Trust Retirement Guide Trust for your future Retirement Guide Trust for your future ... n As a lump...

Trust Retirement GuideTrust for your future

6 April 2017

Capgemini UK Pension Trust

As a member of the Trust, you are able to access your Personal Account benefits in a variety of different ways. The Trust offers you the flexibility to:

n Take an income – and change this anytime you want;

n Dip in to your savings and take a cash withdrawal anytime you like;

n Keep your pension pot invested, giving it the potential to keep on growing;

n Change your mind and buy a fixed income (annuity) for life, anytime;

n Pass on what’s left in your pot to your loved ones, free of inheritance tax, when you die: - If you die before age 75, this will be completely tax-free. - If you die after age 75 or over, they will be able to access the pension flexibly, at any age, subject to tax;

n You can access your pension savings anytime from the age of 55.

Typically, 25% of your Personal Account can be enjoyed tax-free. You can choose to access your tax-free cash either :

n As a lump sum upfront and leave the balance invested for the future;

n As a lump sum with the balance being used to provide you with a regular income;

n As part of each payment you receive.

This Trust Retirement Guide sets out detailed information on the options you have for retirement savings. It will help you create the retirement plan that works best for you.

Alternatively, you can transfer your benefits to an alternative pension scheme of your choice.

If you have any queries, comments or suggestions, please let us know so that we can continue to improve the Trust for your benefit. We hope that you find this Trust Retirement Guide helpful.

Yours sincerelyThe Trustees

Welcome to your Trust Retirement Guide

You have the flexibility to decide when and how to use your retirement savings.

Contents

1. Your choices 1

2 Flexible Income – Access your benefits when it suits you 3

3. Stay invested and take an income 5

4. Withdraw all of your benefits as a cash lump sum 7

5. Guarantee your income (buy an annuity) 9

6. Protection for your Dependant(s) 10

7. Bring your pensions together 11

8. My Account - Manage your benefits online 12

9. Retirement – Where do I start? 13

10. Guidance, support and advice 14

11. Glossary 15

About this Trust Guide:This guide outlines the retirement benefits available from the Trust and explains how the Trust is managed by the Trustees. Your benefits will always be determined under a governing document called the ‘Trust Deed and Rules’, copies of which are available on request. In case of any discrepancies between this Trust Retirement Guide and the governing document, the Trust Deed and Rules will prevail. Any reference to taxation and legislation in this guide is based on the Trustees understanding at the date of this booklet.

Materials providedThis guide is one of four items that together explain how the Trust works. Please read them all:1. Trust Benefit Summary2. Trust Guide 3. Trust Investment Guide4. Trust Retirement Guide.

Other formats for ease of reading

Please contact the Trust Administrators – contact details are available in the Trust Guide.

1. Your choices

You have the flexibility to decide what you would like to do with your Personal Account savings. The Trust offers you access to the following full range of flexibilities:

The Capgemini UK Pension Trust 1

Option 1 – Do Nothingn You don’t have to use your Personal Account savings now.

They can remain invested until you decide to start using them.

Option 2 – Stay invested and take an incomen You can leave your Personal Account savings invested

and take an income from them. This is known as Flexi Access Drawdown.

n You decide the size of income and how often to take it.n Typically you’ll have to pay tax on the income you take,

at your highest marginal rate.n You can take 25% of your savings as tax-free cash if

you wish.

Option 3 – Withdraw cashn You can take part or all of your retirement savings as

a cash lump sum.n Typically, the first 25% of the amount you take in cash

is tax-free, and the rest is taxed at your marginal rate. This is known as an Uncrystalised Funds Pension Lump Sum (UFPLS).

n You can choose to take the tax-free part of your savings only.

Option 4 – Guarantee your incomen You can buy a guaranteed income (called an annuity) with

some or all of your retirement savings. You can guarantee your income for life, or for a specific length of time (e.g. 5 years).

n There are many different types of annuities that offer different features depending on your preferences, health and lifestyle.

n Income from an annuity is taxed at your marginal rate.

Option 5 – A combination of options 2, 3 and 4n You can choose any combination of options that suits you.

