of service has been hard to maintain. We can only apologise for this and assure you that the normal service will resume once the backlog is dealt with. The Trustees are required to review the Transfer Value basis from time to time and to seek an assurance from the Scheme Actuary that the basis is appropriate. The Trustees normally carry out this review following the Scheme's triennial actuarial valuation. The latest valuation has just been completed and the review of the transfer value basis is underway. That is not to say that there will necessarily be any change. However, the trustees are aware that it would be preferable to resolve the basis as quickly as possible. On the other hand, it is a very important matter which needs full and proper consideration. Yes; the Scheme and company are entirely separate, therefore even if a transfer is to a Standard Life product the normal transfer procedure must be followed involving the disinvestment of the transfer value in lieu of your accrued benefits from the scheme, and payment of this transfer payment made to the receiving scheme or provider. All the necessary paperwork is required in the same way as for transfers between non-‐related pension funds and Standard Life. Page 3 of 5 Standard Life Staff Pension Scheme ("the Scheme") Q&A’s prepared by the Scheme Trustees – 13 May 2015 I am retiring shortly but still not had a final statement of what my benefits will be? Can I use a Standard Life Private Client manager to provide me with IFA on whether or not to transfer out? I want to retain my benefits in the Scheme but want to be able to take my benefits in tranches once I retire – is this possible? I have heard that small Scheme pensions can be completely cashed in – is that possible? Why can’t I get a transfer value quotation, retirement illustration and other illustrations on line? Under the normal service agreement between the Trustees and Mercer, you will be provided with details of your estimated Scheme retirement benefits and options 7 th
months prior to your 60 birthday (the Scheme’s Normal retirement Age). As mentioned previously, we have had a significant increase in enquiries which is impacting on our ability to respond to members within the normal service level timescales. If you are due to retire shortly Mercer are currently preparing your quotation of benefits and options and will send this information to you as soon as it available. Please be assured we are giving this work the highest priority. Yes. If you wish to use SLPC to advise you can do so as they have the appropriate FCA authorisation. Members should be aware that SLPC will only be able to advise on Standard Life products. Members who wish to know about other products available in the market may prefer to consult an IFA. This is not possible. To do this you can transfer some or all of your pension to a drawdown product from which you can withdraw cash. If you are over age 55 and if all your pension benefits do not exceed £30,000 and you have not taken a trivial commutation already you can cash this in. If you are over age 55 and your Standard Life Scheme benefits are up to £10,000 you can cash this in. Both of these amounts are subject to income tax. The Trustees are working with Mercer to offer all Scheme members self-‐service, secure on line access to information and illustrations in the next few months. This will allow all members to access up to date transfer value and other benefit quotations online at any time. This self-‐service, online access is currently being tested ready for delivery to all Scheme members. Page 4 of 5 Standard Life Staff Pension Scheme ("the Scheme") Q&A’s prepared by the Scheme Trustees – 13 May 2015 I was told that my request for a quotation of my benefits is in a lengthy backlog which will take a long time to clear. What is being done to resolve this situation What information does Mercer require in order to meet their security requirements when I contact them? As a result of the budget changes and the outsourcing of the administration service there has been a significant increase in enquiries. For example there has been a 60% increase in members requesting transfer value quotations in comparison to this time last year. As a result this is impacting on our ability to respond to members within the normal service level timescales. All requests by email, telephone and post are logged onto our system and dealt with on a chronological basis. Please be assured that the Scheme Trustees are monitoring the position very closely with Mercer and that Mercer are giving this work their highest priority. • Full name • Date of birth • National Insurance number • (If you require a change of address) The month and year you joined the company If you have not supplied the above pieces of information, we will not be able to action this e-‐mail. Page 5 of 5