Assessing The your Fidelity Independent Workplace ...… · Assessing your Fidelity Workplace...

Assessing your Fidelity Workplace Pension

The IndependentGovernanceCommittee’s 2018 report

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Summary for members

Dear pension plan member

We all want to feel confident that the money we are saving for retirement is working hard for us and is safe. The role of the Independent Governance Committee (IGC) is to review the performance of Fidelity as your pension provider and to make sure they are providing you with value for money.

How is my pension doing?

We have looked at all areas of your pension:

• The investment performance of your pension and how this is monitored

• The quality of the administration of your pension and the support given to you when you contact Fidelity

• The letters and booklets provided to you and how easy these are to understand

• The online systems, tools and information available to you to help you understand and manage your pension.

After reviewing these areas and comparing them to the charges you pay we have concluded that overall Fidelity offers you value for money.

There are some areas where we think Fidelity has met or exceeded our expectations:

• There is a structure to ensure that the service provided to you meets expectations.

• The charges are simple in structure and there are no exit charges if you choose to leave the Fidelity plan.

• FutureWise - Fidelity’s default investment strategy - offers an actively managed default investment fund with a focus on risk management which we believe is appropriate for most individual’s needs.


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Kim Nash

Chair, Independent Governance Committee April 2018

There are some areas that we will be working with Fidelity on in the coming year to enhance your experience:

• Ensuring that any requested information is provided to you quicklyand accurately

• Giving you the right information at the right time, to help you makedecisions in relation to your retirement savings

• Ensuring the investment strategy you are in is designed well andkept up to date.

Where can I find out more?

We have created a short video to tell you about the IGC.

What do I need to do?

Nothing! You don’t need to take any action, however, we would encourage you to take an interest in your pension to make sure that you’re getting the most out of your savings. We would suggest that you:

• Review the level of contributions you are paying to make sure youare paying enough for the retirement that you want

• Make sure that the personal information held by Fidelity, such asyour intended retirement date, is correct

• Review your investment fund performance and choices available.

You can do all of these things online, at Fidelity’s webpage (PlanViewer), which has lots of tools and information to get you started.


https://retirement.fidelity.co.uk/en/power-of-small-amounts/

www.planviewer.co.uk

https://video.fidelity.tv/view/NmAbHepfVil

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IGC REPORT 2017

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As Chair of the Fidelity IGC, I am delighted to present to you our third annual report. The IGC’s role is to act in members’ best interests and to assess whether or not your pension plan provides you with value for money.

The IGC oversees over 260,000 members’ retirement savings and nearly £9.0bn of assets invested for members’ retirements.

For more information on the members of the Fidelity IGC and to understand a bit more about what we do, watch our IGC Video

Introduction

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Value for money

For a pension plan to offer good value we expect it to meet certain standards. You can find these standards in our value for money framework. We review the features of the Fidelity pension plans against our expectations and set out where we think Fidelity is performing better than expected or where certain areas aren’t meeting our expectations. The pension plan member research that was carried out in 2016 helped to build our framework.

The IGC believes that determining value for money involves the assessment of the following elements:

• The level and quality of benefits that you receive, given the contributions you make;

• The level and quality of the service that you receive;

• The tools available to help you save for retirement; and

• The costs and charges associated with the plan.

Our full value for money framework is included in the detail section of the 2017 Report.

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We have concluded that your Fidelity pension plan continues to offer you value for money.


https://www.fidelity.co.uk/static/pensions/emails/pensions-igc-report-2017.pdf

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We have assessed that Fidelity pension plans meet or exceed our expectations in the following areas:

• There is a strong corporate governance framework in place within Fidelity, which ensures that the service provided to you meets expectations.

• FutureWise - Fidelity’s default investment option - is an actively managed default investment option provided by Fidelity with a focus on risk management, which we believe is appropriate for most individuals’ needs. FutureWise is available to Employers who do not wish to design their own default investment strategy.

• There are good investment governance processes in place to make sure that the range of funds available for self-selection is suitable.

