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IT’S GOOD TO
PLAN AHEAD
Talisman
Introducing your retirement savings plan
This is your handy reference guide.
Please keep it in a safe place.
CONTENTS
2
Introducing Royal London
4
Making payments
5
Investing your money
7
Accessing your pension
9
Frequently asked questions
11
Your next step
15
WELCOME TO YOUR
TALISMAN
GROUP PENSION PLAN
This reference guide contains a background to Royal London as
well as lots of useful information about your pension plan: how it
works, the investment choices available and what happens when
you start taking your retirement benefits. You should keep it in a
safe place and refer to it if you have any questions.
3
INTRODUCING
ROYAL LONDON
We’re a mutual organisation and, unlike a
PLC, we don’t have any shareholders to
pay. Instead we’re owned by our members1
and everything we do is for the long-term
benefit of our members1 and all customers.
Members can take part in our AGM and have
their say on the future of our business. Quite
simply, we answer to you - so we’ll always be
looking out for your best interests.
Our business is to provide pensions and to help
ensure our customers enjoy financial freedom in
their later years. We’re proud to play such an
important and valuable role in our customers’
lives.
We believe passionately in independent financial
advice and only sell our pensions through
financial advisers.
We call ourselves pension specialists. But you
don’t have to take our word for it - our long list
of industry awards proves it. Everything we do,
from our carefully selected investment choices to
our excellent customer and online service, is
designed to make saving for your future as easy as
possible. You’ll find out more about us on our
website – royallondon.com
A bit about group pension plans
A pension is for everyone who wants to retire
when they get older, and doesn’t want to worry
about paying the bills when the income from
their job stops. It can also provide an income for
your dependants after your death. The amount of
money you’ll get from your pension depends on a
number of factors including the amount
contributed while you were working and the
performance of your investments.
4
1
A group pension plan gives you the ability to
control your own investment. Your employer can
make payments to your plan on your behalf.
Depending on the way the plan was set up, you
may be able to make your own payments.
Your payments are taken directly from your salary
and paid by your employer to Royal London. We
invest them in your chosen investment funds
until you start taking your retirement benefits.
And when that time comes, you will use the
pension savings that you have built up to give you
a regular income in your retirement.
Tax benefits
To encourage you to save into a pension, the
Government offers generous tax advantages.
• The payments you make benefit from tax relief.
So each time you pay into your plan, the
taxman pays in too. For example, if you wanted
to pay £100 into your plan, you need only pay
£80 and the taxman will pay the other £20.
• If you’re a higher rate taxpayer you can
normally claim additional tax relief through
your self-assessment.
• Your savings are allowed to grow in a taxefficient way.
• If you die before you start taking your
retirement benefits the benefits can be passed
on tax-free as a lump sum to any beneficiary
(up to the lifetime allowance).
We’ve based these details on our understanding
of current taxation law and practice. They might
be affected by any future changes in legislation
and your own personal circumstances. If you need
more information on tax you should get
professional advice.
You’ll be able to see from your terms and conditions whether you’re a member.
MAKING
PAYMENTS
This couldn’t be easier. Your employer will
deduct your regular payments from your
salary and send them to us along with any
payments they make on your behalf. So you
don’t need to worry about setting up direct
debits or sending cheques.
Regular payments can be paid as a percentage of
your earnings or as a fixed amount. Your plan
may be set up so your payments increase at
specific intervals. Your illustration document will
provide further details if this is the case.
Deciding how much to save
Generally speaking, the more you save, the more
you can expect to get back. So you should save as
much as you can afford. And you’ll receive tax
relief on all of the payments you make so long as
they don’t exceed 100% of your earnings. This
limit applies to the payments you make into this
plan and any other pension plans you have in a
tax year.
Your employer will normally help you by making
payments into your plan. Often, the amount they
pay is based on the amount you pay. If this
applies you should pay as much as you can to get
the maximum amount from your employer.
There is an upper limit on the total amount that
can be paid into this and any other pension plan
you have in a tax year. This is known as the
annual allowance – if you exceed it you’ll incur a
tax charge on the excess.