If this interests you, see page 5





You can choose one option, or a combination of options 2, 3 and 4. Splitting your retirement savings across more than one option could help you to develop a retirement plan that is best suited to your needs.

You don’t have to use all of your savings at the same time. You could use some of them now (for example take some cash), and keep the rest invested and decide what to do with them later on.

You may have pension benefits that you have built up in other arrangements that do not offer you the flexibility available to you in the Trust, as set out above. Combining all of your pension funds into the Trust may be of benefit to you.

Further details are set out on page 11.

2. Flexible Income - Access your benefits when it suits you

From the age of 55, you are able to access part or all of your benefits from the Trust. You have total control over how and when to use your pension savings. You can:

n Withdraw the money as one or more lump sums - a quarter of your total savings will be tax-free.

n Use some or all of your money to secure an Annuity - this is an insurance policy that guarantees to pay you a regular income for life.

n If you wish, you may withdraw benefits whilst continuing to work.

n You can model different benefit options and retirement ages using the online tools in My Account. Simply login at www.capgeminiukpensiontrust.co.uk.

You don’t have to start using your Personal Account benefits until it suits you. Your Personal Account savings can remain invested in the Trust until you decide to start using them.

However, please ensure that you let us know when you think you will want to access your benefits by selecting your Target Retirement Age via My Account. This will enable the Trustees to contact you nearer the time you want to access your benefits.

At all times, you should consider how your Personal Account is invested.

The table below compares your retirement options:

Please note, you can choose any combination of the above you wish.


Flexible Income(drawdown)

7

3

3

Will I get a guaranteed income for life?

Can my money grow?

Can I access my money if I need to?

Fixed Income(annuity)

3

7

7

Take Cash

7

3

3

Leave it for now

7

3

3

http://www.capgeminiukpensiontrust.co.uk


Examples of how flexible income can create financial freedom in your retirement

Do more in early retirementTake more of your money at the start of your retirement and do the things you enjoy. As you get older you might find you need to spend less.

Retire early or go part-timeIf you have pensions elsewhere you could retire early or go part-time by taking a flexible income from your pot, before your main pension starts.

Change to a fixed income anytime Start with a flexible income. Then when you reach a later age, say 75, you could buy a fixed income giving you a guaranteed income for the rest of your life.

Balance of peace of mind and flexibility You could use some of your pension savings to secure a fixed income to cover the essentials such as bills and living costs then use the flexible income to cover life’s extras.

Taking a flexible income and fixed income could offer a good balance of peace of mind and the flexibility to adapt to life’s changes.

As we’re all aware, your circumstances can change at any time. With flexible income you can adapt your income to meet your changing situation.


3. Stay invested and take an income

You can access your Personal Account as one or more cash lump sums.

You have 2 options:

I. Take your tax-free cash as one or more lump sums. Leave the rest invested and take an income (a Flexi Access Drawdown) If you select this option you can take 25% of your savings as tax-free cash and then decide to receive a series of taxable payments, either straight away or from a later date. After having taken your tax-free cash lump sum, you can leave your Personal Account savings invested within the Trust and withdraw some or all of it at a later date. Typically, you will have to pay tax on the income you receive, at your marginal rate. You can choose to receive payments on either a regular basis (e.g. monthly), or as required

II. Withdraw your Personal Account as one or more cash lump sums, 25% of each payment being tax-free If you select this option you can take your savings as one or more cash lump sums. Typically, you will have to pay tax on 75% of each payment you receive, at your marginal rate. If you do not withdraw all of your Personal Account, you can leave your savings invested within the Trust and withdraw some or all of it at a later date.

You are in controlThere are no maximum or minimum limits on deciding how much income you can take - you decide the size of your income and how much to take. You can change your decisions (e.g. increase or decrease your income) when it suits you.

It is important to note that with this option, you manage how much income you can afford to take. If you take too much income, you may deplete your savings and have to reduce your income in the future. This may also affect any means-tested state benefits that you may be entitled to.