• The fund charges are simple in structure and there are no exit charges if you choose to leave Fidelity.

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Key areasof quality

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Progress on last year’s actions

1. Providing relevant communications and support

Fidelity recognises that communication that is better targeted to your own individual circumstances at the appropriate time is more likely to help you make better informed and timely decisions. They are therefore developing the means by which the communications that are issued to you are relevant to your personal situation and driven by life events. We expect this to be up and running in 2018.

Over the year the website has been improved to make it easier to navigate and the content has been refreshed. In redesigning the main page, Fidelity has taken into account the most common questions asked by members so that these things are easier for you to find. There are distinct areas on the website which provide information on the security of your pension and tax relief, both of which were flagged as important areas of concern by the member research carried out in 2016.

In addition to its website refresh, Fidelity has recently developed a specific financial wellness section on their website to assist with more holistic financial planning. This includes tools showing the power of saving just a little extra each month and how these additional contributions will have a positive impact on your retirement savings. If you haven’t yet seen it, this is a good place to start learning more about your retirement savings.

Work continues on making it easier for you to understand the amount of money you need to save to enjoy the retirement lifestyle you’re hoping for - and what this means in terms of the contributions you make now.

If you are a member who chooses your own investment funds rather than remaining invested in the default investment option, you can expect to hear from Fidelity every now and then to remind you to review your investment choices from time to time. We expect this process to be up and running by the end of 2018.

Throughout your membership of a pension plan you receive letters from Fidelity, including an annual benefit statement. The benefit statements have been refreshed and are now much clearer. These were introduced from January 2018. The letters that you receive from Fidelity are also being reviewed during 2018 to make them easier to understand.

In last year’s assessment we challenged Fidelity and its Board to seek improvements in certain areas. We have set out below the progress that has been made to date on these areas:

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SUMMARY OF KEY FINDINGS


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2. Investment default strategy

All workplace pension plans used for automatic enrolment purposes must have a default investment option. That is, an option in which members’ contributions will be invested unless they make their own investment choices from the range available. Some Employers choose to take advice in designing a default fund which is appropriate to their employees. Fidelity’s standard default fund, “FutureWise”, is a default strategy which is available to Employers who do not wish to design their own default strategy.

FutureWise is an automated investment process that invests your pension account into a range of appropriate funds during your working life. For most of the time that your savings are invested in FutureWise, they will be in the Fidelity Diversified Markets Fund. This is a ‘multi-asset’ investment, which means its managers aim to give you cost-effective access to a diverse range of investments all over the world, including shares, bonds and cash. As your retirement date approaches FutureWise gradually increases the proportion it holds in assets which are considered less risky, which provides the opportunity to preserve the value of your account by avoiding capital loss in more extreme markets. FutureWise invests in fixed income assets, such as government bonds and cash, as they typically carry a lower level of risk than growth assets during periods of market stress.

Over time, what is deemed to be an appropriate default fund changes as legislation changes and new innovations come to the market. The introduction of Pension Freedoms in 2015 is one such change in legislation that has prompted a market-wide review of what constitutes an appropriate default fund.

In 2015 we asked Fidelity to consider whether members in older style (or legacy) default strategies were still in appropriate investment strategies. Over the last couple of years, work has been ongoing to move these funds to more up to date and appropriate alternatives.

There have been regulatory and legal hurdles to overcome in completing this work and for this reason progress has been slower than we would have liked. We expect that significant progress will be made on this project during 2018 and further information on the expected changes to the older style default strategies is included on page 15.

Employers who use a bespoke investment strategy have been encouraged to re-engage an advisor to review their default investment strategies in light of Pension Freedoms. Following the review process, some Employers have decided to transition to Fidelity’s FutureWise strategy. To date, 48 out of 56 Employers have reviewed their bespoke strategies and those who have not undertaken this review will be incorporated in the project noted above. Fidelity have set out their expectations to Employers that they must retain an advisor and regularly review their default investment strategies going forwards, otherwise member funds will be transitioned away from the bespoke strategies into FutureWise.

