Nest presentation 2015
- 1. Alzheimer Scotland Your Retirement and Life Assurance Provision 19 May 2015
- 2. Agenda Retirement Life Assurance
- 3. Retirement – Sources of Income Retirement Income State Pension Benefits Pension Funds Other savings/income
- 4. Saving for retirement – essential questions 1. What if I don’t save for retirement? 2. When do I want to retire? 3. How do I want to live in retirement? 4. Will I be able to retire? 5. Can I, and do I want to save for retirement?
- 5. What if I don’t save for retirement? Retirement Income State Pension Benefits £0 £0
- 6. When? Male or female When were you born No earlier than State Pension Age How much? Number of years you have paid National Insurance Contributions (NIC) www.gov.uk/calculate-state-pension Key questions and where to get the answersState Pension Benefits
- 7. Alzheimer Scotland NEST Pension Plan Benefits – When & What? Contributions – How much? Investment – Which fund(s)?
- 8. Benefits - When? Earliest date you can take your Alzheimer Scotland Pension Plan benefits: Currently age 55 Increasing to 57 from 2028 Thereafter, no earlier than 10 years before State Pension Age Selected Retirement Date You choose – if not, default dare is your State Pension Age Annual Plan statement benefits projection Sets date for Retirement Date Fund investments 8
- 9. Benefits – What? Your Alzheimer Scotland Pension Fund Cash 25% tax -free + Pension Cash 25% tax- free + 75% taxable Drawdown – each payment 25% tax-free, 75% taxable Pension Cash -25% tax-free + taxable drawdown
- 11. Contributions - How it works? NEST Employer Contribution Employee Contributions (x80%) Tax Relief (20%)
- 12. Contribution Structure Employer Contribution Employee Contributions (x80%) Tax Relief (20%) Dates Employer Contribution (% of qualifying earnings) Your Minimum Contribution (% of qualifying earnings) Enrolment date to 30 September 2017 1% 1% 1 October 2017 – 30 September 2018 2% 3% 1 October 2018 onwards 3% 5% Qualifying Earnings - All monthly earnings between £486 and £3,532 (2015/16 tax year)
- 13. Your Contributions – How tax-relief works Net Pay Gross Pay £1,000 Tax £23.33 NI £39.40 Employee pension contribution (Qualifying earnings = £1,000 - £486 = £514 x 1% X 80%) £4.11 Net Pay £933.16 Employee pension contribution £4.11 Tax relief 20% added by NEST £1.03 Employer pension contribution + £5.14 Total pension contribution £10.28 Example: Earns £1,000 per month with 1% contribution of qualifying earnings Higher tax payers claim relief through self assessment + Employer contribution is 1% of qualifying earnings Based on tax and NI rates for the 2015/16 tax year
- 14. Key questions and planning support 1. When - Am I saving enough? 2. Lifestyle - Am I saving enough? 3. Ability - Am I saving enough? 4. Capability – Can I/will I save enough?
- 15. Investment - Options 1. Default Investment Option NEST Retirement Date Fund. Based on your State Pension Age (or your selected NEST retirement date) 2. Select your own funds Five alternative funds available from NEST
- 16. Investment – Plan Default Option The Retirement Date funds work in three phases: Phase Objectives Years to Selected Retirement Age (approximate) Foundation • Preserve fund value and keep pace with inflation • Reduce likelihood of extreme investment shocks • Target long-term volatility average of 7% >40 Growth • Target investment returns of inflation + 3%, net of charges • Take sufficient investment risks whilst reducing likelihood of extreme investment shocks • Target long-term volatility average of 10-12% <40 >10 Consolidation • Gradual move to annuity-tracking and cash like investments • Reduce likelihood of investment shocks • Reduce volatility <10
- 17. Investment – Alternative funds you can choose Fund Anticipated Volatility Range Lower Growth Fund 0 – 0.5% Pre-Retirement Fund 2 – 5% Ethical Fund 10 – 15% Sharia Fund 15 – 25% Higher Risk Fund 15 – 25%
- 18. Plan Charges Annual Fund Management Charge – 0.30% Contribution Charge – 1.80%
- 19. Investment & Administration – NEST Online Services Access individual account details and update View contributions Valuation of your policy Switch funds Update nominated beneficiaries Registration process: https://www.nestpensions.org.uk/schemeweb/NestWeb/faces/secur e/USER_REG/pages/activateYourAccount.xhtml Follow online instructions 19
- 20. Planning For Your Retirement – Summary Considerations www.gov.uk/calculate-state-pension Individual annual benefit statement Previous employers pension schemes or individual pension policies www.pensiontracingservice.com Other savings and/or income available on retirement ? 20 State Pension Benefits Your Alzheimer Scotland Pension Fund Other Pension Funds Other Savings/Income
- 21. What happens if….I die before taking my retirement benefits? Your fund returned to your nominated beneficiary(ies) as a tax free lump sum Update nominated beneficiary via NEST online access, or complete the return nomination form included in Welcome Pack from NEST No completed nomination – NEST normally pay your fund to person looking after your financial affairs on death Change of personal circumstances/nomination - Inform NEST to ensure your funds are distributed in line with your wishes. 21
- 22. What happens if….I leave Alzheimer Scotland? Options available: 1. Continue to make personal contributions to the Plan (minimum £10 each time) 2. Suspend contributions and restart later 3. Make no further contributions and leave funds invested until you take benefits You will not be entitled to a refund of contributions if you leave the Plan. You are currently unable to transfer your fund elsewhere unless aged 55 or over (to be removed 1 April 2017). 22
- 23. Life Assurance Insurer Aviva When am I eligible? All permanent employees aged 16 – 75 When can I join? On commencement of employment How do I join? Automatically included What do I pay? Nothing, full cost met by Alzheimer Scotland Benefit Lump sum = 3 x your earnings (before salary exchange) subject to a minimum of £5,000 Contract workers – annual basic salary Seasonal – total earnings declared in tax year before death When is it paid? In the event of your death as a permanent employee of Alzheimer Scotland Who is this paid to? Your nominated beneficiaries, at Trustees discretion Is this a taxable benefit? No, exempt from Inheritance Tax When does cover cease? Earlier of employment ceasing with Alzheimer Scotland or attainment of age 75
- 24. Life Assurance – Nominating Your Beneficiaries Trustees – Alzheimer Scotland Trustees discretion to whom benefit payable = exempt from Inheritance Tax Nomination Form available from Trustees Completion supports payment of benefits with minimum delays Complete updated form if circumstances/wishes change 24
- 25. Questions ?
- 26. Disclaimer The contents of this presentation are confidential and not for onward distribution. Disclosure to third parties cannot be made without the prior written consent of Mazars Employee Benefits Limited. The information presented does not constitute advice. It is based on our current interpretation of UK legislation and HMRC practice at the date of production. This may be subject to change in the future and any tax rates or reliefs may be altered. Professional advice should be sought prior to making any decision and Mazars Employee Benefits Limited will not accept responsibility for decisions taken solely on the basis of the information presented. Some services offered by Mazars Employee Benefits Limited are not regulated by the Financial Conduct Authority. Mazars Employee Benefits Limited is an Appointed Representative of Mazars Financial Planning Limited which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No. 03893679 with its registered office at Tower Bridge House, St Katharine’s Way, London, E1W 1DD. Mazars Employee Benefits Limited and Mazars Financial Planning Limited are both wholly owned subsidiaries of Mazars LLP, the UK firm of Mazars, an integrated international advisory and accountancy organisation