How much income to take and whenDeciding how much income to take will depend upon:

n How long you wish to receive an income for You may decide to receive your income in one go or over a set period of time. Alternatively, if you wish to receive your income for the remainder of your life, you will need to consider that the longer you live, the more risk there is that your savings could run out.

n Investment fund performance If your funds perform badly, your retirement savings may fall in value. If your funds perform well, this can give your savings a boost

n Whether you want to pass on your savings to your beneficiaries The more you want to pass on, the less you can take.


Advantages of flexible income

Potential for your pension to growThe invested part of your pension will have the opportunity to grow. You could benefit from future stock market growth free from UK income and capital gains tax.

Flexibility You can keep your options open and take an income as and when you need it.

Pass on your wealth You can pass on what’s left in your pot to your loved ones, usually free of inheritance tax, when you die.

Investment choice You’ll be in control.

Things to think about

No guarantees You could run out of money if your investments perform poorly, you withdraw too much or you live longer than expected. Remember your income stops when your money runs out so you need to consider the longer-term impact of making withdrawals from your pot because you could run out of money before you die.

Payments into any pension could be restricted If your Personal Account is worth more than £10,000, and you take and you receive any taxable income, either as a cash lump sum (Option 3) or drawdown payment (Option 2), the maximum you can contribute and still receive tax relief from this point forward may be reduced to £4,000 p.a. This can be a problem if you’re still earning and either have other savings you want to pay into a pension or if you intend to make significant payments into any of your pensions.

You’ll need to be hands-on You’ll need to regularly review your investments and may need financial advice.

State benefits could be affected Your entitlement to means-tested state benefits, if applicable, may be affected if you take cash or income from your pension – check this isn’t going to be a problem before going ahead.

You can take all of your Personal Account benefits as a cash lump sum. Typically, 25% of the payment will be paid tax-free, with the balance subject to your marginal rate of tax.

This option may seem attractive but it must be considered carefully. It all depends on your circumstances. You have debts to pay off, for example, a mortgage. However, you should think carefully about how much you withdraw, as you could face the risk of running out of money at some point during your retirement.


4. Withdraw all of your benefits as a cash lump sum

The tax implications of withdrawing cash can be significant. Depending on how much you take from your savings, and other income you might also be receiving at the time, you could end up paying significantly more income tax.


Understanding marginal rate of taxThe marginal rate of tax means you pay different rates of tax on different portions of your earnings. Your earnings include your salary and any other income you receive, such as income from an annuity or drawdown pension and any cash you take over the tax-free allowance (typically 25% of your savings).

Most people have a personal allowance of £11,500* a year, which is the amount that can be earned without paying any income tax. Thereafter you pay tax at the applicable rate on all of the income above the personal allowance as follows:

Income Tax rateUp to £11,500* 0%£11,501 - £45,000 20%£45,001 - £150,000 40%Over £150,000* 45%

* For someone earning over £100,000 the personal allowance decreases from £11,500 by £1 for every £2 earned until it reaches zero. So, for people earning £123,000 the personal allowance is zero

If your total income puts you in the 40% tax bracket, you actually pay 40% tax on the taxable income you receive between £45,001 and £150,000. For the rest you only pay tax at the rate of 20% or 0%.

If your salary is £30,000, you’re not a higher rate tax payer. But if you choose to take more than your tax-free allowance from your pension account (e.g. £30,000), your total income would now be £60,000. So, you’ll pay 40% on most of the money you take out of your Personal Account.

Understanding the impact of drawing benefits on future pension savingsIf you choose to receive a Flexi Access pension (Option 2) or a taxable cash lump sum (Option 3) and plan to make further contributions, it is important to consider the following:

n If your Personal Account is worth less than £10,000, you will be able to take the full amount as cash under the small pots rule and your future contributions may not be restricted. If you have more than one pension account worth less than £10,000, you may be able to apply this rule to up to three accounts.

n If your Personal Account is worth more than £10,000, and you take and you receive any taxable income, either as a cash lump sum (Option 3) or drawdown payment (Option 2), the maximum you can contribute and still receive tax relief from this point forward may be reduced to £4,000 p.a.This may be particularly relevant to you if you’re still working.