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3. Ease of changing contribution level

We acknowledge that contributions are an important factor in achieving a good level of retirement savings. Throughout 2017, Fidelity have developed tools which show the added value of paying extra contributions and it is hoped this encourages you to pay as much as you can reasonably afford into your pension.

Our ultimate aim would be that you could easily change the amount you contribute through PlanViewer (Fidelity’s website where you are able to manage your pension account). This option is not available to all members, due to the payroll requirements of many Employers, however it continues to remain an area of focus.

4. Costs and charges

Communication of charges

We have received feedback from members that it is hard to understand costs and charges as a percentage. We have asked that Fidelity includes an example in your annual benefit statement that explains what the charges mean in monetary terms.

Fidelity advised that this change will be introduced alongside other changes that are being made to systems and processes over the coming year or two.

Annual management charges

The IGC also asked Fidelity to consider whether the fund charges which are 0.75% or above are reasonable given the investment management style and member outcomes (a cost of 0.75% amounts to £7.50 per £1,000 invested). These funds tend to be specialist funds with specific objectives and are managed on an active basis. Given the specialist nature of these funds, they tend to come with a higher charge but in turn also aim to generate a higher return. Examples of such funds include actively managed Emerging Markets and specialist global equity mandates. These options are available for members on a self-select basis, with the charges disclosed upfront.

Transaction costs

In last year’s report we explained that we have been looking to obtain the additional costs of investing over and above the annual management charge, referred to as Transaction Costs. At the time, a consultation was being undertaken by the Financial Conduct Authority (FCA) to determine an industry standard for collecting and assessing these costs.

Transaction costs are the costs of buying and selling the investments held in your fund, such as stamp duty and commissions, and implicit costs, such as the difference in the price of a stock from the time an order is placed to the time that it is executed.

On 20 September 2017, the FCA released their policy statement on transaction cost disclosure following the conclusion of their consultation. The policy statement highlighted that investment managers will be required to provide transaction cost data on request to pension providers. Pension providers must then provide this data to IGCs and trustees on request.


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The Association of British Insurers and the Investment Association have worked with pension providers to produce a template for investment managers to provide transaction cost data to pension providers. Fidelity has been working with their in-house technology teams to develop a solution to provide this transaction cost information to the IGC. Based upon feedback received from managers it appears that managers will start providing transaction cost data on their funds from Spring 2018 onwards.

Fidelity is currently using the methodology stated by the FCA for capturing transaction costs (referred to as slippage methodology) to calculate the portfolio transaction costs for 2017 for the three component funds within Fidelity’s FutureWise default.

Please note the numbers quoted below are based on forecasts rather than actual data and going forward Fidelity would look to source these based on actual rather than forecast data.

• Diversified Markets Fund - 0.31% (that is, £3.10 per £1,000 invested)

• UK Aggregate Bond Fund - 0.14% (that is, £1.40 per £1,000 invested)

• Fidelity Cash Fund - 0.14%

For most of the time that your savings are invested in FutureWise, they will be invested in the diversified markets fund. As your retirement age approaches, FutureWise gradually increases the proportion it holds in assets which are considered less risky. Because of the change in the funds used, different transaction costs apply at different ages.

Note: A cost of 0.25% amounts to £2.50 per £1,000 invested.

Please note numbers quoted above are calculated as per the FCA approach they differ to numbers quoted last year. However if we were to compare on a similar basis as last year the numbers would be identical to numbers quoted last year.

The transaction costs appear reasonable when compared with the other limited information that is available. Over the coming year we will be asking key investment managers how they minimise transaction costs and will be asking all investment managers for transaction cost information. Once we have this information we will be incorporating this into our value for money assessment for our 2019 report.

