Business. Empowered.

In association with

EQUINITI’S PROPOSED MOVE TO THE NATIONAL

PENSION TRUST

Stuart Cameron, Pensions Services Director, XafinityPaul Munro, Principal Consultant, Xafinity

The purpose of this presentation

Recap on the Company’s proposal to:

□ Close the Equiniti Pension Plan (EPP) and

□ Equiniti’s participation in the National Pension Trust (NatPen) Overview of NatPen:

□ What is a DC Trust and how does it work?

□ Contribution rates

□ What investment options do you have?

□ Your benefit options at retirement

□ What happens if you leave?

□ Options in respect of previous pension benefits Protection Benefits Next Steps & Timings Questions

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What is the National Pension Trust?

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High quality trust based solution

BenefitsHigh:

Governance Member engagement Investment support Decumulation support

Low: Governance requirements on employer Costs to employer

A comprehensive cost effective DC Trust based pension scheme – the only master trust to be awarded the PQM for its ‘core’ product

Strong Governance

Independent Professional Trustee:■ Governs Trust to a high level

■ Ensures clear communications

channels between all providers

■ Ensures appropriate levels of:

□ Risk management

□ Internal controls

□ Administration service standards

□ Quality of record keeping

■ Maintains an action plan and corrects

any problems

The Trustee is wholly independent of all service providers

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How does a Defined Contribution (DC) Trust work?

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How DC schemes work

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1

Company PensionContributions

MemberContributions

£

Your Pension Account

2

Pension Pot converted into

benefits

Annual Income

Tax Free Cash

Spouse’s / Dependant’s

Pension

3

Company Payment

4Protection

Benefits

No change to Contributions

Under age 30

Employee Nothing 1% 2% 2%+

Employer 4% 5% 6% 6%

Total 4% 6% 8% 8%+

Age 30-44

Employee Nothing 1% 2% 2%+

Employer 6% 7% 8% 8%

Total 6% 8% 10% 10%+

45 and over

Employee Nothing 1% 2% 2%+

Employer 8% 9% 10% 10%

Total 8% 10% 12% 12%+

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Investing the Pension Pot

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Inflation

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Asset class returns

0

100

200

300

400

500

600

700

800

900

1,000£

Asset class returns over last 25 years(accumulation of an initial investment of £100)

Fixed gilts Index-linked gilts UK equities Global (ex-UK) equities

UK property Cash Inflation

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How to Invest?

■ Previous slides explained why to invest

■ Key consideration is how to invest?

■ There are two ways to invest your contributions:

■ Members can rely on the ‘default’ fund, although this is not a recommendation

Choose from a range of Self Select FundsOR

Choose a pre-defined Lifestyle Strategy

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Investments

PR concerns:■ Investment return is a key factor in determining retirement income■ Without support many members are not well placed to make decisions

Independent Professional Trustee has:■ Developed processes for regularly monitoring, reviewing and (if

required) replacing□ Default fund□ Investment manager(s)□ Fund Range

■ Determined investment strategy based upon membership■ Ensured that the number and risk profile of funds reflect the typical

member’s financial capability

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Self Investment Options

Investment options Nature of Management

AMC %

High UK Equity High Alpha FundGlobal Equity Unconstrained FundEthical FundUK Equity FundOverseas Equity FundGlobal Equity FundProperty FundAdventurous Growth Fund

ActiveActiveActivePassivePassivePassiveActiveActive

0.730.360.380.110.110.110.200.35

Moderate Balanced Growth FundDiversified Growth Fund

ActiveActive

0.260.85

Cautious Cautious Growth FundCorporate Bond FundPre-Retirement FundFixed Interest Gilt FundIndex-Linked Gilt Fund

ActivePassivePassivePassivePassive

0.220.110.110.110.11

Minimal Cash Fund Active 0.11

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Lifestyle Options

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Purpose of a Lifestyle Strategy

The Lifestyle Strategy is based on the following thoughts:

1. Member is willing to take material risk when some way from retirement to achieve a potentially higher return

2. Member is willing to accept high volatility when some way from retirement to achieve a potentially higher return

3. Members wish to retire at their Normal Retirement Age

4. Members are concerned about volatility in the run up to retirement

5. Members’ benefits at retirement: 25% cash, 75% of your account used to provide pension

Therefore, ALL contributions – future contributions and transferred funds – are invested in the same Lifestyle strategy

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Balanced Lifestyle Strategy (Default)

Other lifestyle strategies available: Cautious, Adventurous, and Global Equity

The Global Equity Lifestyle Strategy is similar to the default option under the Equiniti Pension Plan but at a lower AMC

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Lifestyling may not always be appropriate

■Will members be in the DC Plan at the agreed transition point?

■Retirement at different age to Scheme Normal Retirement Age

■Pension drawdown rather than annuity

■Timing on investment switches

■Range of self select funds offered will enable members to set their own strategy

■Lifestyle investment is a strategy for you to consider, but this is not a recommendation

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Making your investment choices

■ Xafinity believes it is important that members make a considered choice when it comes to setting their investment strategy.