5
Boost your pension savings with one-off
payments
Making one-off payments can really help to
boost your pension savings. You can make
one-off payments at any time. So if you receive a
bonus from work or have some spare cash, you
can pay it into your plan so long as you don’t
exceed the annual allowance. These payments can
be made through your employer’s payroll or by
cheque, and they benefit from tax relief in the
same way as your regular payments.
6
Transfer other pension plans
If you have pension savings built up in other
pension plans you can transfer them into this
plan. As your payments to the previous
arrangement have already received tax relief, the
transfer payment won’t receive any more.
Transfers are complicated, so if you’re thinking of
making one you must talk to a financial adviser to
make sure it would be in your best interests. If
you don’t have a financial adviser, we tell you how
you can find one on page 15.
INVESTING YOUR
MONEY
When deciding how to invest your pension
savings you have two main options. Your
employer may have chosen an investment
option for your plan with help from their
financial adviser. You can stick with this
option or you can choose your own
investments instead.
Here you’ll find a summary of the investment
options available. Remember that investment
returns can fluctuate and are not guaranteed. The
value of your investment can go down as well as
up and you may not get back the value of your
original investment.
Choosing your own investments
If you decide to choose your own investments,
there are a few things you should think about.
Spread your investments
Most financial experts agree that the best way to
invest your pension savings is to have a spread of
investments, such as equities (also known as
stocks and shares), property and cash deposits. So
if one particular investment performs poorly, you
won’t be as badly affected. This is called asset
allocation.
Think about how long you have to save
The amount you invest in each type of investment
is affected by the length of time you have to save.
For example, someone in their twenties might
aim to achieve maximum growth by investing
more in equity funds. On the other hand, an
investor with only a few months to go until they
start taking their retirement benefits might favour
less risky investments such as cash.
Consider your attitude to risk
The more risk you’re willing to take, the higher
your potential return – but the greater your
chance of loss. Lower risk investments on the
other hand offer greater security but lower
potential returns. You need to decide how much
risk you want to take with your pension savings.
To get an idea of your attitude to risk simply
complete our online risk questionnaire at
royallondon.com/riskattitude Decide how involved you want to be
If you want to do everything yourself we offer
a carefully selected range of funds for you to
choose from. If you’d like us to do the work,
our Retirement Investment Strategies offer an
‘off-the-shelf ’ solution.
7
Retirement Investment Strategies
Funds
The closer you get to taking your retirement
benefits the more likely it is that you’ll want to
reduce the risk to your savings. Our Retirement
Investment Strategies are designed to help
with this.
If you want to pick your own funds we offer a
carefully selected range to choose from.
In the early years of your plan, they’ll aim to
provide maximum investment growth by
investing in a higher risk portfolio. In the later
years they aim to reduce your exposure to risk by
investing in lower risk portfolios. This happens
automatically, you don’t have to do anything.
8
• Our pension funds
Our in-house funds are managed by our
investment division – Royal London Asset
Management. These funds offer opportunities
to invest in the UK and overseas and aim to
provide consistent long-term growth.
• Specialist fund managers
You also have access to the investment
expertise of some of the world’s leading
investment companies through our range of
externally managed funds. Some of these funds
have an additional charge.
TAKING YOUR
RETIREMENT BENEFITS
The savings you’ve built up in your plan
belong to you. And when it’s time to take
your retirement benefits, you’ll find that
your plan has a number of flexible options.
Your choices
You can start taking your retirement benefits any
time after age 55, even if you’re still working.
You can take some or all of your plan as a cash lump
sum – 25% of each lump sum will be tax-free. The
rest will be subject to tax.
Alternatively, you can take up to 25% of the value of
your plan as a tax-free cash sum. You can use this
money in any way you want – you could pay off
your mortgage, or simply have extra money to meet
the cost of living.
The rest of your plan or all of it if you haven’t taken
a tax-free cash sum, can be used to provide you with
an income for life by buying an annuity. You don’t
have to take your income from us. You’re free to
shop around other providers to get the best rates.
There’s no charge if you do this.
You also have the option to move to another plan
that gives you the flexibility to take the regular
income you want, when you need it.
Unlike an annuity, income payments are not
guaranteed for the rest of your life. Both the income
payments and the value of your plan may go down.