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Age Transaction Cost

Up to 63 0.31%

64 0.28%

65 0.25%


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5. Administration

The introduction of pension freedoms in 2015 resulted in an increase in members looking to withdraw cash from their pension plan. Following any significant regulatory change such as this, Fidelity carries out a review to ensure members are experiencing the best possible outcomes. As part of Fidelity’s review of the initial introduction of pension freedoms, Fidelity undertook a quality audit by sampling a number of member case files. The audit identified that the vast majority of members had a good experience. However, for some members, discrepancies were identified in the way they had been treated, dating back several years, which may require remediation. We are pleased with the way in which Fidelity has pro-actively identified the issue and is taking action to address it. Fidelity has appointed an independent organisation to validate the process and methodology for this remediation exercise which will be carried out separately from business as usual activity. The IGC will be monitoring the progress of this work.

Over the last year we have seen that performance against service standards has dropped following an increase in volume of work and there has been a corresponding increase in complaints. The IGC worked with Fidelity to ensure actions were taken to improve the service provided to you. Fidelity took the following actions to ensure that their performance improved:

• Additional staff were recruited into the administration teams to meet the increased volume of work

• Fidelity carried out a process review and introduced additional system automation to improve efficiency.

Performance against service standards is reviewed at each quarterly IGC meeting. Since October 2017 we have seen that performance against service standards has improved and we will be continuing to monitor this improvement to ensure it is sustained and the mitigations put in place are sustainable for the volume of work.

Further to the IGC’s request to undertake an external audit, Fidelity are currently working on ensuring their systems, processes and controls are reviewed and improved where necessary, in anticipation of the audit.

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6. Employer feedback

During 2017 we have met with the Relationship Director team and understood how they interact with and support Employers. There have been some changes made to the responsibilities of the team which means they have more time to engage with, and provide more focused support to, Employers. In the 2018 feedback, the Employers we have spoken to have not raised the capacity of their Relationship Directors as a concern.

We would like to see the communication consultants working more proactively with Employers to develop appropriate engagement campaigns as we recognise the key role the Employer, alongside Fidelity, has to play in helping you to understand your pension.

7. Support for the IGC

In our 2016 Report we raised concerns with the support provided to the IGC by Fidelity. An individual was assigned to support the IGC and although this initially provided some improvement in the response times, over the last year we have had concerns about the support reducing again. Over the last few months Fidelity has recruited two additional people into the Relationship Directors’ team to meet the needs of the increased number of clients. There has been some impact on the support provided whilst these individuals have been recruited but Fidelity are confident they now have suitable and sustainable level of resource to provide the necessary support required by the IGC in order to efficiently carry out our role.

The IGC finds there is significant value in meeting with Employers to gain their feedback directly. Two IGC members attended Fidelity’s Client Forum in November 2017 and spoke to a number of Employers to get feedback. We have only been able to meet with one Employer this year but we will be increasing the number of Employers we meet with over the coming year to include feedback in the 2019 report. If any Employers are interested in meeting the IGC to understand how we operate and to provide feedback on Fidelity, then please do get in touch through your Relationship Director or directly through the contact details provided at the end of the report.




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During 2017 we have worked with the IGCs of six other providers to carry out a benchmarking exercise across the different provider offerings. The seven pension providers involved cover a large proportion of workplace retirement savings plans and includes Fidelity’s main competitors. The framework covered six areas; security, engagement, investment, access, service and charges. All of the providers involved submitted data to an independent party who then analysed this data to benchmark the performance of the providers.

There were no particular areas of concern regarding the performance of Fidelity in comparison to other providers. However, that doesn’t mean that there were not areas that have provided food for thought in terms of ongoing improvements; the benchmarking has contributed to the value for money assessment and assisted in highlighting the areas to focus on for 2018.

The IGC recognises that there are some limitations on the initial work undertaken due to timescales and the provision of data but will be looking to continue to work with the other IGCs to develop the benchmarking framework for future reports.

Benchmarking

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The IGC have raised the following points with Fidelity’s Board and will be looking to see developments in these areas over the coming year.

1. Administration

The IGC will continue to review the performance of Fidelity against their service standards to ensure that the actions taken to resolve the drop in performance levels continues to be sustained and results in a good service being provided to you.

