Your decision is important and will help the court decide if the Scheme should be approved. Please tell us what you think by 12pm on 19 October 2018.
We recently wrote to you with our formal offer which affects some of your pension scheme member(s).
We’re asking you to make a choice on their behalf:
- Keep the GAR so that when your pension scheme member retires, they’ll receive the substantial benefit of the GAR if you buy an annuity on their behalf through us, or
- Give up the GAR in return for an immediate and substantial increase to your pension scheme member’s retirement savings.
Full details of our offer can be found in the documents we sent you.
The pack includes key information on the offer, why we‘re making it, the process we’re following and how you can tell us your decision. You can find sample copies of some of the documents we enclosed in the pack below. Please read them carefully.
What do I need to do?
You should speak to your pension scheme member and ask them to tell you their decision.
You should ask your pension scheme member(s) to let you know whether they would like you to keep the benefit of the GAR or exchange the GAR for an increase to their retirement savings. We understand this is a really important decision, so both you and your pension scheme member(s) should take the time to read their documents carefully and take any guidance or financial advice you need.
Remember, you don’t have to make the same choice for each pension scheme member. This way you can take into account each of their individual circumstances.
You’ll need to tell us your decision online or by post by 12pm 19 October 2018, or in person at the planholder meeting which will be held at 11am on Tuesday 23 October 2018 at Amba Hotel Charing Cross, Strand, London, WC2N 5HX.
What happens next?
If the necessary majority of planholders vote for the Scheme, we’ll ask the court to approve it at a sanction hearing on 12 November 2018. If the court gives it s approval we expect to increase the retirement savings of planholders to whom the Scheme applies in return for the removal of the GAR on 7 December 2018.
If you have any questions see our FAQs below or call us on 0345 521 0046.
You can find more detail about the terms of the proposed Scheme from the following documents.
- Independent Actuary Report
- With Profits Actuary Report
- Chief Actuary Report
- The Scheme document
- Legal Notice of the Planholder meeting
- Royal London's latest audited accounts and financial statements
- Principles and Practices of Financial Management (PPFM)
About our offer
You can expect to receive your formal offer pack by early August. If you haven't received this by mid-August you should contact us on 0345 521 0046.
We want you to have more flexibility to take your retirement benefits in a way that suits you, without losing all of the value of the GAR.
We appointed an Independent Actuary to review the scheme and report to the court on whether he thought the offer was fair to planholders. The Independent Actuary concluded that the offer is fair and the High Court gave us permission to make the offer.
The offer is not necessarily right for all planholders as it will depend on each individual’s personal circumstances. It's important you and your scheme member(s) consider whether the offer is right for them or not.
The following types of plans are covered by the Scheme:
- Personal Pension Plans branded as Talisman and taken out with Scottish Life between 1 June 1985 and 30 June 1988 (these are sometimes referred to as retirement annuity contacts and we refer to them as ‘Talisman Retirement Annuity Contracts’)
- Personal Pension Plans branded as Talisman and taken out with Scottish Life between 1 July 1988 and 1 February 1992 (we refer to these as ‘Talisman Personal Pension Plans’)
- Group Personal Pension Plans branded as Talisman and taken out with Scottish Life by employees between 1 July 1988 and 1 February 1992 as part of the benefits provided by their employer (we refer to these as ‘Talisman Group Personal Pension Plans’)
- Executive Pension Plans branded as Talisman or Hallmark and originally taken out with Scottish Life by the trustees of an occupational pension scheme between 1 June 1985 and 1 November 1989 (we refer to these as ‘Talisman Executive Pension Plans’)
We strongly recommend you get financial advice.
The only way to be sure that you'll not be affected by the terms of the Scheme, and therefore avoid the potential, negative impact on your lifetime allowance is to opt-out by post, or online by 12pm on 19 October 2018, or in person at the planholder meeting on 23 October 2018.
Each illustration provided in your pack, shows the retirement savings value held under the plan at the illustration date quoted, and what this could increase to if the uplift were to be applied immediately. Where applicable, we've also shown a comparison of the projected plan value at your scheme member’s chosen retirement date if you keep the GAR vs. if you accept our offer.
Although your scheme member’s retirement savings could be increased by the uplift, the GAR typically offers a greater rate of income than they would otherwise get by purchasing a standard annuity. We've shown different combinations of cash and income that might be available at retirement if the GAR was to be used or you accept our offer. We’ve also shown combinations of cash and income that might be available at retirement if you don’t accept our offer and the GAR isn’t used.
We've used some assumptions to produce the figures in the illustration. More detail is given in the personalised illustration. This means your scheme member’s retirement benefits at the point of retirement could be higher or lower than what we've shown in the illustration.
Please also be aware that the actual annuity rates offered when your scheme member reaches retirement may be higher or lower than illustrated, and will depend on interest rates and assumptions around how long people are expected to live in retirement.
Things to do and think about
Yes. Whether you’re close to retirement or years away from it, we’re asking you to make a choice now.
You have these options:
- If you want to be sure your pension scheme member will keep the benefit of the GAR, you should opt them out of the Scheme.