Regardless of which option you choose, it’s
important that you speak to a financial adviser
before you make your decision.
Making your decision
Don’t worry if you haven’t made up your mind yet
about how you want to take your retirement
benefits. We’ll write to you when you’re close to
your chosen retirement date with more
information about your options.
Accessing your pension before your
selected retirement date
There are different versions of the Talisman
Group Pension Plan. For some versions, where
you access your pension savings before your
selected retirement date, the value of your
pension savings may be reduced.
Versions one to four
The full value of your pension savings may be
paid to you on your retirement as long as you
retire no more than five years before your selected
retirement date. If you retire earlier than this
date, your pension savings will be calculated as a
transfer value and will be a lower amount. See the
What happens if I leave my employer? section
on page 11.
Versions five and six
The full value of your pension savings may be
paid to you regardless of when you retire. See the
What happens if I leave my employer? section
on page 11.
If you are unsure about which version your plan
is, please contact your financial adviser.
Find the best deal for you
Just because you have saved with Royal London
doesn’t mean that you have to take your income
from us. You’re free to shop around and compare
other companies’ rates to get the best deal.
Know your limits
There is a limit on the amount you can have built
up in this and any other pension plan when you
start taking your retirement benefits. It’s set by
the Government and it’s called the lifetime
allowance. If you want to find out more visit
yourplan.royallondon.com.
9
Other things to think about
The benefits you choose
You will want to know how much you’ll get when
you start taking your retirement benefits. The
amount you’ll get will depend on a number of
things.
We mentioned earlier that when you start taking
your retirement benefits, you can choose from a
range of options. The option you choose will
affect the level of your income.
How much you pay into your plan
Pension rates
Generally speaking, the more you pay in, the more
you can expect to get back. You can find more
information on making payments on page 5.
The amount of income you receive depends on
the rates available when you start taking your
retirement benefits. Remember that you can shop
around to find the best deal.
How long your payments are invested
The earlier you start saving, the more chance your
money will have to benefit from investment
growth.
The investments you choose
The performance of your chosen investment
funds will affect the overall value of your pension
savings. You’ll find more on the investment
choices available to you on page 7.
The charges under the plan
The plan charges will affect the amount you get
back. To find out what the charges are under your
plan, look at the What are the charges? section
on page 12 or speak to us. You’ll find our contact
details on page 15. Further details regarding the
charges can also be found in your key features
document.
When you start taking your retirement
benefits
If you decide to take your retirement benefits
early, you will have saved less into your plan. This
means that the value of your pension savings
could be less than if they had remained invested
longer. There may also be charges made to your
plan if you choose this option.
10
Keeping track of your pension
These days, many of us do our banking
online: and at Royal London we offer a
similar facility for your pension.
Our award-winning online service allows you
to access lots of information about your plan,
including:
• the current value of your pension savings
• details of the investment funds your
savings are invested in
• payment details.
We designed our online service to keep you
in control. It allows you to keep track of how
your pension savings are performing. If your
employer has set up online access for you, we
will write to you with information on how to
register and start using the service.
We’ll also send you a paper statement each
year showing you how your pension savings
are performing.
FREQUENTLY
ASKED QUESTIONS
What happens if I leave my employer?
If you leave your employer you can:
• Continue your existing payments to this plan
– remember that the payments your employer
makes will stop.
• Stop making payments and leave the pension
savings you have built up invested.
• Transfer the pension savings you’ve built up to
another pension plan. Transfers are
complicated and you must talk to a financial
adviser if you are thinking of doing this.
Some Talisman Group Pension Plans may have
received a discount to the charges. Typically, if
you leave your employer this discount will be lost.
The amount of your transfer value will depend
upon which version of the Talisman Group
Pension Plan you have:
• For versions one, three and four, the value of
your pension savings is available as a transfer
value if taken within five years of your selected
retirement date. At other times, we may apply
a fund reduction factor. Any reduction made
will be to take account of any expenses
properly incurred in setting up and
administering the plan on an ongoing basis,
which have not been deducted before the
transfer takes place.
• For version two, the value of your plan is
available as a transfer value if taken within five
years of your selected retirement date.
