The Penguin Pension Plan

Money Purchase Section

EXPLAINING YOUR BENEFITS

(April 2019) 201920192019

Contents

Page

1. Defined terms

2. Introduction

3. Who do I contact?

3. How do I join?

3. Salary Sacrifice

4. How much do I have to pay?

4. What should I consider before deciding how to invest?

5. Understanding risk

5. Lifecycle Options

6. How can I keep up to date with my Pension Fund?

6. What benefits are paid when I retire?

7. What benefits are paid when I die?

8. What happens if I leave?

9. What benefits are paid if I have to retire because of ill health?

9. What happens if I am on family leave?

9. What happens if I get divorced?

9. What about the State Pension benefits?

10. Pension Protection Fund (‘PPF’)

11. What else do I need to know?

1

Defined terms

Where the terms defined below are used in

the booklet they appear in italics.

ANNUAL ALLOWANCE

This is the maximum amount of tax-free pension savings that you

can build up over a Pension Input Period (PIP).These include any

contributions paid by you or the Company into the Plan. The Plan’s

PIP is the tax year. You can find further information about your

Annual Allowance on the HMRC website.

www.gov.uk/tax-on-your-private-pension/annual-allowance

ANNUITY

The pension that can be bought from an insurance company with

the value of your Pension Fund at your retirement date. An annuity

pays a regular income for the rest of your life.

STATE PENSION BENEFITS

Up until 5 April 2016 the Plan was contracted out of the earnings

related element of the State Pension Scheme, known as the State

Second Pension (S2P). This means that for contributions paid up to

5 April 2016 the trustee is required to ensure that the Plan provides

a minimum level of benefit. The Plan ceased contracting out on

6 April 2016.

DEPENDENT CHILDREN

Any child under the age of 18 or (at the discretion of the Trustee)

under the age of 23 and in full-time education or vocational training

who is your own child, your adopted child or any child of yours

conceived but unborn when you die. Any stepchild who is, in the

opinion of the Trustee, financially dependent on you may also qualify.

If a child is disabled, the Trustee may decide to pay a pension for as

long as the disability continues.

FLEXI-ACCESS DRAWDOWN

This is a facility you can set up outside of the Plan which allows you

to take income from your fund while it remains invested.

LIFETIME ALLOWANCE (LTA)

A limit imposed by the Government on the total value of all your

tax favoured pension benefits, excluding State pension. Any benefits

paid in excess of the LTA will attract a tax charge. For this purpose

all pensions earned throughout your life are counted, even if already

in payment. You can find further information about the LTA on the

HMRC website.

www.gov.uk/tax-on-your-private-pension/lifetime-allowance

NOMINATED DEPENDANT

If you do not have a spouse/civil partner, you may nominate a

dependant who must be financially dependent on you at the time

of your death. Those you can nominate may include a common

law husband/wife, or partner. Any nomination must be made in

writing and shall automatically be revoked on your marriage or

remarriage.

NORMAL RETIREMENT DATE

Your 65th birthday.

PENSION FUND

The value of units purchased with both your own contributions and

the contributions credited by the Company on your behalf plus the

value of any transferred-in benefits.

PENSIONABLE SALARY

Your annual basic salary as notified by the Company, restricted in

accordance with the Plan Earnings Cap.

PLAN

The Penguin Pension Plan is made up of a number of sections. This

booklet gives a summary of the benefits provided by the Money

Purchase section from November 2017 based on the current Rules

and the legislation and regulatory guidance in force at the date of

this booklet.

PLAN EARNINGS CAP

This is the limit imposed on the earnings upon which Plan benefits

and contributions are based. For details of the current Plan Earnings

Cap please contact the Pensions Department.

QUALIFYING SERVICE

Complete years and months of contributory membership of the

Plan, plus any service in respect of which a transfer has been made

to the Plan from a previous pension arrangement.

RULES

The documents that establish the Plan and detail the benefits to

be provided and how the Plan will be administered.The Rules and

legislation in force from time to time will override this booklet if

they conflict with each other.

SPOUSE/CIVIL PARTNER

The person to whom you are legally married, or have entered into

a civil partnership with under the terms of the Civil Partnership Act

2004.

STATE PENSION AGE

State Pension Age is currently 65 for men and rising gradually over

the next few years from 60 to 65 for women. From December

2018 the State Pension Age started to increase to reach 66 in

December 2020. It will then increase further up to a current

maximum of 68, depending on when you were born. Please see

the Department for Work and Pensions (DWP) website for more

details, at www.direct.gov.uk. Then input ‘State Pension Age’ into

the search engine.

TRUSTEE

The Trustee of the Plan is Penguin Pension Trustee Limited. Its

directors are responsible for ensuring that the Plan is managed in

accordance with the Rules.

2

Introduction

Changes in the way we work today,

combined with longer life expectancy, mean

it’s very unlikely that state pensions alone

will be enough to support us after we retire.

So although retirement might seem a long

way off, it’s important to start thinking

about it now.

The truth is the earlier you signed up to a pension scheme the

better your chances of being able to live comfortably in your

retirement.

This booklet is for the use of members of the Plan who became

members of the Money Purchase section before April 2016

when the Plan closed to new members. The booklet explains

the contributions you and the Company make to your Pension

Fund and how these will build up to provide you with

retirement benefits. It also describes the benefits which will be

provided by the Plan in the event of ill health or death in

service.