Fidelity are also working on their systems and controls ahead of an external audit being completed and the IGC will be monitoring the implementation of this process during 2018.

The IGC will continue to monitor the progress of the rectification exercise currently being undertaken by Fidelity to ensure day to day administration is not impacted.

Focus for

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2. Default investment strategies

We referred earlier to the reviews of default funds which have taken place or are in progress. Where it is considered that a default is no longer appropriate, it is relatively simple to redirect future contributions into a new default strategy. However, the nature of the workplace pension plans under the remit of the IGC means that it is difficult to move assets that have already been built up into a new default without asking all members for their consent to do so. Experience tells us that obtaining consent from all members is extremely difficult, as members may not understand what is being asked of them, or because they believe that their Employer or provider should be acting in their best interests in any event.

Over the past year, Fidelity has been evaluating moving assets within legacy default strategies that may no longer be appropriate, across to up to date default funds. Having sought legal opinion, conducted some extensive internal modelling and consulted with the Board, Fidelity is now considering moving assets in these legacy strategies on a ‘deemed consent’ approach. They are currently initiating a programme to map out timescales, activities and the tasks involved to execute this change. Given the volume and size of the activity along with the notifications that would need to be provided to members we expect the actual switch activity will be conducted towards the end of 2018.

It has been two years since Fidelity’s standard default investment strategy (FutureWise) was launched in response to Pension Freedoms. Since then the strategy has performed in line with expectations and with each of the component parts delivering what they were supposed to. As part of the strategy review process, Fidelity has taken on board some of the feedback received from advisers and has also done some work internally, evaluating the strategy as more data has become available on member behaviour post Pension Freedoms. Fidelity has been modelling some potential enhancements to the strategy and as part of that, has considered member impact as well as variables such as risk, cost and economic exposure. The conclusion of all this analysis was that the level of risk exposure for younger members could be increased in the reworked strategy. Fidelity is now looking to achieve this by increasing the allocation to equities (company shares) in the early stages of the strategy. In addition to the increased risk in the earlier years, the modelling has also altered the switching phase and now starts to reduce risk earlier as you approach your retirement.

Further information on the strategy will be released by Fidelity during the course of 2018. Fidelity will look to undertake this change before they move assets from older default strategies (as described above) in to the standard default FutureWise fund.

We will be continuing to monitor the performance of all investments, including those used in defaults strategies as well as investments individually chosen by you. If performance is not in line with expectations then actions will be taken.


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Focus for

2018 3. Costs and charges

As mentioned above there has been some progress on the requirements for investment managers to provide transaction costs to the IGC. Over the coming year we will be asking key investment managers how they minimise transaction costs and will be asking all investment managers for transaction cost information. Once we have this information we will be incorporating this into our value for money assessment for our 2019 report.

As noted above we would like to see all charges quoted to you to be explained in monetary amounts rather than as percentages, as our member research has shown that this is easier to understand. We have asked Fidelity to consider how information can be provided in this form.

4. Communications

The IGC recognises the importance of you being engaged with your retirement savings as a key factor in achieving good outcomes in retirement. A communications sub-committee has been established to ensure the IGC can spend enough time working with Fidelity on developing their communications. We will be looking at:

• Alternative methods of communicating with members who cannot access text communications easily

• Providing you with relevant communications at the right time for you to make decisions

• Making sure the letters that you receive from Fidelity are easy to understand

We want to make sure that the communications provided to you are of good quality and will be encouraging Fidelity to continue to use Member Forums to gain feedback on the communications. We will also be considering if there are additional member research methods that would be valuable.


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5. Sustainable investment

One of the key aims is to ensure that Fidelity is able to offer a varied and suitable range of funds that focus on sustainable investing. These include Environmental, Social and Governance (ESG) based strategies. ESG refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business. It is used by investors to evaluate corporate behaviour and to determine the future financial performance of companies.

Fidelity currently offers a range of ethical and ESG funds from across several investment managers and are looking to expand this range to include low carbon funds.

