Your pension savings in the DC Section of the Plan are held and invested in investment funds.

 

The Trustee monitor the Plan’s funds to ensure they are suitable for the membership, but members are responsible for their own selection from the range available. Part of the Trustee role includes having to make available to members details of the on-going charges incurred by members in investing in each fund.

Each fund is different depending on:

  • Its aims – one fund may concentrate on growing your pension
    savings, while another may concentrate on protecting the value of
    your pension savings
  • Its investment – some funds might choose to invest for long-term
    growth, while others might aim for stability over the short-term.

What a fund aims to do, and what it invests in, determines how much you’re charged as well as how your pension savings are expected to grow.

There are different types of risk when investing in any fund, the main one being that the value of your pension savings can go up as well as down and may not keep up with inflation (the increasing costs of goods and services).

Why are you charged?

You’re charged by the manager of each investment fund as part of the work involved in investing and looking after your pension savings.

This work may involve making changes to what the fund invests in because of the aim of the fund or because of a change in the market. You may have also asked to invest in a different fund.

In general you’re charged based on a percentage of your total pension savings in that fund.

It’s important that you look at the costs and charges of a fund alongside the value that the fund is trying to give you.

This value can come in many different forms depending on the fund you choose, for example:

  • growing the value of your pension savings
  • protecting the value of your pension savings to keep them stable
  • collecting your payments and keeping them secure

This value can also come from:

  • all the systems and people’s time needed to look after your policy
  • the specialist knowledge required to understand the markets and invest
    your pension savings
  • any communication, websites and information that help you understand
    and keep you up to date with your pension savings

More detailed information on this can be found in the Chair Statement in the Store.

The table below shows the age, salary, contribution and starting fund sizes used for the purpose of the illustrations:

To view the illustrations please review the Default fund and Other fund web pages under the Discover menu at the top of this web page.

CriteriaNew Section Allowance membersNew Section Allowance membersNew Section 'Over the Cap' membersNew Section 'Over the Cap' membersDB AVC payersDB AVC payersDeferred New Section membersDeferred New Section members
Illustrative members1a (youngest)1b (average)2a (youngest)2b (average)3a (youngest)3b (average)4a (youngest across the Plan)4b (average across the Plan)
Age2035304524522050
Salary£30,500£54,000£89,100£93,500£36,200£60,700n/an/a
ContributionsIn line with age related contribution structure (based on allowances)In line with age related contribution structure (based on allowances)In line with age related contribution structure (based on salary over the DB Earnings Cap)In line with age related contribution structure (based on salary over the DB Earnings Cap)£450£10,680n/an/a
Fund size£700£7,900£4,600£27,200£2,300£41,200£700£41,900