This booklet is intended to give a summary of the benefits provided

by the Money Purchase section based on the current Rules and

the legislation and regulatory guidance in force at the date of this

booklet If you require further clarification of your benefits you

should, in the first instance, contact the Pensions Department.

The Trustee of the Plan has appointed Aviva as the investment

provider for the Money Purchase section, but it’s up to you to

decide the funds in which to invest your Pension Fund. There’s

plenty of information in this booklet to help you and details of

the funds currently available are provided in the leaflet The

Funds. If you would like further information on the available

funds, fund factsheets are available on the dedicated Plan

website: https://workplace.aviva.co.uk/penguin/ which can also

be accessed via the PRH Portal.

If you do not want to get involved in the day-to-day investment

management of your Pension Fund, there is a Money Purchase

‘Lifecycle Option’ available - the Lifecycle Option (Default

Option). Details are provided in the Lifecycle Option Leaflet.

Copies of the Lifecycle Option Leaflet are available on the

documents page of the Scheme’s website:

https://workplace.aviva.co.uk/penguin/ on the intranet on

ROOST/DK Notebook, on the Penguin Random House Benefits

Portal or by contacting the Pensions Department.

Please note that neither Aviva, the Trustee, the Company, nor

Pensions Department staff are allowed to give you any investment

advice.

Key features

• Your contributions and the Company’s

build up in a Pension Fund which is used

to provide your future benefits.

• You choose your contribution

rate subject to a minimum of 3%.

Contribution rates in excess of 3%

are age-related rates which rise to a

maximum of 8% from age 45.Your

contributions are paid via Salary

Sacrifice .

• The Company’s contribution credits

to your Pension Fund double your

contributions, up to the maximum rate

of 16% from age 45.

• Choice of investment funds.

• Plan website, allowing you to monitor

your Pension Fund’s investment

performance, to switch investment

funds and to calculate estimates of your

pension at retirement.

Death in service benefits

• Lump sum of 4 x basic salary restricted

in accordance with the Plan Earnings Cap

and subject to any choices made under

the Company’s flexible benefits scheme.

• Pension of 33% of pensionable salary

to spouse/civil partner or up to 33%

of pensionable salary to a nominated

dependant.

• Dependent children’s pensions.

Other benefits

• Tax-free cash available at retirement

within statutory limits.

• Early retirement possible subject to

consent of Company.

• Late retirement possible.

• Ill-health retirement pension of 50% of

pensionable salary.

3

Who do I contact?

About investment options

When you joined the Money Purchase section you will have

received details of how to register for Aviva’s online service via

the Plan’s website. Registration with Aviva’s online service enables

you to obtain information about your investment options, allows

you to check the value of your Pension Fund and provides you with

the facility to switch investment funds quickly and conveniently.

There are also financial educational tools which may assist in your

financial planning by allowing you to see estimates of your pension

at retirement based on different levels of contributions.

The Plan’s website address is given in the section below.

Information about the fund options is also available on the

ROOST/DK Notebook Intranet or on the PRH Benefits Portal.

Plan website

Information about the Plan is available on the documents page of

the Aviva website: https://workplace.aviva.co.uk/penguin .The page includes

updates on current pensions matters and holds any Plan literature

which you may need at a later date, such as an Expression of Wish

form should your personal circumstances change.

About your contributions

If you have any questions about the deduction of your Plan

contributions from your salary please contact Group Salaries.

Other queries about the Plan

If you wish you can contact the Pensions Department at the

following address:

Pensions Manager

Penguin Pension Plan

20 Vauxhall Bridge Road

London

SW1V 2SA

Email: pensions@penguinrandomhouse.co.uk

Tel : 0207 840 8833

How do I join?

Membership of the Penguin Pension Plan is now closed to new

members. Anyone who is not a member of the Penguin Pension

Plan can join the Penguin Random House Pension Scheme Defined

Contribution section, information about which is available on the

Benefits Portal. For further details please contact the Pensions

Department.

Salary Sacrifice

Salary Sacrifice is an arrangement you make with Penguin Random

House to reduce your annual salary by the amount of your annual

pension contribution. Penguin Random House will then pay the

amount you sacrifice into your pension account via monthly

contributions which are treated as employer contributions.

By making your pension contributions via Salary Sacrifice you save

on National Insurance contributions that you would have otherwise

paid on that amount – this means that your contribution costs you

less and your take-home pay goes up a little as a result.

All active members are automatically opted into a Salary Sacrifice

arrangement. However, you can opt out of Salary Sacrifice by

e-mailing Human Resources that you wish to opt out of this

arrangement.

There are some circumstances where contributing via Salary

Sacrifice could impact on certain social security benefit

entitlements so you will need to be aware of this when considering

if salary sacrifice is the right option for you.

An example Salary Sacrifice is set-out below:

Reference Salary £25,000

Pension Plan Contribution of 5% of Salary £1,250

Basic Salary (after Salary Sacrifice) £23,750

National Insurance Contribution Savings at 12% £150

Transfers in

If you have benefits in a previous pension arrangement you may

be able to transfer the value of them to the Plan. However, the

Trustee can refuse to accept a transfer payment, particularly if it

does not cover any transferred contracted-out benefits. You should

seek advice from an independent financial adviser when deciding

whether to transfer benefits to the Plan. Y ou can obtain details of

independent financial advisers (IFAs) in your area by visiting

www.unbiased.co.uk. A financial adviser may charge you for their

services.