You can buy a guaranteed income from the annuity provider of your choice with some or all of your Personal Account savings.

An Annuity is a product offered by insurance companies that pays you an income for life, or for a set period of time, that is taxable at your marginal rate

There are various options you can choose when you set up your Annuity to give you greater flexibility over your future income that:

n Benefits your spouse, Civil Partner or other Dependants if you die before them;

n Pays out for you alone;

n Remains at a constant amount each year ;

n Keeps track with inflation; or increases by a fixed amount each year ;

n Pay you an income for the remainder of your life;

n Pay you an income for a set period of time;

n Guarantees to be paid for a minimum of five or ten years, even if you die before then;

n Investment linked annuities that pay an income based on the investment performance of the annuity.

The difference between the best Annuity and the worst can be significant, as illustrated in the table below:

* An impaired Annuity is for those whose life expectancy is shortened due to an illness.

The Trust’s retirement service will review the Annuity market to enable you to choose a suitable, competitive and secure income for life and will set up your Annuity on your behalf. In addition, if you smoke, or suffer from one or more ailments, you could be entitled to extra income in retirement by purchasing an impaired Annuity, which the retirement service can confidentially assist you with. Details of the retirement service can be accessed via the Trust website www.capgeminiukpensiontrust.co.uk.

5. Guarantee your income (buy an annuity)Re

tirem

ent I

ncom

e (£

)

WorstAnnuity

BestStandardAnnuity

SeriouslyImpaired*Annuity

SmokerAnnuity

Impaired*Annuity

+30%

+45%

+60%+67%



In the event of your death, the value of your Personal Account as at the date of death will be paid to your Dependant(s) or nominated beneficiaries by the Trustees at their discretion. Any tax deducted will depend upon your age at death:

n If you die before age 75 - the cash will be paid as one or more tax-free lump sums.

n If you die at or after age 75 - the cash would be taxed at your beneficiary’s marginal rate of income tax.

If your beneficiary in turn dies before using up the whole value of your Personal Account, any balance will pass to their beneficiaries.

6. Protection for your Dependant(s)

Nomination of Beneficiary FormWhen you join the Trust we encourage you to complete a Nomination of Beneficiary Form and keep it up to date as the years go by. This way the Trustees will know exactly who you want the money to go to - and how to find them.


Bringing all your pension savings together in one place could be a good idea. You could cut the fees you pay and make it easier to keep track of your total retirement pot, however we stronglyrecommend you seek independent financial advice before making any decisions.

FlexibilityFrom the age of 55, you will be able to access part or all of any benefits you transfer into the Trust. You will have complete control over how and when to use your pension savings. This flexibility may not be available in other pension arrangements. Combining all your pension benefits into the Trust may allow you to access this flexibility.

CostsIf you have several different pension arrangements, each one could cost you a significant amount in administration fees over time.

By transferring all or some of your pension benefits into the Trust, you may be able to save money by paying one set of low fees. You will be able to use the easy to use investment andretirement planning tools of the Trust to help you manage all your pension benefits.

Transferring is easyTransferring investments from other pension arrangements into the Trust is easy. As soon as we receive your Transfer-in form, available from the Trust website www.capgeminiukpensiontrust.co.uk, we’ll contact your previous pension arrangement, arrange the transfer and tell you when it’s done. You can transfer benefits into the Trust from either a defined benefit (sometimes known as ‘final salary’) or defined contribution (sometimes known as ‘money purchase’) scheme.

See how a transfer-in can help youYou can log onto My Account and use the Trust’s modeller to see how much extra retirement pension you may receive by transferring pension benefits into your Personal Account.

Consolidating other pensions won’t be right for everyone. There are a number of points toconsider, as you could be losing money by giving up any valuable guarantees or benefits from your other pensions. If your other pension(s)provide an income guarantee (for example a final salary pension) that is worth more than £30,000 then you must take financial advice to ensureyou understand the process. Please check if this will apply to any pension you are thinking of transferring. There is also no guarantee that you will get more as a result of consolidating.