However, if taken at any other time the full
value of your pension savings may not be
available as a transfer value. In strictly limited
circumstances, the full value of your pension
savings may be available as a transfer value
before you have reached five years from your
selected retirement date. The circumstances
relate to the status of the other members in
your group plan and the transfer value must
have been requested within three months of
you leaving your employer’s service and
stopping making payments. You will be
notified if this applies to your plan.
• For versions five and six, the value of your
pension savings will be available as a transfer
value at any time.
• If your plan is invested in the With Profits
fund we may reduce the value of your plan by
applying a market value reduction if you take
money out of the fund at any other time than
your selected retirement date.
What happens if I die before I start taking
my retirement benefits?
We will normally pay out your plan value as a
tax-free lump sum to any beneficiary you have
nominated such as your spouse, civil partner, or
dependants on your death.
If your employer has added extra life assurance to
your plan, the appropriate amount will be paid
out as well.
Alternatively, you can use the plan value on your
death to provide an income for any beneficiary
you have nominated.
You can tell us who you would like to receive
your benefits if you die by completing the
nomination of beneficiaries form included in
your plan documentation.
11
What happens if I die while taking my
retirement benefits?
When you start taking your retirement benefits,
you can ask for your regular income to be paid to
any beneficiary such as your spouse, civil partner
or dependants if you die. If you choose this
option your regular income may be lower.
Can I increase my regular payments?
You can increase your regular payments at any
time. Just let your employer know what your
revised payments are and they’ll handle the rest.
What about pension savings I have built up
with previous employers?
If you have pension savings built up with a
previous employer, you can:
• Transfer the value of your existing pension
savings into this plan. Transfers are
complicated, so if you’re thinking of doing this
you must talk to a financial adviser to make
sure it’s in your best interests.
• Pay into both arrangements so long as you
don’t exceed the annual allowance.
• Stop making payments and leave the plan
invested.
What are the charges?
There is a charge for managing your plan known
as the annual management charge. This is taken
from the pension savings you’ve built up. Your
illustration document will show the annual
management charge that applies to your plan.
12
There may be other charges that apply to your
plan such as the following:
• A monthly member charge may apply to your
plan. This charge will be taken from each
regular payment and increases each year in line
with the Retail Prices Index.
• An initial administration charge of £25 may be
deducted from any single payments and
transfer payments paid to the plan.
• After the deduction of any administration
charge, a percentage of each payment will be
allocated to the investment fund(s) selected.
The allocation percentage will depend upon a
number of factors.
• A unit cancellation charge may also apply to
the plan.
• Your payments buy units at the ‘offer’ price and
you will sell your units at the ‘bid’ price. The
bid price is currently about five per cent lower
than the offer price.
• Commission may have been paid to a financial
adviser who helped set up your plan. You
should check your illustration document for
further details.
Further details on these charges can be found in
your key features document.
Are any bonuses added to my pension
savings?
What if I can’t keep up my regular
payments?
Depending upon what version of the Talisman
Group Pension Plan you have, a bonus may be
added to your pension savings when you take
your benefits:
Don’t worry. You can reduce the amount to a
level that’s more affordable. But if you do this,
the amount your employer pays may also reduce.
Or you can take a payment holiday while you
remain in the group plan. The member charge,
where applicable, will continue to be deducted
during a payment holiday but there are no
additional charges. You can start regular
payments again at any time. Remember to check
with your employer what effect this will have on
their payments.
• For versions one, two and three, a loyalty
bonus may be added to your pension savings
on retirement, death, or transfer.
The full value of the bonus will be paid within
five years of your selected retirement date.
A reduced rate may be paid if you take your
benefits or transfer your pension savings
earlier than five years before your selected
retirement date.
Loyalty bonus will cease to accrue on funds
secured by regular premiums if your policy is
made paid-up prior to your selected retirement
date, transfer or death. You may not receive the
full amount of loyalty bonus on funds secured
by regular premiums if your policy is made
paid up earlier than 5 years before your
selected retirement date.
Different rates of loyalty bonus will be applied
to funds built up from regular and single
payments. The level of loyalty bonus will depend
on the number of years which have elapsed
since the payment was made. Full details of the
loyalty bonus can be given on request.