There is a transfer authority form on the ROOST/DK Notebook

Intranet, on the dedicated Plan website:

https://workplace.aviva.co.uk/penguin

and on the PRH Benefits Portal.

4

Percentage of pensionable salary

How much do I have to pay?

You may choose the level of contributions you want to pay within a

range of options, as shown in the table below. The minimum amount

is 3% of your pensionable salary.

The Company will double match the level of contribution that you

make. The range of options varies according to your age, as

below:

Age Minimum Maximum

You Pay

The Company

pays

Total You Pay

The Company

pays

Total

Under 30 3 6 9 5 10 15

30-44 3 6 9 6 12 18

45 and Over 3 6 9 8 16 24

You can increase or decrease your contributions each month in

0.5% increments within the limits above by means of the Benefits

Portal. The increases in maximum contribution rates apply on the

month following your 30th and 45th birthdays.

THE CURRENT TAX POSITION

You are not generally taxed on the value of the Company’s contributions.

Your own contributions qualify for relief from income tax at the

highest rate you pay. This means that if you pay tax at the current

basic rate of 20%, each £1 you contribute actually only costs you

80p. If you pay tax at 40%, then so long as you do not exceed the

annual allowance each £1 you pay costs only 60p.

Starting or changing AVC

contributions

Once you are paying the maximum basic contribution into the Plan,

which is double matched by the Company, you are eligible to start

paying Additional Voluntary Contributions (AVCs). Any AVCs you

decide to make are not paid via Salary Sacrifice and are not double

matched by the Company. But your AVC contributions are subject

to tax relief at your marginal rate.

You can start paying AVCs, or amend the amount of AVCs you are

paying, by logging into the PRH Benefits Portal See the instructions

in the Booklet “Explaining Your AVCs”.

What should I consider before

deciding how to invest?

Your personal circumstances may affect how you wish to invest

your Pension Fund. Things that may help you decide the appropriate

level of investment risk for you include:

• how long your contributions will be invested in a fund

• whether you have any other savings

• whether you want long-term or short-term growth

• your financial commitments and any other income you expect

to get

• your attitude to risk.

You need to weigh up all these things before deciding how to invest

your Pension Fund. You should also consider taking advice from an

independent financial adviser. You can obtain details of independent

financial advisers (IFAs) in your area by visiting www.unbiased.co.uk.

A financial adviser may charge you for their services.

Your tax relief is worked out automatically by Group Salaries, so

you don’t need to do anything. However, if your contributions

exceed the annual allowance, you will need to arrange for the

payment of any resulting tax charge. Your contributions are taken

through Salary Sacrifice, so in addition to income tax relief, you will

also pay lower National insurance contributions.

Amending Contributions

You can amend the amount of basic contributions you are paying, by

logging into the PRH Benefits Portal. See the instructions below.

1. Log onto the Benefits Portal in the usual way.

2. Once in click on “Select Benefits”. All the benefits you are

entitled to, including pension benefits, will appear on screen.

3. Then click on “Select Benefits”. This will take you to the next

page where you can amend/change your benefits. You will

then see “Pension Penguin Plan” appear.

4. Follow the on-screen instructions.

Example assuming pensionable salary of

£30,000 p.a. and that member has

selected a contribution rate of 5%

The figures below are based on the 2018/19 tax year.

Your pensionable salary = £30,000 p.a. or £2,500 p.m.

Your monthly contribution = £2,500 x 5% = £125 p.m.

Less tax relief at 20% = £25 p.m.

Less reduction in National Insurance contributions = £15 p.m.

Actual cost to you = £85 p.m.

Company contribution 10% £250 p.m.

Total contribution to Pension Fund £375 p.m.

5

Understanding risk

There are three types of risk that you need to think about:

INVESTMENT RISK

The value of investments can go down as well as up. You may get

back less than has been invested.

INFLATION RISK

This risk comes from funds that do not grow quickly enough to

keep up with the cost of living. This can happen with low

investment risk funds, which grow only gradually – for example, a

cash fund.

PENSION CONVERSION RISK

When you retire the Trustee will buy a pension with the money in

your Pension Fund to secure the minimum level of benefits you are

entitled to (see page 6).This is known as an ‘annuity’. Depending on

the options you choose at retirement the Trustee may purchase a

further annuity with the balance of your Pension Fund.

How much income can be bought depends on ‘annuity rates’, which

vary depending on market conditions. This means that the same

value in your Pension Fund may buy more or less income, depending

on the actual time your annuity is purchased.

Your age

Your attitude to risk is likely to change over time, so it is important

that you review your investment choice regularly. This will ensure

that your investments remain appropriate to your personal

circumstances.

While you are still a long way from your planned retirement age,

you may be more concerned about the inflation risk. You may

be willing to accept higher risk investment funds, because even

if the value of your Pension Fund falls for a while, you would have

longer for it to build up again. However, as you get closer to your

retirement age, there would be less time for your Pension Fund value

to recover from any decline. This means that you may prefer to

invest in funds with lower potential volatility in later years.

Furthermore, as you approach retirement age, you may want to

take into account the retirement options available to you and you

may become more concerned about the pension conversion risk.