As an investment provider, Fidelity believes that high standards of corporate responsibility will generally make good business sense and have the potential to protect and enhance investment returns. Their investment process takes ESG issues into account when, in their view, these have a material impact on either investment risk or return in order to achieve the best possible risk-adjusted returns for investors. Fidelity seeks to gain an understanding of the relevant ESG issues applicable to investments through their internal research process and to identify these issues before they escalate into events that may potentially threaten the value of investments. Fidelity encourages integration of ESG issues into the investment decision-making process when it has a material impact on the investment or it has the potential to affect the long-term value of the investment. Fidelity’s ESG integrated approach covers all the asset classes, sectors and markets in which they invest.

Who is responsible for ESG integration in Fidelity?

Fidelity have recently hired a Head of Stewardship and Sustainable Investing, who will be responsible for overseeing Fidelity’s strategy and policies on engagement, voting and ESG. ESG integration is carried out at analyst level within the equity, fixed income and real estate teams in Fidelity and the portfolio managers are also active in analysing the potential effects of these factors when making investment decisions. A specialist in-house ESG team consolidates Fidelity’s approach to ESG and the implementation of their voting policies. Fidelity’s approach to integrating ESG factors into their investment analysis includes the following activities:

• In-depth research,

• Company engagement,

• Active ownership,

• Collaboration within the investment industry.


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Examples of ESG factors that Fidelity’s equity, fixed income and real estate investment teams may consider as part of their company and industry analysis include:

• Changes to regulation (e.g. greenhouse gas (GHG) emissions restrictions, governance codes)

• Physical threats (e.g. extreme weather, climate change)

• Cost implications (e.g. arctic mining, product recalls, fines)

• Brand and reputational issues (e.g. poor health and safety record, weak labour practices)

• Supply chain management (e.g. increase in fatalities, lost time injury rates, labour relations)

• Gaining access to raw materials (e.g. security of oil supply, conflict minerals, bribery and corruption)

• Product evolution (e.g. low energy products, renewable energy)

• Shareholder rights (e.g. election of directors, capital amendments)

• Corporate governance (e.g. Board structure and diversity, executive remuneration)

• Environmental performance data of buildings (e.g. energy and water consumption, GHG emissions and waste).

• Work practises (e.g. observation of health, safety and human rights provisions and compliance with the provisions of the Modern Slavery Act).

The IGC has not imposed its own views but over the coming year will be looking at this in more detail. If you have any views on this matter that you would like to feed into the IGC, please do get in touch using the contact details below.

Focus for

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We are keen to take your views into account and have considered your feedback in the following ways:

• Independent IGC members have interacted with Employers as part of the client forums held by Fidelity to hear more about their experience of working with Fidelity and to discuss the feedback you have provided to them on your pension plan.

• We have taken into account the feedback you provided in customer satisfaction surveys after dealing directly with Fidelity.

• Member forums have been held by Fidelity where small groups of members have an opportunity to voice their views and give feedback on different aspects of the service received. The Independent IGC members had the opportunity to sit in on the forums held during the year and feedback was provided by members on the 2017 Chair’s Report.

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We want to make sure that the communications provided to you are of good quality and will be encouraging Fidelity to continue to use Member Forums to gain feedback on the communications and we will be considering if there are other member research methods that would be valuable.


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THE DETAIL

Members of the IGC and independence criteria

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n Kim Nash • Independent Governance Committee Chair

Kim Nash is a Director at PTL Governance Ltd (PTL). She joined PTL in February 2012. Kim is a qualified Actuary and previously worked for Willis Towers Watson as an actuarial benefit consultant. Kim’s is able to bring her significant DC experience both as a Trustee and a member of governance committee to lead the IGC to develop the value for money framework and make comparisons on Fidelity’s performance against the wider industry.

