BT Retirement Saving Scheme: Standard Life Freedom and Choice Options
Following the “freedom and choice” changes introduced recently Standard Life is making changes to the investment options in the BT Retirement Savings Scheme (BTRSS) for those who are ten years or less away from their planned retirement date. For some members a decision is needed by 3rd July 2015.
Pension scheme members now have more options about how they can take money from their pension when they retire.
Traditionally, on retirement, most people bought an annuity and took a tax-free lump sum. Now members have the option to take your money in a number of different ways, for example:
Take a tax-free lump sum and buy a lifetime income (an annuity) with the rest.
Take a lump sum, including your tax-free lump sum.
Take a tax-free lump sum and use the rest to take a flexible income (known as drawdown).
Take a combination of these.
These options are currently available from age 55 onwards.
Standard Life is making some changes to the low-involvement investment option, which is the default investment option of the BTRSS.
Members will not see any changes until they enter the investment glide path to retirement which starts ten years from their planned retirement date.
Once the glide path starts pension investments move into Pre Retirement and At Retirement Funds. These are designed to prepare an individual’s pension for buying an annuity when they retire.
With the new flexibilities, it is expected that many members will no longer buy an annuity at retirement. So Standard Life is making some changes to the Pre Retirement and At Retirement Funds because members are more likely to take lump sums or a flexible income from their pension.
Standard Life is changing the following:
a) The underlying investment mix of the Pre Retirement and At Retirement Funds. These changes mean that by the time most members retire they will be in a mix of investments that gives them the flexibility to take their money the way they want.
b) The charges for the Pre Retirement and At Retirement Funds are increasing slightly because they now include a wider range of investments, which gives members greater flexibility about how they take their money. Previously these funds invested mainly in bonds. They now include equities from around the world, as well as bonds, property, absolute return funds and cash-type investments.
c) The name and code of the strategy used for the default low-involvement investment option to the Passive Plus III Universal Strategic Lifestyle Profile (code: U3PP), and some changes to the names, codes and fund descriptions of the Pre Retirement and At Retirement Funds.
The period over which individuals move into the Pre Retirement and At Retirement Funds will continue to be 10 years.
The effective total annual fund charge for each fund is the fund management charge, plus any additional expenses which apply, minus the scheme rebate.
The effective total annual fund charges for the BTRSS low-involvement investment option will continue to be 0.35% when 10 or more years from retirement. This will reduce to 0.27% in the final three months before retirement. Previously the charges dropped to 0.26% in the final three months.
Charges and rebates are not guaranteed and may be changed in the future. However, Standard Life has confirmed to BT that the rebates which BTRSS members get will not be reduced until at least January 2020.
Other New Investment Choices
Standard Life is also introducing a range of additional strategic lifestyle profiles (SLPs) designed to meet the different options members now have when they retire:
Universal SLPs – if you want the flexibility to take your money the way you want when you retire, or if you plan to take a flexible income (drawdown).
Annuity SLPs – if you plan to take your full tax-free lump sum and buy a fixed annuity with the rest.
Lump Sum SLPs – if you plan to take all of your pension as one or more lump sums
What it means for individuals
For most members in the BTRSS there is no automatic change as they are more than 10 years from their planned retirement date, or are not part of the default investment. So for the vast bulk of members Standard Life is providing information to members and encouraging them to think about the choices they have made, or will need to make, in the future.
However, for those in the BTRSS default fund with less than 10 years to go until their nominated retirement date, then there is a practical issue to consider.
For those individuals there will be changes to their investments as detailed above. If members are happy with the changes, they do not need to do anything. Standard Life automatically makes the change.
There will be a small one-off cost as a result of making the change to the underlying investments. This will be reflected in the price used to calculate the value of the funds on the day the changes take place. This charge will apply in full to those who have joined the BTRSS on or after 1st November 2014.
However, for members who were moved by Standard Life into the current default in January 2015 (from the ex-BTRP Lifestyle Profile) and who are within 10 years of their planned retirement date will receive a payment into their BTRSS account. For this group there were also one-off costs at the time of the move into the low-involvement investment default option in January. Therefore, to avoid a second charge, Standard Life has agreed with BT to add an amount to individual plans equivalent to the January one-off costs of moving into the Pre Retirement and At Retirement Funds, after all the changes have taken place.
If members would prefer to remain in an investment strategy that is designed for buying an annuity as at present, they can move to the Passive Plus III Annuity SLP or any of the other Annuity SLPs, at no cost. If members wish to do this then they must inform Standard Life by 3rd July 2015.
If members want to move to any other investment option, they should also contact Standard Life.
BTRSS members are currently being sent letters about these changes to their home addresses.
Attached for information are the letters that will be sent to those in the BTRSS default fund who are more than and less than 10 years from their nominated retirement date.
All BTRSS members should consider the issues carefully and read the information they receive from Standard Life. Any decision about which investment option to adopt is down to individual members of the BTRSS. The CWU is legally prohibited from offering financial advice.
If any member wants financial advice then they should speak to an independent financial adviser, and these can be found via www.unbiased.co.uk or 0800 085 3250.