There is no general rule on how you should invest your Pension

Fund throughout your working life, since you will need to take into

account your personal circumstances and attitude to risk.

It is strongly recommended that you seek financial advice if you are

unsure of how you wish to invest your Pension Fund. If you need any

advice about the investment options available to you, please contact

your financial adviser in the first instance.

How do I amend a Selected Retirement Age (SRA)?

If you wish to amend your previously selected or default Retirement

Age you can do so. To amend your SRA you will need to complete

a Selected Retirement Age Form. This form can be obtained

from either the ROOST or DK Notebook intranets or from the

dedicated Plan website at https://workplace.aviva.co.uk/penguin. Your

completed form should be returned to Aviva at the address given on

the form.

Lifecycle Options

If you do not select investments the Trustee will invest your Pension

Fund in the default Money Purchase Lifecycle Option. A Lifecycle

Option automatically switches investments as you get closer to

the Plan’s normal retirement age of 65. If you do not intend to

retire at age 65, you should choose a Selected Retirement Age, or

the Lifecycle Option investment process may not be suitable for

your individual circumstances. Please refer to the Penguin Pension

Plan Money Purchase Section Lifecycle Options leaflet for more

information. For example, if you retire before age 65, your Pension

Fund might not yet have transferred into less volatile funds. This

transfer is intended to help safeguard the value of your Pension

Fund as you approach retirement (although the value of

investments cannot be guaranteed as the price of units in all funds

can go down and up).

Can I place my Pension Fund in more than one of the funds listed?

Subject to the Rules of the Money Purchase section, you can split

the contributions between any number of the listed funds up to a

maximum of 10 or you may choose to put all the contributions into

one fund, unless you have selected one of the Money Purchase

Lifecycle Options in which case 100% of your contributions must

be invested in this option.

Your fund selection can be amended by going on-line and

registering at the dedicated Plan website:

https://workplace.aviva.co.uk/penguin by using your personal

log-on details, or by accessing this website via the PRH Benefits

Portal. The registration details required will be your Aviva

membership number that was forwarded to you when you first

joined the Plan.

You may want to obtain independent financial advice about your

options. You can obtain details of independent financial advisers

(IFAs) in your area by visiting www.unbiased.co.uk.

6

How can I keep up to date with my Pension Fund?

You can check on the current value of your Pension Fund by accessing

the dedicated Plan website at https://workplace.aviva.co.uk/penguin .

You will also receive a benefit statement annually showing the

contributions paid into your Pension Fund, the current balance of your

Pension Fund and the fund(s) in which you are invested. The statement

also includes an estimate of the pension your Pension Fund could

provide when you retire.

What benefits are paid when I retire?

Your normal retirement date is your 65th birthday, but you can retire

at any time after the age of 55, as long as the Company agrees.

It is important to consider the age at which you plan to retire when

choosing how your Pension Fund should be invested.

As a member of the Money Purchase section you were contracted

out of the State Second Pension up until 5 April 2016. Because of

this the Plan has to ensure that contributions paid up to 5 April

2016 provide a minimum level of benefits at retirement. This part

of your Pension Fund will be tested when you come to retire and at

least part of it will be used to purchase an annuity to provide this

minimum level.

Provided that your pre 6 April 2016 contributions are sufficient to

provide the minimum pension necessary, you will have the following

options:

1. subject to the agreement of the Trustee, take all of your fund as

a cash sum, 25% of which would be tax-free with the remainder

taxable at your marginal income tax rate (this option will not

be available if your benefits exceed the Lifetime Allowance); or

2. take up to 25% of your Pension Fund as tax-free cash (provided

your benefits are below the Lifetime Allowance) and purchase

an annuity with the remainder; or

3. purchase an annuity. Alternatively you may transfer the value of

your Pension Fund to an external pension arrangement, which

may provide the option to take your fund as one or more cash

lump sums or to use a Flexi-access Drawdown facility.

If your Pension Fund at Normal Retirement Date provides less than

the minimum level, the Plan will top up your fund to ensure that you

receive the minimum pension necessary. In this case, your pension

income will be regarded as Defined Benefit, rather than money

purchase, and your options will be to:

1. Take all your benefit in the form of a pension which will be

provided via the Plan rather than by purchasing an annuity.

2. Take a tax-free cash sum of up to 25% of the value of your

pension (provided your benefits are below the Lifetime

Allowance) with the remainder of your pension being provided

via the Plan.

3. Transfer the value of your Pension Fund, including the amount

topped up by the Plan, to an external pension arrangement,

which may provide the options to i) take the Pension Fund as

one or more cash lump sums, or ii) use a Flexi-access Drawdown

facility. If the transfer value is over £30,000, we will need to

have obtained confirmation that you have received advice from

an authorised independent adviser before any transfer to a

money purchase arrangement is made.

If you are looking to retire before your Normal Retirement Date and the

value of your Pension Fund is insufficient to provide the minimum pension

required, then you will not be permitted to draw your benefit via the

Plan. You will however still have the option of transferring your benefits

into an external pension plan.

The Government has guaranteed the right to free and impartial guidance

on pension choices for money purchase benefit. The guidance service

will be called ‘Pension Wise’. You’ll be able to get help and further

information on the Pension Wise website: www. pensionwise.gov.uk,

over the phone, or face to face about:

• what you can do with your pension pot

• the different pension types and how they work

• what’s tax-free and what’s not.