n Rachel Brougham • Independent Member

Rachel is a trustee executive at BESTrustees Limited. Rachel is a qualified actuary and has worked in the pensions industry since 1988. Rachel’s experience includes advising both defined benefit (DB) and defined contribution (DC) trustee boards and the governance committees of various contract-based DC arrangements through which she has built up a detailed knowledge of the regulatory environment. With Rachel’s previous employer, the global consultant Mercer, she led a number of national initiatives including pension fund governance and risk management (both DB and DC) and pensions automatic enrolment. Rachel uses her governance and DC trustee experience to review Fidelity’s administration service and making sure Fidelity’s communication is effective enough to promote understanding and support member decision-making. Rachel is also the chair of the communications sub-committee.

n David Felder • Independent Member

David Felder is a Director of the Law Debenture Pension Trust Corporation (Law Deb). He joined Law Deb in July 2002 as a professional pension fund trustee. David is a Fellow of the Chartered Institute for Securities and Investment and was previously a senior fund manager, specialising in fixed income investment. David applies his extensive investment and trustee experience to help with the monitoring of the performance of Fidelity’s investment funds and the consideration of possible changes to the fund range offered to DC investors.

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n Julian Webb – Fidelity Representative

Julian is Head of Workplace Investing. Julian leads the overall strategic and corporate management of our DC businesses in the UK. Julian joined Fidelity in 2004 as Head of UK DC Business Development and later became Head of the UK DC Business. He has over 25 years’ experience in the corporate pensions market. Julian ensures that the Independent Members of the IGC are provided with all of the necessary support and information to undertake their roles effectively. In addition he ensures that the IGC members have full access to Fidelity resources and are consulted on business strategy and change projects.

n Paul Mason – Fidelity Representative

Paul Mason joined Fidelity in 2008 and has over 20 years’ financial services experience. He has held a number of roles prior to becoming Director, Strategic projects. Paul is a Director of FIL Life Insurance (Ireland) dac, a Trustee of Fidelity’s Master Trust Board and a member of Fidelity’s Independent Governance Committee. Prior to joining Fidelity, Paul spent 13 years with Lloyds Banking Group.

Paul is a Chartered Accountant and brings strong financial discipline to the role alongside 10 years of DC pensions experience where his focus has been on regulatory matters, operational practices and driving better customer outcomes.

You can find more information on the IGC in the Governance section on Fidelity’s website. We have also added a short video to explain the IGC role and to introduce the IGC members.

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Performance assessment

Every year the IGC and Fidelity go through a performance assessment process to review the effectiveness of the IGC. Part of this process is a skills assessment to ensure that across the IGC we have a wide range of skills and experience that are complementary to each other and to ensure the IGC has sufficient expertise and experience to act in members’ interests. Our assessment this year showed we have a broad mix of skills which are complementary and we are working on developing a succession plan to ensure this is maintained in future years.

We also consider how we have operated over the year and what improvements can be made to how we operate and interact with Fidelity. As a result of the review undertaken this year we have again requested additional time from our Relationship Director to ensure information requests to Fidelity are handled in a timely way and progress is made in the areas identified as the focus for 2018.

Independence of the IGC

PTL, BESTrustees and LawDeb are independent of Fidelity and are satisfied that they continue to meet the independence criteria set by the FCA. The FCA criteria are set out below.

Any potential conflicts of interest are recorded in a log and considered by the IGC in accordance with its conflict of interest policy.

The FCA independence criteria are:

• They or their representatives are not directors, managers, partners or employees of FIL Life (Fidelity), or any company within the groups, or paid by them for any role other than as members of the IGC nor are they members of the share option or performance related pay schemes of FIL Life nor have they been within the last five years

• They do not have a material business relationship of any description with FIL Life or any company within their group, and have not done so within the last three years (except as trustee Fidelity’s Mastertrust).

IGC CHARACTERS

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IGC REPORT 2018

Thank you to all members who have provided feedback and if you have any feedback that you would like to raise with the IGC directly we can be contacted on:

[email protected]

Fidelity IGC Chair PTL Park House, Park Square East Leeds LS1 2PW

IGC CHARACTERS

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