7. Bring your pensions together



If you have access to the Internet, you can view and manage your Personal Account using the Trust’s secure online service called My Account. My Account gives you access to interactive modellers that will help you to target your desired benefits, or else model the various benefit options available to you. These tools are accessible by desktop, tablet or smart phone via www.capgeminiukpensiontrust.co.uk.

My Account will help you to:

Get on trackUnderstand what you’ve got and what you’ll need for the retirement you want.

Check your investmentsInvestments have the potential to fuel your pension growth. My Account enables you to regularly review your investments to ensure your pension has the best opportunity to grow.

You can use My Account to alter your investment choices, amend your target retirement age, check if your savings are on track, and do “What if?” calculations to help you plan for the future

Work out how much you’ll need in retirementIt is important to think about how much money you’ll need to last you for the rest of your life. My Account will help you think about how much income you’re likely to receive in each year and how many years you’ll need it to last for.

Understand your optionsIf you’re aged 55, you can make income withdrawals from your pension as and when you want.

My Account will help you understand the options available to you:

n Cash lump sum

n Regular income and leave the balance invested

n Purchase an Annuity

n Do nothing and leave the money for your dependants.

My Account also gives you access to:

n The powerful planning tools - and other information that will help you understand and consider all the important aspects of achieving a better retirement outcome for you.

n Personal details - your name, National Insurance (NI) number, date of birth, the date you joined the Trust, your target retirement age and whether or not we hold a completed nomination form for you and, if so, the date it was received.

n Savings and investment details - a summary of your total savings (total Personal Account fund value), your contribution history, details of the investment funds linked to your savings and a full Benefit Statement history.

8. My Account - Manage your benefits online



1. Get on trackYou need to understand what you’ve got and what you’ll need for the retirement you want.

If you are a member of the Trust, log on to My Account and keep a watchful eye on your future income.

2. Get on top of debtBefore you can really start planning for the future, you could try to pay off any debts.

3. Bring your pensions togetherConsider consolidating your pension funds together in one place could be a good idea. You could cut the fees you pay and make it easier to keep track of your total retirement pot (see page 11).

4. Check your investmentsInvestments have the potential to fuel your pension growth. You need to regularly review your investments to ensure your pension has the best opportunity to grow. Remember, the value of any investment can go up or down and may be worth less than was paid in.

5. Assess your State Pension

Check how much you will getIn addition to the benefits within the Trust, youwill still continue to earn benefits in the State Pension Scheme as well - but those benefits are less flexible. You can:

n Only take your State Pension at the normal State Pension Age, or

n Defer it until an older age - if so, you may get a higher State Pension as a result.

If you’re not sure how much State Pension you can expect, you can request a benefits forecast at: www.gov.uk/calculate-state-pension.

9. Retirement - Where do I start?

Apply for your State PensionAbout four months before you reach State Pension Age, you’ll receive a letter telling you how to claim your State Pension.

Consider delaying your State PensionYou may earn extra State Pension if you put off claiming your State Pension. The extra amount will depend on when you reach State Pension Age. Further details can be found by visiting www.gov.uk/state-pension.

Haven’t paid enough National Insurance contributions?If you haven’t paid National Insurance Contributions or received credits for the required number of qualifying years you won’t receive a full State Pension. You can pay voluntary National Insurance contributions to fill any gaps in your National Insurance record. Further details can be found by visiting www.gov.uk/state-pension.

6. Work out how much you’ll need in retirementYou need to start thinking about how much money you’ll need to last you for the rest of your life. Think about how much income you’re likelyto receive in each year and how many years you’ll need it to last for.

7. Understand your optionsIf you’re aged 55, you can make income withdrawals from your pension as and when you want. There are some exceptions to this which may mean you can access your money earlier.

8. GuidanceIt’s a good idea to seek guidance or advice to understand your options at retirement (see page 14).

http://www.gov.uk/calculate-state-pension.

http://www.gov.uk/state-pension

http://www.gov.uk/state-pension


10. Guidance, Support and Advice

Pension WisePension Wise is a government service that offers you:

n Tailored guidance (on-line, over the telephone or face to face) to explain what options you have and help you think about how to make the best use of your pension savings;

n Information about the tax implications of different options and other important things you should think about; and

n Tips on getting the best deal, including how to shop around.