The amount of your pension or cash sum will depend on the size of

your Pension Fund at your retirement date which will vary according

to several factors including how much money has been invested

and for how long, the investment performance of your fund, the age

you access your benefits, the cost of exercising any right to transfer

your fund and any charges payable. If you purchase an annuity your

pension will also depend on the cost of the annuity.

Close to retirement you will receive details of the value of your

Pension Fund and retirement options.

Small or ‘trivial’ pots

If your benefits in the Plan are small, the Trustee may commute your

benefits for a lump sum. 25% of the lump sum would be tax-free

with the remainder taxed at your marginal rate of income tax. You

will be informed if this applies to you.

7

Late retirement

If you continue to work after Normal Retirement Date, your pension

position will be as follows:

• You may remain a contributing member of the Plan, with the

same Company contributions. Your death in service benefit

will continue up until age 70 provided that you are still

working for the company.

• If you draw your Plan benefits at or after Normal Retirement Date

although continuing to work, no further contributions will be

payable. Death in service benefits will continue to be provided

in accordance with your choices under the Company’s flexible

benefits scheme.

• You can withdraw from contributory membership of the Plan at

any time, in which case deferred pension benefits (or the option

to take a transfer) will apply, as described on page 8.

Providing your benefits

You will be sent a statement showing full details of your benefit

options when you get near to retirement. You may want to

obtain independent financial advice about your options at this

time.

You will also be notified if the Rules place any limits on the level of

your benefits.

Current tax position of benefit

payments

Your pension payments are taxable as earned income and there is a

maximum 25% tax-free cash sum.

The total value of all your pension benefits, excluding State pension,

cannot exceed the Lifetime Allowance (LTA), without attracting a tax

charge on the excess.

What benefits are paid when I die?

Death in service

If you die while you are still a contributing member of the Plan,

the following benefits are payable:

• A lump sum of four times your basic salary restricted in

accordance with the Plan Earnings Cap (the actual lump sum

may be higher or lower than this if you have taken part in the

Company’s flexible benefits scheme, which allows you to elect a

different multiple lump sum).

• A pension of 33% of pensionable salary to your spouse/civil partner

or up to 33% of pensionable salary to your nominated dependant

• Pensions for your dependent children.

The amount of your Pension Fund will be used to offset the cost of

providing these benefits.

LUMP SUM

The Lump sum death benefits are paid at the discretion of the Plan

Trustee. This means that although it is the Trustee who ultimately

will decide on beneficiaries, the Trustee will undertake to be guided

by your wishes as expressed on your Expression of Wish form.

Payment this way means that there is usually no Inheritance tax

payable.

It is important that you tell the Trustee who you would like to

receive any lump sum death benefit. You can nominate one or

more beneficiaries by completing an Expression of Wish form.

Although the form is not legally binding, the Trustee will take your

wishes into consideration.

You should remember to keep your Expression of Wish form up

to date and consider whether you need to complete a new form

if your personal circumstances change. You can obtain a fresh

Expression of Wish Form either from the Penguin Random House

Benefits Portal, the ROOST intranet, DK Notebook intranet, the

Plan’s own dedicated website https://workplace.aviva.co.uk/penguin or

from the Pensions Department.

PENSION FOR YOUR SPOUSE/CIVIL PARTNER OR

NOMINATED DEPENDANT

If you are married or in a civil partnership, a pension of 33% of

your pensionable salary at date of death will be payable to your

spouse/civil partner except that if the pension from contributions

up to 5 April 2016 exceeds the minimum contracted out benefits,

the Trustee may pay all or part of the excess to one or more of

your dependants. If you are not married or in a civil partnership,

this pension can be paid to your nominated dependant, or another

dependant, however it may be reduced by the Trustee if your

nominated dependant is more than 10 years younger than you. You

should make your nomination in writing on a Nominated Dependant

Form available from the ROOST or DK Notebook intranets,

or the Plan website https://workplace.aviva.co.uk/penguin or the Pensions

Department. Please note that this nomination will automatically

be revoked if you marry or remarry.

PENSIONS FOR YOUR DEPENDENT CHILDREN

Upon your death in service as a Money Purchase section member

your dependent children will receive a pension. The amount of the

pension is calculated as 8.5% of your pensionable salary at date of

death for each dependent child, up to a maximum of four. If no

pensions are payable to your spouse/civil partner, nominated

dependant or another dependant, the childrens’ pensions will be

doubled. The Trustee decides how this is shared out between your

dependent children. The pension is normally paid until the dependent

child reaches age18. However, if the Trustee agrees, it may continue

until age 23 if the child is in full-time education or vocational

training, or longer if the child is disabled.

PAYMENT OF DEATH IN SERVICE PENSIONS

Pensions to your spouse/civil partner/dependants/children if you

die in service are currently paid direct from the Plan rather

than purchased as annuities. The payment of Plan pensions is the

responsibility of the Trustee.

8

Death after leaving service

If you die after leaving Penguin service, but before you begin receiving

retirement benefits from the Plan, the following benefits are payable:

• Your spouse/civil partner will receive any minimum contracted-out

benefits in respect of contributions paid up to 5 April 2016 to

which he or she is entitled. The cost of these benefits is met

from your Pension Fund.