- If you want to give up the GAR for a pension scheme member in exchange for an increase to their retirement savings, you should vote for the Scheme.
You may also vote against the Scheme. However, if you do so and the Scheme goes ahead anyway, the GAR will be removed and we will enhance your pension scheme member’s retirement savings.
You need to tell us your decision by post or online by 19 October 2018 or in person at the planholder meeting on 23 October 2018 which will be held at Amba Hotel Charing Cross, Strand, London WC2N 5HX at 11am.
We would expect you to discuss our offer with your affected pension scheme member(s) and take their views into account. You can choose to opt out, vote for or vote against the Scheme.
If you have more than one affected pension scheme member, you can make decisions in different ways for different members. This way you can take into account the individual circumstances of each member rather than having to make a decision that applies to all of them.
We summarise some of the things we think your pension scheme member(s) should consider in Part A of your planholder circular, but these are only indicative.
If you vote for or against the Scheme, and the Scheme goes ahead, the minimum percentage increase stated in the illustration is the minimum percentage increase that we would apply to the GAR-eligible savings in the plan at the illustration date.
Yes, if your pension scheme member is age 55 or over.
If you ignore this very important communication and the Scheme is approved, any GARs covering your affected pension scheme member(s) will be removed and the relevant retirement savings will be increased. Please note that it’s your responsibility to act in the best interests of your pension scheme members.
There are a number of ways you can opt out or vote on the Scheme:
- by post;
- online; or
- in person at the planholder meeting.
If you're voting by post or online, please return your decision form or go online to tell us your decision by 12pm on 19 October 2018.If you're attending the planholder meeting, you can hand the Decision form (and the advice confirmation slip if you are a planholder who must get advice) to the Chairman of the planholder meeting before it starts at 11am on 23 October 2018.Voting by post or online involves appointing a proxy to attend the planholder meeting and vote on your behalf. The chairman of the planholder meeting can act as your proxy if you don’t want to appoint anyone else.To vote by post, please complete and sign section B and C in your Decision form and return it to us.To vote online, visit ersvotes.com/GAR and log in using the online voting ID and security code on the front page of your covering letter.If you do come to the planholder meeting, we’ll count the vote you submit there, rather than any vote made before it.
We're asking you to make a very important decision and you should take the guidance and advice that you need before confirming that decision to us. If you find that you've made a mistake in the choice that you've made you should contact us on our free telephone-based guidance service on 0345 521 0046.
Financial advice and guidance
When providing guidance, JLT will give your pension scheme member(s) factual information and help them understand the risks they face; the key areas they need to consider; and the decisions they need to make.
When providing advice, JLT will look at, and take your pension scheme member through, their individual and personal circumstances. They'll then recommend the decision they should make.
They are not required by law to get financial advice before they can exchange the GAR for an increase in their retirement savings, However we recommend that you and your pension scheme member(s) get any guidance or advice required to help you make the decision.
If your pension scheme member is resident in the UK, they can find an adviser in their area by visiting unbiased.co.uk. They can also contact JLT Benefit Solutions Ltd (JLT) for guidance or independent financial advice on 0345 521 0046.If they’re not resident in the UK, JLT cannot provide them with independent financial advice, although they can provide them with guidance. If your pension scheme member needs an adviser, they should contact us on 0345 521 0046 and we will provide them with a list of independent advisers who may be able to help.
They can find an adviser in their area by visiting unbiased.co.uk if they are based in the UK. They can also contact JLT Benefit Solutions Ltd (JLT) for independent financial advice on 0345 521 0046 if they are based in the UK.
Advice payment contribution
No. We’ll only contribute to the cost of any financial advice given directly to your affected pension scheme members.
We’ll contribute the same amount to the cost of advice for each of those members as we do for our individual planholders.
Guidance provided through JLT’s guidance helpline is also free for those members (though they may have to pay if they seek guidance from another financial adviser).
Full details of the amount of contribution we will make for each member is set out in page 18 of Part A of your planholder circular.
We'll pay the financial adviser direct. Their financial adviser can request payment by completing an advice confirmation slip, available to download at adviser.royallondon.com/GARchoice. Your pension scheme member(s) will need to make up the difference if their adviser’s fee is more than the contribution we will make.
If your scheme members retirement savings are subject to a pension attachment (sometimes called an earmarking order), we recommend they review the terms of the order before making their decision, as their ex-spouse may be entitled to vote on the Scheme.
If they think this may be the case, please let them know about the offer. They can get a copy of the pack by contacting us on our free telephone-based guidance service on 0345 521 0046.
The choice to delay retirement is dependent on their individual circumstances.
They may want to delay retirement if they’re planning to take some or all of their retirement savings as cash, or transfer it to another provider. We recommend they get financial advice before making their decision. You or the pension scheme member can contact us on our free telephone-based guidance service on 0345 521 0046.
The scheme member’s health status is just one factor they should consider when making their decision and should be considered alongside the other factors listed in the planholder circular.
We recommend you and your scheme member get financial advice before making your decision. You can contact us on our free telephone-based guidance service on 0345 521 0046.
You can contact our customer care team on 0345 521 0046 if you have any further questions.