If members have queries about these changes then they should contact Standard Life on 0800 066 5432 in the first instance.
Retired Members Conference Manchester 21st January 2016.
58 Delegates 25 visitors and 47 Branches were present at the Retired Member’s conference held in Britannia Hotel Manchester.
Carl Webb the North West Regional Secretary addressed the conference saying that it was a great privilege to be able to host the conference in the North West Region. He said he would like to congratulate all members who aspire to become retired member’s secretaries of the union, and the NW Region thank you for all the work that you do on behalf of the members. He went on to say you can always rely on the retired members to turn out and support us when we have events, thank you all.
Dave Ward in his address to the conference said, with the austerity measures, public service cuts that this government is implementing, I understand the difficulties that retired members face. We should ensure that we seek the views of the retired members on all issues that are of concern to them. I want to work with the RMAC to see what we can do to support the retired members of the union. I also want to work with the RMAC to see how we can strengthen the retired members sections. Also I want to see more involvement of the retired members within branches, and we need to improve communications and look how we can improve the Retired Members Webb site.
On the subject of companies providing retirement seminars, it is very unlikely that we could achieve this, but let’s see what the CWU can do.
Conference Motions Carried.
This Composite Motion called for the RMAC to work with the NEC tocampaign through the Labour Party, the NPC and the TUC and other organisations to defend the Triple Lock, and maintain the commitment during the life of this parliament and the next one. This was one of the Motions selected to go before the General Conference in April
Due to the published accounts of the National Pensioners Convention (NPC) that forecast a deficit this year, this motion called for the RMAC to work with the NEC to appeal to Branches to voluntary donate 60 pence annually per Retired Member to the NPC.
The SW Regional Council viewed with concern the falling numbers of retired members. The council is concerned that Branches are not affording the treatment of recruitment of retired members with the time and priority it deserves. The RMAC is instructed to make representation to the CWU Headquarters in order that our concerns are known and sent to all branches.
This was the second Motion elected to go to the Unions Annual Conference.
With 30,000 men living with terminal prostate cancer, this Motion instructed the RMAC to request the NEC to join with other interested organisations to obtain from the Government their agreement Prioritise Prostate Cancer care as the number of sufferers are more than double those with breast or bowel cancer. Research funding for prostate cancer falls well below other cancers.
This motion concerned the continued underfunding of our NHS. This underfunding has resulted in the local NHS trust having to outsource to private companies who in turn make a profit from the sick.The government sent Lord Prior to the USA to see how their private healthcare operates. This shows that the Conservative Government are not interested in the public funding of the NHS. Conference instructs the RMAC to work with other organisations and bodies to put pressure on the Conservative Government to increase the funding for the NHS.
Conference instructs the RMAC to work with the NEC to lobby the present government to repeal the under occupancy charge, otherwise known as the Bedroom tax.
This motion instructed the RMAC to request that the NEC join with other relevant organisations to maintain close liaison with the CQC and local authorities to ensure that where a Care or Nursing Home is deemed to be failing to meet required standards, every effort is made to remedy the perceived issue in order to preclude the closure of the establishment and the effect to both residents, staff members and family members.
The conference instructs the RMAC to work with the NEC to achieve the following: In terms of the CWU affiliation with the Labour movement, seek greater influence with the Government and Local Authorities to take greater interest and responsibilities when promoting financial restraints on Care Homes and retirement accommodation, and to help prevent the evolving process of passing care services in to private and uncontrolled agencies.
SDGS Tony Kearns Closing address to conference.
In his closing address to the conference, Tony thanked the members of the RMAC for all their work on behalf of the retired members of the Union.
He said the CWU retired members play an important role within the union. Within a review of the structure of the union we will be looking at how the Retired Members section is structured.
He went on to say that the Government Trade Union Bill if carried un-amended will cause Unions many problems, it would mean that as retired members you would not be able to support colleagues on picket lines. It will take money from unions and give it to private firms.
The problems that we face today do not just affect the pensioners of today, but all those who will be retiring in the future.
NPC LOBBY OF PARLIAMENT NOVEMBER 4TH
Pensioners gathered outside parliament to lobby the government for a better social Care system for the elderly, and a living state pension that would take every pensioner out of pension poverty.
The Deputy General Secretary Tony Kearns joined the S.E Region Retired Members at the NPC gathering prior to the Lobby of parliament.
It was disappointing not to see more CWU members joining the lobby as apart from the SE Region, as far as I am aware there was only one other CWU Member who believe was from the Surrey & North Hants B.T.Branch
As the CWU affiliate at national and regional levels, I feel that we should try to raise the profile of the Unions activities in supporting the NPC.
NPC Members filled committee room 14 in the House of Commons to hear from guest speakers. Ron Douglas the NPC President welcomed the delegates and introduced the speakers to the meeting.
Kevin Hopkins MP Labour was the first to address the meeting. Kevin said we must have a pension for everyone that is above the poverty line and not reliance on benefits. He said we need to campaign to change the private pension schemes, it would be better if these schemes were managed by the government rather the private companies.