• Any balance of your Pension Fund remaining will be used to

provide a return of your own contributions plus interest paid as a

lump sum to one or more of your beneficiaries as the Trustee may

determine.

• Any balance of your Pension Fund remaining after the lump sum

has been provided will be used to purchase pensions for one or

more of your dependants as the Trustee may determine.

Death after retirement

If you die after you draw your benefits, the benefits payable will

depend on the options you chose on retirement (see pages 6&7).

What happens if I leave?

If you leave mid-way through a month no member contributions

will be deducted for that month and company contributions will

also not be paid.

The options available upon leaving service are:

• A deferred pension:

You may leave your Pension Fund invested in the Plan until

retirement. You won’t be able to pay any more contributions

into your Pension Fund but it will still remain invested. Fund

management charges will be deducted from your Pension Fund.

You should regularly review your investment choices and will still

be able to switch your choice of funds. Full details of how you can

change your investment choices can be found on page 5.

• A transfer to another employer’s pension scheme:

A transfer of the value of your Pension Fund, including the

Company’s contributions, to another registered pension

arrangement, if the trustees or providers of that arrangement are

able and willing to accept the transfer. If at the relevant time your

Pension Fund provides less than the minimum level of benefits the

Plan must provide (see page 6) you may not be able to transfer if

there is less than one year to your Normal Retirement Date.

• A transfer to a suitable insurance policy, or

• Immediate payment of your benefits (if you are at least over age

55 but please see page 6).

Opting out

You can leave the Plan at any time while remaining in service by

giving one month’s notice, in which case your benefits will be

treated as already described in this section. If you decide to opt out:

• You will need to request an Opt-out Form from the Pensions

Department.

• Death in service benefits will continue to be provided in

accordance with your choices under the Company’s flexible

benefits scheme.

• You will not be eligible for an ill-health pension (see below).

• You will not be allowed to rejoin the Plan although you will be

eligible to join the Penguin Random House Pension Scheme

Defined Contribution section.

• You may be automatically enrolled into the government pension

scheme - NEST at a later date (usually every three years) if you

meet certain age and earnings criteria.

9

What benefits are paid if I have to retire because of ill health?

If you are permanently unable to continue working because of

illness or injury, the Company may agree to your retiring on ill-

health pension, subject to appropriate medical evidence. In this case,

you will be able to retire and take your benefits immediately, even if

you are under 55.

Your ill-health pension will be 50% of your pensionable salary,

subject to former statutory limits as incorporated within the Plan

Rules. This pension is currently paid direct from the Plan rather

than purchased as an annuity. The payment of Plan pensions is the

responsibility of the Trustee.

The amount of your Pension Fund will be offset against the cost of

providing the ill-health pension benefits.

What happens if I am on family leave?

DURING PAID FAMILY LEAVE:

• The Company will continue to credit contributions into your

Pension Fund based on the full pay you would have been receiving

had you been working normally.

• The Company also picks up your contributions based on your %

of Statutory Maternity Pay (not full pay).

• You do not need to make any direct contributions from the

Statutory Maternity Pay you actually receive.

• Your entitlement to death in service benefits will continue as

normal while you are on paid family leave.

DURING UNPAID FAMILY LEAVE:

• During unpaid family leave you are not required to pay

contributions but you may do so on your return to work. If

you do, the Company will also credit your Pension Fund with

contributions based on the pensionable salary you would have

received if you were working normally.

• You continue to be covered for death in service benefits even if

you choose not to pay contributions.

What happens if I get divorced?

The courts are required to take pension rights into account in

divorce settlements and an option that is available known as a

‘pension sharing order’. Further details can be obtained from the

Pensions Department.

If your personal circumstances do change please ensure you keep

your Expression of Wish form updated (see page 7).

What about the State Pension benefits?

You will receive certain State Pension scheme benefits in addition

to Plan benefits. The State scheme has changed from April 2016 to

a new flat-rate state pension.

This change will affect men born after 6 April 1951 and women

born after 6 April 1953 (because they will reach their State Pension

Age (SPA) after 6 April 2016).Any individual who reaches SPA on or

before 5 April 2016 will be unaffected by the change to the single

tier state pension.

From April 2019, the new single-tier State Pension will be £8,767

per annum. You will need to have paid (or have been credited)

35 years of National Insurance contributions in order to be entitled

to receive the maximum. However, you should note that the

Government will reduce your state pension to reflect any periods

that you may have been contracted-out of the S2P. This will include

your period of pensionable service up to 5 April 2016 as a member

of this section of the Plan.

The Government has carried out a calculation as at 6 April 2016 to

determine your ‘starting amount’ single-tier state pension. This will

involve a comparison of the amount that you would have built up to

6 April 2016 if the new structure had been in place throughout your

working life, with the amount you have actually earned to 6 April 2016

under the current system. Your ‘starting amount’ will be whichever

method results in the higher amount as at 6 April 2016. For the

avoidance of doubt, the ‘starting amount’ will reflect reductions for

periods when you may have been contracted-out of S2P.

If your ‘starting amount’ state pension benefit is greater than

£8,296 per annum then these will be protected. However, you

would not be able to earn any more state pension in the future. If

your ‘starting amount’ state pension is less than £8,296 per annum

then you would have the opportunity to earn more state pension

through future National Insurance contributions.

