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The Plan has a range of funds in which you can invest your retirement savings. Each fund has costs and charges for investing your savings which vary. The information in this section will help you understand these costs and charges and what they mean for your retirement savings.

  • Why are investment costs and charges important

    Over time, investment costs and charges could have a noticeable impact on the value of your retirement savings, so it’s important to understand how they work – and what you’re getting for your money.

    You can think about fund charges like a wine list – cheapest doesn’t mean bad and the most expensive, however fine it is, may not suit you. So whilst it’s important to understand investment costs and charges and how much you might pay, they’re just one of the things you should think about when deciding how to invest your retirement savings.

  • What are the charges and costs?

    The Trustees are required to set out the on-going charges incurred by members in this Statement, which are annual fund management charges plus any additional fund expenses, such as custody costs, but excluding transaction costs); this is also known as the total expense ratio (“TER”). The TER is paid by the members and is reflected in the unit price of the funds. The stated charges also include investment administration costs since members incur these costs.

    The Trustees are also required to disclose the level of any transaction costs. These are incurred when the Scheme’s investment managers buy and sell assets within funds, but are exclusive of any costs incurred when members invest in and switch between funds.

    The charges and transaction costs have been supplied by Standard Life. When preparing this section of these statement the trustees have taken account of statutory guidance.

    1.1. Default arrangement

    The default arrangement is the Flexi-access Lifestyle Strategy. The default arrangement has been set up as a lifestyle approach, whereby members’ assets are automatically moved between different investment funds as they approach their retirement date. Therefore, the level of charges and transaction costs vary according to each member’s proximity to retirement and the underlying funds they are invested in.

    For the period covered by this Statement, annual charges and transaction costs are set out in the table below.


    Default arrangement charges and transaction costs

    Years to retirement Annual charge (%) Transaction costs (%)
    10 years to retirement 0.71 0.08
    5 years to retirement 0.72 0.09
    At retirement 0.72 0.08

    1.2. Self-select options

    In addition to the default lifestyle, members also have the option to invest in one other lifestyle, targeting annuity purchase at retirement. The annual charges for this lifestyle during the period covered by this Statement are set out in the table below.


    Alternative lifestyle charges and transaction costs

    Years to retirement Annual charge (%) Transaction costs (%)
    10 years to retirement 0.65 0.05
    5 years to retirement 0.57 0.04
    At retirement 0.36 0.00

    The level of charges for each self-select fund (including those used in the default arrangement) over the period covered by this statement are set out in the following table. The underlying funds used within the default arrangement are shown in bold. Some transaction costs are negative due to the calculation method used.

    • Self-select fund charges and transaction costs
      Manager – Fund name Annual charge (%) Transaction costs (%)
      Overseas Tracker Fund 0.36 -0.04
      FTSE Tracker Pension Fund 0.36 0.00
      Vanguard FTSE All Share Index Fund 0.37 0.00
      Global Equity 50:50 Tracker Fund 0.36 0.03
      Managed Fund 0.37 0.04
      Deposit and Treasury Fund 0.36 0.00
      Global Absolute Return Strategies 0.94 0.06
      Mixed Bond Fund 0.36 0.02
      Property Fund 0.38 0.17
      Index-Linked Bond Fund 0.36 0.00
      JP Morgan Emerging Markets Fund 1.19 0.25
      Ethical Fund 0.36 0.11
      BlackRock Gold & General Fund 1.32 0.00
      Corporate Bond Fund 0.36 0.00
      Dresdner Kleinwort Diversified Bond Fund 0.59 0.07
      Dresdner Kleinwort Diversified Growth Fund 1.05 0.13
    • Illustration of charges and disclosure costs

      The following table sets out an illustration of the impact of charges and transaction costs on the projection of an example member’s pension savings.