■ This may involve consulting an independent financial adviser, though many individuals find that the information available on the NatPen website provides sufficient information and education to make an initial informed choice.

Trust Investment Navigator

The Investment Navigator is accessible on the NatPen Website.

It has been designed to help provide you with a clearer view of:What kind of investor you are; and What kind of investment strategy could help you reach your long term goals

Modelling tools

Once your details have been uploaded and you access the secure NatPen site, you can model what your retirement benefits might be. The model will take account of your contributions, your current fund value and how long it is until your selected retirement date.

The value of other DC benefits can also be included.

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Monitoring your investment choices■ It is important to review the value of your investments annually and to

reconsider your investment strategy at least every three years.

■ Again, this may involve consulting an independent financial adviser.

■ Various information is available to you on the NatPen website:

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Member Communication

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Communications & Helpline

Member HelplineInteractive web enabled systems* Provides access to:

□ Booklet and Investment Guide□ Fund factsheets□ Administration forms □ Benefit Statements□ News Updates

*Hard copies available Allows member to:

□ Undertake “what if” calculations□ Obtain real time annuity quotations□ Request fund switches□ View statement of account over any time period □ View contribution and transaction details□ Update personal details

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Auto-enrolment – What impact will it have?

■ Staff are already automatically enrolled into the Equiniti Pension Plan from the day they join Equiniti. In future, new staff will be contractually enrolled into NatPen.

■ The contributions to the EPP (and to NatPen) exceed the amounts currently required to comply with the new statutory auto-enrolment requirements.

■ Equiniti Group’s “Staging Date” under the new auto-enrolment requirements is 1 September 2013.

■ As a result of the way the Equiniti’s pensions arrangements and contribution structure were established, auto-enrolment will have a low impact when compared to many employers’ pension arrangements.

■ For practical purposes, the Company intends to postpone the automatic enrolment of employees who have not yet joined the EPP until 1 November 2013.

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Options at Retirement

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Decision Tree

Trustee-established service to help you review your benefit options at retirement

Clear and simple language Allows a member to

understand their options Information not advice Professional and bespoke

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Retirement Support

■ Open market (whole of market)

■ Benefit Design support

□ Escalation / Spouse /

Guaranteed Period

□ Impaired life annuity

■ On-line access to model

different bases

□ Prior to retirement

□ At retirement

■ Free Member Helpline

■ Tailored report

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Retirement Support

The NatPen approach addresses tPR concerns about retirement decisions

Shopping around can be significantly beneficial

The availability of an independently selected Annuity Service■ Provides members with the best opportunity to select the option that is suitable for

them■ Ensures efficient processes are in place to convert members’ funds■ Emphasises the importance of proper advice

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Protection Benefits

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Death in Service Benefits

■ If you join NatPen, the benefit payable on death in service is:

□ The value of your DC Fund at the date of your death;

□ In addition, an insured lump sum payment of 4 x Basic Salary* at date of death is payable from a separate Group Life Assurance trust established by Equiniti.

■ Pension benefits from previous arrangements may be payable in addition

* Members are able to increase or reduce the level of lump sum benefit through Flex benefits system

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All employees are covered for 2 x Basic Salary, irrespective of pension scheme membership

What happens if I leave Equiniti?

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Leaving Equiniti

If your employment with Equiniti ceases you can no longer be an active member of NatPen and contributions will stop

If you have been in NatPen for more than 2 years, you can

□ Leave your funds invested

□ Transfer the money from your pension account to your new employer’s pension scheme, (provided it will accept the transfer) or a personal pension.

If you have been in the plan for between 3 months and 2 years you can

□ Leave your funds invested (if more than £5k)

□ Transfer the money from your pension account (as above) , or

□ Take a refund of your contributions (less a tax charge).

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Transfers in from other arrangements

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Existing pension plans

Other pension schemes NatPen is able to accept transfers of benefits from other registered pension

schemes Alternatively, your other funds can remain where they are and will remain subject

to the fund charges for your existing scheme.

The Equiniti Pension Plan Once current staff are enrolled in NatPen, the EPP will be wound up. Before the wind-up commences, you will have the opportunity to transfer your

funds in the EPP to NatPen (or to a separate arrangement of your choice). Unless you transfer to NatPen or another arrangement, your EPP fund value will

be transferred over to NatPen under an independently certified transfer plan agreed by the EPP Trustees.

Investment options letters will be issued to home addresses (Ensure yours is up to date!)

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Forms for completion:■ Beneficiary Nomination■ Investment instruction

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■ A separate form should be completed for the Death in Service lump sum, which is payable under a separate trust.

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Next Steps

If the Company’s proposal is implemented you will need to:

□ Consider whether you want to change the level of contributions you are paying

□ Review your Investment options

Irrespective whether you join NatPen or not you should complete a Nomination Form to ensure that any lump sum benefits can be paid to your beneficiaries promptly.

Staff considering opting out are encouraged to seek personal independent financial advice

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Any Questions?

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