• For versions four, five and six, and as an
alternative to a loyalty bonus, additional units
calculated as a percentage of your fund may be
added to your pension savings at the end of
each scheme year. Details will be shown on
your illustration document, if applicable.
What if I want to leave my plan invested?
You can stop your payments altogether and leave
your pension savings invested in your chosen
funds or Retirement Investment Strategy. The
value of your savings when you take your benefits
will depend upon which version of the Talisman
Group Pension Plan you have:
• For versions one, three, and four, the full value
of your pension savings will normally be
available as a benefit if payments stop at least
four years after your plan starts. At other
times, we may apply a fund reduction factor.
Single payments may continue to be made to
the plan. With our agreement, you can start
regular payments again.
• For version two, the full value of your plan will
normally be available.
• For versions five and six, the full value of your
pension savings will be available.
13
Can I cash my plan in early?
Can I change my mind?
Your pension savings are locked in until you
reach age 55.
You have 30 days from when you receive your
plan documents to change your mind. If you
decide that you don’t want the plan you should
complete and return the cancellation form
provided to you.
It may be possible for you to start taking your
retirement benefits before age 55 if your health
means you can no longer carry out your job.
What happens if I am off work due
to sickness?
If you are absent from work as a result of sickness
or injury, you will normally continue making
payments into the plan. If your employer makes
payments into the plan, ask them what would
happen to these payments.
What happens if I go on maternity leave?
While on maternity leave you can continue,
reduce or stop your payments – the choice is
yours. And when you return to work, you can
easily increase or start your payments back up
again. If your employer makes payments into
your plan on your behalf, ask them what would
happen to these payments during maternity
leave. Remember that reducing or stopping your
payments will reduce the amount you get back
when you start taking your retirement benefits.
What happens when I reach my selected
retirement date?
We will get in touch with you between three and
six months before you are due to start taking your
retirement benefits. At this point you will receive
information detailing the options that are
available to you.
14
Who do I speak to if I have a complaint?
Providing our customers with excellent service is
very important to us. But if there’s anything
you’re unhappy about, talk to our Customer
Service team who will try their best to resolve the
matter.
If you want to make a complaint you can contact
us by the following methods:
Customer Relations Team,
Royal London House,
Alderley Road,
Wilmslow,
Cheshire SK9 1PF
0845 60 50 050 Monday to Friday 8am
– 6pm. We may record calls to help
improve our customer service.
[email protected]
If you’re not satisfied with our response you can
complain to the Financial Ombudsman at:
The Financial Ombudsman Service
Exchange Tower
London
E14 9SR
YOUR
NEXT STEP
Throughout this guide we’ve talked about the
importance of financial advice. There are a lot of
important decisions to make when it comes to
planning for your financial future. So it makes
sense to talk to an expert before you take any
action.
You need to remember that small amounts of
pension savings can affect your entitlement to
State benefits.
If you don’t have a financial adviser you should
contact IFA Promotion. This is a free service
that will help you find a financial adviser
in your area. Visit their website at
www.unbiased.co.uk/find-an-ifa.
Remember that you may be charged for
the service provided by a financial adviser.
If you have a question that isn’t covered here or
you want to talk to someone about your plan, you
can contact our Customer Service team. They
won’t be able to give you financial advice but they
will try their best to provide you with any
information you need.
0845 60 50 050 Monday to Thursday 8am
– 6pm and 8am – 5pm on a Friday. We
may record calls to help improve our
customer service.
0131 524 8800
[email protected]
royallondon.com
Royal London House
Alderley Road
Wilmslow
Cheshire
SK9 1PF
15
Royal London
1 Thistle Street, Edinburgh EH2 1DG
royallondon.com
All literature about products that carry the Royal London brand is available in large print
format on request to the Marketing Department at Royal London, St Andrew House,
1 Thistle Street, Edinburgh EH2 1DG.
All of our printed products are produced on stock which is from FSC® certified forests.
The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in
England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the
Financial Conduct Authority and introduces Royal London’s customers to other insurance companies. The firm is on the Financial Services Register, registration number
302391. Registered in England and Wales number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Corporate Pension
Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration
number 460304. Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London, EC3V 0RL.
April 2015
27G0165/7