The TrustThe Trust provides you with detailed information regarding your investment options to help you make the right choice for you.

From the age of 55 the Trust enables you to:

n Withdraw your benefits as one or more lump sums – a quarter of your total savings will be tax-free;

n Use some or all of your money to secure an Annuity – this is on insurance policy that guarantees to pay you a regular income for life;

n Withdraw benefits whilst continuing to work.

You don’t have to start using your Personal Account benefits until it suits you. Your Personal Account savings can remain invested in the Trust until you decide to start using them.

AdviceShould you require advice, the Trust has arranged a retirement service with Origen, a leading Independent Financial Adviser who specialises in retirement options and annuities. Origen can advise which retirement options are best for you.

If you prefer to use your own independent adviser that is fine. If you don’t already have one, please choose carefully. Not all advisers specialise in “what to do at retirement”. We recommend you use one that does. You can find details about advisers near you at www.unbiased.co.uk.

http://www.unbiased.co.uk


11. Glossary

Annual AllowanceIs the amount of contributions that can be made to your Personal Account each year and still receive tax relief.

This includes contributions to any other registered pension schemes. The Annual Allowance doesnot apply in your last year before death or ill health retirement. Further details can be obtained from the Trust website at www.capgeminiukpensiontrust.co.uk.

AnnuityIs an insurance policy that makes a series of payments at stated intervals, which may be subject to increases. The amount of pension received will be determined by the Annuity rate in force at the time of retirement i.e. the cost of buying the Annuity.

DependantMeans a person who is financially dependent upon the member.

HMRCMeans HM Revenue and Customs, which is responsible for the tax approval of pension schemes and taxation of contributions and benefits. Lifetime AllowanceIs the total fund value on which you can receive tax relief, as specified by legislation. Full details can be obtained from the Trust website at www.capgeminiukpensiontrust.co.uk.

My AccountYour secure on-line interactive pension planning system which provides you with access to your Personal Account details.

Normal Retirement AgeIs defined in your Trust Benefit Summary.

Personal AccountIs the fund that you build up containing your contributions, the Employer’s contributions, any pension benefits you may transfer in from a previous pension arrangement and investment returns.

State Pension AgeIs the date from which you can normally claim a State pension. Further details can be obtained from the Trust website at www.capgeminiukpensiontrust.co.uk.

State Pension SchemeIs the pension you receive from the government when you reach State Pension Age.

You will earn pension benefits under the State Pension Scheme in addition to the pension you will earn under the Trust.

Further details can be obtained from the Trust website at www.capgeminiukpensiontrust.co.uk.

Target Retirement AgeThis Target Retirement Age will be used to determine the date at which you start your benefit alignment phase if you elect to invest in a Lifestyle Strategy.

TrustMeans the Employer’s section of the National Pension Trust. The Trust is legally constituted by the Trust Deed and Rules. It is administered by the Trustees. The Trust is a registered pension scheme under the Finance Act 2004. The Trust and its assets are kept entirely separate from the Employer’s assets.






Trust Benefit SummaryThe document which sets out details relating to your Trust eligibility and the contributions that will be paid by you and the Employer on your behalf to the Trust.

Trust GuideThe document which sets out details of the benefits of the Trust and how it is managed on your behalf by the Trustees.

Trust Deed and RulesIs the governing document that sets out the specifications of the Trust.

If there is any discrepancy between this Trust Guide and the Trust Deed and Rules, the latter will override.

Trustees The Trustees are responsible for the day to day running of the Trust in accordance with the Trust Deed and Rules, including responsibility formaking sure that the agreed contributions are paid into the Trust and the ongoing stewardship in respect of the money held in the Trust.

Trust Investment GuideThe document which sets out details relating to the investment options available to you via the Trust.

Trust Retirement GuideThe document (this guide) which sets out details relating to how you may access your benefits from the Trust.

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