      • The “before costs” figures represent the savings projection assuming an investment return with no deduction of member borne fees or transaction costs. The “after costs” figures represent the savings projection using the same assumed investment return but after deducting member borne fees and an allowance for transaction costs.
      • The transaction cost figures used in the illustration are those provided by the managers over the year, subject to a floor of zero (ie the illustration does not assume a negative cost over the long term).
      • The illustration is shown for the default option (the Flexi-access Lifestyle Strategy) since this is the arrangement with the most members invested in it, as well as four funds from the Plan’s self-select fund range. The four self-select funds shown in the illustration are:
        • the fund with the highest before costs expected return – there are multiple funds that have a before costs expected return of 4.0% above inflation but for the purpose of this illustration, the Standard Life Global Equity 50:50 Tracker Pension Fund has been used.
        • the fund with the lowest before costs expected return – this is the Standard Life Deposit and Treasury Pension Fund.
        • the fund with highest annual member borne costs – this is the Standard Life BlackRock Gold & General Fund.
        • the fund with lowest annual member borne costs – there are multiple funds that have the lowest costs (0.36%) but for the purpose of this illustration, the Standard Life Overseas Tracker Pension Fund has been used.
      Default Option SL Global Equity (50:50) Tracker Pension Fund SL Deposit and Treasury Pension Fund SL BlackRock Gold & General Fund SL Overseas Tracker Pension Fund
      Year invested Before costs After costs Before costs After costs Before costs After costs Before costs After costs Before costs After costs
      1 £12,400 £12,300 £12,600 £12,600 £12,000 £12,000 £12,600 £12,500 £12,600 £12,600
      3 £17,500 £17,200 £18,100 £18,000 £16,100 £15,900 £18,100 £17,600 £18,100 £18,000
      5 £22,800 £22,200 £24,100 £23,800 £20,000 £19,800 £24,100 £23,000 £24,100 £23,800
      10 £37,300 £35,400 £41,200 £40,200 £29,600 £28,900 £41,200 £37,800 £41,200 £40,300
      15 £53,700 £49,800 £62,100 £59,800 £38,700 £37,400 £62,100 £54,600 £62,100 £60,000
      20 £72,200 £65,500 £87,500 £83,200 £47,300 £45,400 £87,500 £73,900 £87,500 £83,500
      25 £93,200 £82,500 £118,400 £111,100 £55,500 £52,800 £118,400 £95,900 £118,400 £111,700
      30 £117,000 £101,100 £156,000 £144,400 £63,300 £59,800 £156,000 £121,000 £156,000 £145,400
      35 £139,400 £117,600 £201,700 £184,200 £70,800 £66,300 £201,700 £149,700 £201,700 £185,700
      40 £154,900 £127,400 £257,300 £231,700 £77,800 £72,300 £257,300 £182,400 £257,300 £233,900
    • Notes to costs and charges illustrations

      The following table sets out an illustration of the impact of charges and transaction costs on the projection of an example member’s pension savings.

      • Projected pension pot values are shown in today’s terms, and do not need to be reduced further for the effect of future inflation.
      • Inflation is assumed to be 2.5% each year.
      • The starting pot size used is £10,000, which is this is broadly representative of a young member.
      • The starting salary is assumed to be £27,000, which is the UK average.
      • Salaries could be expected to increase above inflation to reflect members becoming more experienced and being promoted. However, the projections assume salaries increase in line within inflation to allow for prudence in the projected values.
      • Contributions are assumed to be 8.0% per year, based on the minimum contributions to workplace pension schemes to be auto-enrolment compliant from April 2019, taking into account an employer contribution of 3%.
      • Values shown are estimates and are not guaranteed.
      • The projected annual returns used are as follows:
        • Default option: 2.5% above inflation for the initial years, gradually reducing to a return of 0.2% above inflation at the ending point of the lifestyle.
        • Standard Life Global Equity 50:50 Tracker Pension Fund - 4.0% above inflation
        • Standard Life Deposit and Treasury Pension Fund - 1.0% below inflation
        • Standard Life BlackRock Gold & General Fund - 4.0% above inflation
        • Standard Life Overseas Tracker Pension Fund - 4.0% above inflation
      • No allowance for active management has been made.