The changes, and in particular the transitional arrangements as

at 6 April 2016, are complex and will depend on your personal

circumstances. It will be important for your personal financial

planning for retirement that you understand what your state pension

is likely to be. We therefore strongly suggest that you contact the

Government for a state pension forecast. Further information can be

found at: https://www.gov.uk/state-pension-statement.

Please note that this service is only available, at present, for those

over the age of 55.

Further information about the new single-tier State Pension can be

found at:

https://www.gov.uk/government/policies/state-pension-simplification

Finding out about your State benefits

If you want an estimate of your State pension you can request a

forecast from the State Pension Forecasting Team at the Department

for Work and Pensions online at the address below or by submitting

an application form to the address below or by calling them.

Future Pension Centre

The Pension Service

9 Mail Handling Site A

Wolverhampton

WV98 1LU

Tel: 0345 3000 168

www.gov.uk/future-pension-centre

10

Pension Protection Fund (‘PPF’)

The PPF was set up to protect pension benefits. It is a type of

‘compensation plan’ and an annual levy is paid into the fund by

all final salary arrangements like the Plan’s Penguin and Final Pay

sections. The PPF will provide compensation if the Company

becomes insolvent and the Plan does not have enough money to

pay the defined benefits promised to members. The issue of what is

a defined benefit has been complicated by recent cases and changes

in legislation.

In certain circumstances benefits from the Money Purchase section

may be classed as defined benefit and may be eligible for the PPF.

For example:

• where your Pension Fund in respect of the 6 April 2016

contributions is insufficient to provide the minimum level of

benefits that you are entitled to under the contracting out

legislation; or

• where pensions are paid directly from the Plan (e.g. on ill-health

or to your dependents if you die in service).The benefits provided

by the PPF would be less than the full amounts previously due

from the Plan.

Further information and guidance are available on the PPF’s website

at: www.pensionprotectionfund.org.uk Or you can write to: PPF,

Renaissance, 12 Dingwall Road, Croydon, Surrey CR20 2NA

The Rules of the Plan

This booklet summarises the benefits available under the Money

Purchase section as at April 2019.The detailed description of the

benefits is set out in the Rules. If there are any inconsistencies or

conflict between the Rules and this booklet the Rules and the

legislation in force from time to time will override the booklet.

Further information

If you have any questions about the information contained in this

booklet, or the benefits or options available to you, please contact:

Pensions Manager, Penguin Random House,20 Vauxhall Bridge Road,

London, SW1V 2SA

or by e-mailing :- pensions@penguinrandomhouse.co.uk

or by phone on 0207 840 8833.

11

What else do I need to know?

Keeping you informed

As a member of the Plan, you will receive or have access to the following information:

You can obtain a copy of the Rules on request from the Pensions Department

INFORMATION What is it? How to access it

This booklet This booklet explains the key

features and benefits of the

Money Purchase section

This booklet is available from the

documents page of the Plan website

https://workplace.aviva.co.uk/penguin

Plan website Plan literature and forms, as

well as a Latest News update

section

The Plan website is available without the

need for a password or registration at:

https://workplace.aviva.co.uk/penguin

Projected Pension Statement A projection of the value of

your Plan benefits

You will receive a projected pension

statement each year

Report to members A summary of the Trustee’s

Report and Accounts

(see below)

You will receive a copy of this report

each year. Copies can be accessed via the

Plan’s website:

https://workplace.aviva.co.uk/penguin

Trustee’s Report and Accounts A full report of the Plan’s

finances and operations

The full report is available from the

Pensions Department

The Rules The legal document governing

the Plan and the benefits it

provides

You can obtain a copy of the Rules on

request from the Pensions Department

Penguin Random House Benefits

Portal

The Benefits Portal allows you

to start or amend your pension

contributions.

To log onto the Benefits Portal you

need just your username and a unique

password given to you after you join

the company.

12

Plan Management

The Plan is managed by Penguin Pension Trustee Limited (‘the Trustee’)

and currently has five directors. Collectively, they are responsible

for managing the Plan in accordance with the Rules and relevant

legislation, and in the best interests of the members. To carry out

these duties effectively the Trustee uses the services of various

professional advisers. The names of the current directors and the

professional advisers are listed each year in the Trustee’s Report

to Members.

Additional Voluntary Contributions

(AVCs)

You may elect to save more money for your pension by making

Additional Voluntary Contributions (AVCs) over and above

your normal Plan contributions. You can choose from a range

of investment options with Aviva.

If you make AVCs, at retirement you may use the money that builds

up in your AVCs Pension Fund to take a cash sum or buy an annuity.

Alternatively, you may be able to transfer the value of your AVCs

to an external pension arrangement, which may provide the option

to use a Flexi-access Drawdown facility. AVCs are invested separately

from regular contributions made by you and the Company.

AVCs qualify for income tax relief in the same way as your normal

Plan contributions, so long as you do not exceed the annual

allowance, which mean they are a tax-efficient way of saving for your

retirement. However, unlike your Plan contributions, the Company

will not pay matching contributions on AVCs.

You are currently allowed to pay up to 15% of your total taxable

earnings (subject to the Plan Earnings Cap), less your chosen level of

Plan contributions, to the Plan’s AVCs arrangement. Please refer to

the Plan Booklet “Explaining your AVCs” for more information.

You can start, amend or stop your AVCs by logging onto the

Penguin Random House Benefits Portal.