On care he said the care system should be under public control not as present in private hands. He said 50% of private care homes are in financial difficulties due to the cuts to the local councils who pay for the care of the elderly in private care homes. He felt the way to pay for care was for a rational change to the tax system, those who have the highest income should pay a higher proportion of their income in tax, and the government should ensure those companies avoiding paying tax in the UK pay the taxes that are due .
Nick Thomas Symonds MP the Shadow Pensions Minister.
Nick told the meeting that in the short time that he had been in the post, there were two major issues that have been crossing his desk. One in seven pensioners cashing in their pension has been targeted by scammers. He said more has to be done to combat this, if you open up pension freedom you must ensure that those wishing to cash in their pensions have clear advice in what is involved, the government web site on this issue is not fit for purpose as it is to general.
The other issue is the plight of women born between April 1951 and April 53 who loses out due to the rise in the pension age, over 7000, within this age bracket will not get the new state pension, whereas men born in the same period will receive the new pension.
A question was asked if the promise from Jeremy Corbyn that an older persons commission would be set up was still a policy, and would the NPC be involved in the discussion.
Nick said it is on the agenda to meet with Jeremy Corbyn on this issue and yes they would involve the NPC. He also confirmed that the triple lock on pensions would form a part of the Labour Party manifesto for the next General election.
Neel Radi Chair of the National Care Catering Association.
Neel gave a presentation on the Meals on Wheels Campaign. He said everyone should have the right to have a nutritious meal every day, over a third of councils in the UK have scrapped the meals on wheels service. 51% of top tier councils that still have Meals on Wheels service expect further service reduction in the year ahead.
More than 1 million older people in the UK are malnourished, 93% of the 1 million older people with malnutrition in the UK are living in the Community. The Average cost of a meal a day is just £3.55, a hospital bed cost on average £300 per day. Prevention of malnutrition will save the NHS money; the cost of malnutrition to the UK economy is £13billion per year.
The National Association of Care Catering (NACC) is asking the government to consider making Meals on Wheels a statutory protected service. The NACC are also calling on the government and councils to recognise the real value of adult social care services. The NACC also calls for the safeguarding of existing Meals on Wheels services to ensure that older and vulnerable people have access to nutritious meals that can be delivered to their homes in a safe way to ensure that the person safety and wellbeing is maintained.
Mark Serwotka PCS General Secretary.
In his address to the rally, Mark said “We must ensure we all work together on the problems that has been caused by austerity.” He told delegates that there had been massive loss of jobs in the HMRC, which has resulted in there being only been three prosecutions for tax evasion, and that only 50% of phone calls are answered. The pensioners of this country have a far less benefits service than many European countries. Taxes that should be collected which go to pay for services are not being collected. We need fare more people to turn out and demonstrate, both young and old need to work together because we need to ensure that we must fight against the cuts being made that affect the elderly in this country. We must demonstrate on the streets and tell the government how we feel.
Dot Gibson Secretary of the NPC.
In her closing speech Dot thanked all the speakers, and said we have a responsibility to the younger generation as well as the pensioners of this country, the youngsters of today are tomorrow’s pensioners. It is not young against old, or the pensioners who own their homes and those who rent and on basic state pensions. We want a decent State Pension for all. The youngsters of today will have to work longer and end up with a worse pension. Prior to the election the Government said it did not want pensioners to have to sell their homes to pay for care, but within weeks of being elected they renege on that promise and deferred any change to the care bill until 2020.
The NPC had had a meeting with the BBC where they were told that the free TV Licence for the over 75s may be withdrawn when the next financial review takes place in five years’ time.
When it comes to demonstrations, whenever there is a demonstration we need to be there with our banners. When she met with Frances O’Grady the General Secretary of the TUC regarding a demonstration over pensions, we were told that Pensioners were not as important as the younger and disabled workers.
The 1st February 2016 is national dignity day. Please contact your local Unison Branch to find out if they are organising an event. If they are make sure that you are there to support them.
RMAC – Retired Members The CWU now has just under 18,000 retired members. The advisory committee objectives are to promote the interests of all retired members and to campaign on matters that are relevant such as Pensions, Healthcare and Mobility. The policy of the committee is to encourage every CWU Branch to establish a Retired Members Section. If you are retiring soon you can retain your CWU membership at a greatly reduced subscription rate. Contact your local Branch Secretary for details, the phone number is on your CWU membership card.
Tony Kearns, Senior Deputy General Secretary is the officer responsible for the committee. Tony can be contacted at SDGS@cwu.org
If you have recently retired and would like to retain your membership with the CWU, you can do so at a discounted rate whilst still making use of the excellent benefits. Simply click on the relevant application form below, save it to your computer or print it out and send it back to us once you’ve completed it to the address below or email firstname.lastname@example.org. If you have any trouble completing the form please give us a call on freephone 0800 731 7434.
Retired member application form(for members who apply to continue their CWU membership within 26 weeks of retirement. Includes access to the death benefit)
Retired associate member application form(for members who apply to continue their CWU membership after 26 weeks of retiring. Membership fees are lower but membership does not allow access to the death benefit)
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