© copyright mercer employee benefits limited 2007 mercer employee benefits limited is authorised...
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© Copyright Mercer Employee Benefits Limited 2007
Mercer Employee Benefits Limited is authorised and regulated by the Financial Services Authority.Registered in England No. 404370. Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU.
Making
YourChoices
Presentation Title
Date
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What I/we will cover today
Reminder of the changes
Deciding how much to contribute
What do you need to consider about investments
The investment funds
The next steps
Questions and answers
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A brief summary of the changes
Pension benefits build up through Investor Plan from 01/01/2008 on enhanced basis
Pensions benefits built up before 01/01/2008 are protected and will increase
The Company will pay off the deficits
From 01/01/2008 you will no longer build up a pension from the Defined Benefit section of the Siemens Benefit Scheme
Death in service and ill health benefits protected at minimum of current amount for next 5 years
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How does defined contribution work?
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Contributions
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Contribution type
Company match
Tax relief NI saving Flexibility to change
The types of contribution
Matched
AVC
×
× ×
××EDC
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What can you afford to pay?
Maximising the Company match
The earliest you can access your savings is age 50 (55 from 6th April 2010)
What are your other assets?
When do you want to retire?
Deciding how much to contribute
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BasicsInvestment
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Savings RiskSavings Risk
Volatility RiskVolatility Risk
Inflation RiskInflation Risk
Investment risk is the chance that your investment will be lower than you expect
Investment risk
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Cash investments offer the most security but may not grow fast enough to keep pace with inflation
Also known as ‘gilts’ when issued by the UK Government, bonds represent loans to companies or governments that are repaid with interest to investors over time
Also known as ‘stocks and shares’, equities represent part ownership of a company, including its earnings and assets
Equities, bonds and cash are the building blocks of most investmentsEquities, bonds and cash are the building blocks of most investments
Equities
Bonds
Cash
Investment choices
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Please note: Any statement of past performance of any particular fund is not a guide to future performance. Also investments/funds denominated in a foreign currency will fluctuate with the value of the currency and any income from foreign investments will fluctuate in value.
Please note: Any statement of past performance of any particular fund is not a guide to future performance. Also investments/funds denominated in a foreign currency will fluctuate with the value of the currency and any income from foreign investments will fluctuate in value.
Cash
High ReturnEquity
Bonds
Low ReturnHigh RiskLow Risk
Investment choices
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Projections are based on Market Interest Rate Expectations.
Source – Bank of England, CPI Fan Chart - May 2007
Inflation risk
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Consider how long you have until retirement…
This graphic is not intended to recommend a specific course of action for you. Each person would have to consider their own attitude to risk in the context of their overall retirement and private financial planning.
The road to retirement
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Passive (Index-tracker)
Aims to track the performance of the market (even when it falls)Reduces risk of performing less well than a market
Investment management fees are lower
Active-management:
Aims to outperform the marketPotentially better returns than Index Tracker but risk that could do worse
Investment management fees are higher
Passive or Active
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The equity funds
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Property, bonds and cash
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Specialist funds
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Lifestyle Strategy
Private Fund
Fixed Annuity Target
Cash
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Sign and return ‘Employment Contract Amendment’ forms and return by 24th October 2007
My choice enrolment process (details sent out in last week of October):Decide how much to pay
Choosing where to invest (‘Lifestyle’ or ‘Freestyle’)
If select ‘Freestyle’, additional form issued in first week of December
The next steps
© Copyright Mercer Employee Benefits Limited 2007
Mercer Employee Benefits Limited is authorised and regulated by the Financial Services Authority.Registered in England No. 404370. Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU.
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Remember, if you select the same contribution
rate your take-home pay will go down
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Helpdesk:email: [email protected]; external tel: 0845
6039972; internal tel: x5555 – option 6
Calculators and modellersPensions modeller: http://siemens.pensionline.org
Contributions calculator: http://intranet.css.siemens.co.uk/pensions
IFA Advice:First £200 reimbursed, claim form returned by 30th November 2007
Additional Support Available?
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Yourquestions