Other pension arrangements

You have the opportunity of paying into other pension

arrangements, at the same time as contributing to the Plan. You

will receive tax relief on contributions in total up to 100% of

your annual earnings (or £3,600 if greater), subject to the annual

allowance.

Disputes resolution procedure

If you have a complaint or grievance about a decision or the

way you’ve been treated in respect of the Plan, the Pensions

Department will always try to sort it out informally first. If the

matter cannot be resolved in this way, the Trustee has a formal

process called the ‘disputes resolution procedure’ which applies to:

• Plan members

• The dependants of members

• Prospective members.

If you have already begun Court proceedings or the Pensions

Ombudsman is already investigating your complaint, the procedure

will not apply to you. Grievances about your employment are

not covered by this procedure. You should refer to your Human

Resources Department to find out how to deal with these.

First, you need to write to the Pensions Manager at 20 Vauxhall

Bridge Road, London SW1V 2SA, stating the reason for your

complaint or grievance. You should say that you want it to be

formally investigated under the disputes procedure. You will

receive an acknowledgement of your complaint within five working

days. The Pensions Manager will respond to your complaint within

two months of receiving your letter.

Next, if your problem isn’t settled to your satisfaction, you can

write to the Trustee also at 20 Vauxhall Bridge Road, London,.

You will need to give the reason why you are dissatisfied with the

Pensions Manager’s decision and ask the Trustee to reconsider your

complaint. The Trustee will normally reply within two months of

your request. If a delay is expected, you will be told when you can

expect a decision.

If the problem still hasn’t been sorted out, you can refer it to

The Money and Pensions Service (MAPS). This is an

independent voluntary organisation with local advisers who are

experts in pension matters. The Money and Pensions Service is

available to assist with any pension queries which members may

have failed to resolve with scheme administrators. You can find

out the name and address of your nearest local adviser from

your Citizen’s Advice Bureau, or you can contact the MPAS

headquarters at:

Tel: 0115 965 9570

Website: www.moneyandpensionsservice.org.uk

MAPS is also available to assist members and beneficiaries with

any pension queries they may have.

Finally, if MAPS doesn’t resolve the dispute, you can go to the Pensions

Ombudsman who will investigate and determine your complaint or

dispute as an independent arbitrator. The Ombudsman’s decisions

in cases he investigates are legally binding, but the Ombudsman will

only take on your case if you have already tried to settle it through

the earlier stages of this procedure. The Ombudsman’s address is :-

The Pension Ombudsman

11 Belgrave Road

London

SW1V 1RB

Tel: 0800 917 4487

Email: enquiries@pensions-ombudsman.org.uk

www.pensions-ombudsman.org.uk

13

If you want more information about the disputes resolution

procedure, you should write to the Pensions Manager at 20 Vauxhall

Bridge Road, London SW1V 2SA.

The Pensions Regulator (TPR)

TPR is responsible for monitoring the running of occupational

pension schemes. It can intervene where trustees, employers or

professional advisers have failed in their duties. TPR’s address is:

Napier House

Trafalgar Place

Brighton

BN1 4DW

Tel: 0870 606 3636

Email: customersupport@thepensionsregulator.gov.uk

Website: www.thepensionsregulator.gov.uk

The Pension Tracing Service

The Pension Tracing Service acts as a tracing agency for members of

pension schemes who have lost touch with their former employers,

or the trustees or providers of their previous schemes. The address

of the Pension Tracing Service is:

Pension Tracing Service

The Pension Service

Tyneview Park

Whitley Road

Newcastle upon Tyne

NE98 1BA

Tel: 0345 6002 537

Website: www.gov.uk/find-lost-pension

Tax approval

The Plan is a registered pension scheme under the Finance Act

2004.

This means that within certain limits, you receive tax relief on your

contributions and you don’t have to pay tax on the Company’s

contributions to the Plan. In addition, certain Plan benefits and some

investment returns are tax-free.

The tax regime for pension schemes includes the concept of

‘authorised’ and ‘unauthorised’ payments. Unauthorised payments

can trigger tax charges for members and other beneficiaries

and schemes. In view of this, no benefits which would constitute

unauthorised payments will be paid from the Plan unless the

Company and Trustee agree. You will be notified if you are affected

by this restriction.

Data Protection

The Trustees act as data controllers of your personal data for the

purposes of the General Data Protection Regulations. In addition

the Scheme Actuary and Aviva also acts as a data controller when

carrying out certain statutory activities for us.

The protection of your personal data is very important to all of us

– to you, to the Trustees, to the Actuary and to Aviva. As data

controllers, the Trustees, the Actuary and Aviva have a duty to

keep your data safe. They take all reasonable steps to ensure that

this is the case but if you have any questions about how your

information is used or kept secure, please contact the Pensions

Manager at 20 Vauxhall Bridge Road, SW1V 2SA.

Assigning your benefits

Your Plan benefits are strictly personal and, with the exception of

pension sharing orders, cannot be assigned to anyone else or used

as security for a loan.

Changes to the Plan

The Company aims to maintain the Plan in the form described in

this booklet. However, it has the right to amend or discontinue the

Plan at any time, subject to the provisions of the Rules and, where

required, the consent of the Trustee. You will be kept fully informed

of any changes that are introduced.

14

PPP0002 NE04006 01/2018