Presentation to Alzheimer Scotland pension members - pension plan improvements Presented by: Howard Finch August 2011 www.citrus4benefits.co.uk Citrus4Benefits Ltd is authorised and regulated by the Financial Services Authority

We will cover the following Our role and who we are Why you need to save for retirement The new pension plan How you join and what you need to complete and return Questions

Our role and who we are Alzheimer Scotland (AS) appointed Citrus4Benefits Ltd as employee benefit advisers in April 2011 We advise AS on how best to manage and develop the benefit arrangements We act as the Company adviser and do not provide individuals with advice We are an Independent and fee-based employee benefit adviser

We will cover the following Our role and who we are Why you need to save for retirement The new pension plan How you join and what you need to complete and return Questions

Why you need to save for your retirement The State Scheme - recent changes to reduce the burden on the state Earliest retirement age is now 55 State pension age for women is moving to age 65 by November 2018 State pension age will be increasing to age 66 by April 2020 Government removed the default retirement age of 65 from April 2011 Compulsory pensions being introduced from 2012 (NEST)

Why you need to save for your retirement The retirement cliff edge Item Detail Salary at retirement £18,000 Standard Income Tax code (2011/12) 747L Weekly net take home pay, after tax and National Insurance (excludes any pension contributions) £280.81 Pension Credit (weekly) (including full Basic State Pension) £137.35 Percentage reduction of take home pay 52%* * NB: Means tested income support and additional State Pension may be payable in addition, depending on your personal circumstances. This assumes you have no other pension benefits

We will cover the following Our role and who we are Why you need to save for retirement The new pension plan How you join and what you need to complete and return Questions

What is a Group Personal Pension? A collection of individual personal pension contracts established under a group umbrella Is set up by the Employer, but the plan belongs to the employee Plan is flexible and can accept regular and single contributions and transfers Employee takes plan with them if they leave employer but employer contribution will cease Employee is responsible for investment decisions and ensuring it will provide them with sufficient income in retirement

Group Personal Pension Scheme – How it works Working Years Employer Contributions Employee Contributions (80%) Tax Relief (20%) Pension Contributions Fund after Investment Growth? Retirement Tax Free Lump Sum: 25% of your pension fund Regular Pension for Life: Using remaining 75% of fund

Group Personal Pension Plan The New Scheme – 1 September 2011 Standard Life is still pension provider Lower annual management charges so any contributions you make work harder Employer and employee contributions to the new plan will start from September’s salary Existing Plan The last employer and employee contributions to this plan will be made from your August salary You can transfer your existing funds to the new Plan

Comparison of Personal Pension Plans Existing Plan New Plan Type GPP No change Contributions Employer contribution 10% Employee contribution – min 3% Investment manager Standard Life Default investment fund Balanced Managed Lifestyle Cautious Managed Profile II Scheme charges 1.0% annual management charge 0.5% on regular contributions 0.8% on transfers for 6years, then 0.5% Leaver charges 1.0% annual management charge (AMC) 1.0% AMC 1.3% for transfers, the 1.0% after 6 years Internet access Limited functionality New updated access

Group Personal Pension - Contributions Example – Employee earning £18,000 pa with 3% cont Monthly Gross Salary £1,500 Employee contributions of 3% £ 45 Employer contribution of 10% £ 150 Total contribution £ 195 Employee only pays £36 from take home pay (£45 less tax 20%) Standard Life add back £9 to make the employee contribution £45

Current Investments - review Current default fund - Balanced Managed Profile with lifestyle – only 40% of members use it A further 35 different funds being used Some members have chosen external fund managers that incur additional charges of up to 0.85% Some members have chosen funds with very high volatility and risk Many members still have funds in With Profits Funds Pension W/P Pension Millennium W/P

With Profits Funds Balanced attitude to risk – volatility rating 3 Considered outdated with restrictive growth potential over longer term Providers will not offer W/P for new plans Cannot add ‘lifestyling’ to W/P funds Members with W/P need to consider alternative for new plan Standard Life may apply a market value adjuster ( -) and terminal bonus (+) on transfer

Group Personal Pension Plan What investment options do I have? Employee input Full control (ability to choose from a long-list of external funds) Hands-on (ability to choose from a short-list of Standard Life funds) Hands-off (‘default’ fund) Most employees

New default investment fund Standard Life Cautious Balanced Profile II Aims to provide long term growth whilst investing in a diversified portfolio of assets that will include equities, fixed interest and property Volatility rating 3 (same as W/P funds) – lower volatility than balanced managed (rating 5) Lifestyling automatically changes the funds you invest in as you near retirement (10 years) Changes emphasis from growth funds to safer investments to reduce risk & volatility This is simply an option ~ you can still choose your own investments instead

Group Personal Pension Cautious Managed Fund: % split as at 30 June 2011 Structured to mitigate key risks Max 60% equity Minimum 50% Sterling Diverse asset classes 11 Active managers Lifestyle option

Group Personal Pension Cautious Managed Fund: Performance to 30 June 2011 Past performance is not a guide to the future. The value of your investment can go down as well as up Source: Standard Life Investments (Fund) and Morningstar (Sector)

Group Personal Pension Cautious Managed Fund: Performance to 30 June 2011 Past performance is not a guide to the future. The value of your investment can go down as well as up Source: Standard Life Investments (Fund) and Morningstar (Sector)

Group Personal Pension Cautious Managed II Profile (4CAU) 0% 20% 40% 60% 80% 100% 10 9 8 7 6 5 4 3 2 1 Standard Life Managed Cash Pension Fund Standard Life Protection Pension Fund Standard Life Cautious Managed Pension Fund % of investments Years to retirement Months

Additional shortlist of funds Standard Life Balanced Managed Profile II (existing default) Aims to provide long term growth whilst investing in a diversified portfolio of assets. Mainly invests in equities Volatility rating 5 – higher volatility Cautious Managed Includes lifestyling This is simply an option ~ you can still choose your own investments instead Full Control: Choose your own investments instead from 190 Standard Life and external funds

We will cover the following Our role and who we are Why you need to save for retirement The new pension plan How you join and what you need to complete and return Questions

What you have in your joining pack Letter from AS with information on changes Reply Slip – NEEDS TO BE COMPLETED TO JOIN Pension pack from Standard Life (including generic illustration) Details on on-line services Pre-paid envelope What you need to complete: Reply Slip and return to HR ASAP and no later than Friday 2nd September

What you have in your transfer pack Letter with info from Citrus4Benefits 2 Illustrations ~ from SL to compare old/new plans Transfer application form (pre-populated) Pre-paid envelope What you need to complete: Transfer form and returned to HR in sealed envelope by 23rd September

What happens if you don’t transfer? You will have 2 separate pension plans with Standard Life The old plan funds will remain on 1.0% AMC Regular premiums will go into new plan on 0.5% AMC basis You will get two annual statements

What else will I get? Once joined and contributions started: More info from Standard Life and policy docs (you should keep safe) A user name & password to use on-line services An annual benefit statement from Standard Life For transfers: Confirmation Standard Life have received forms Notice of cooling off period ~ 30 days After 30 days, confirmation transfer has been completed

Group Personal Pension Scheme Online access for Scheme members Registration process: Go to www.standardlife.co.uk Follow online instructions Forgotten password / USERID: You can reset this – go to the employeezone homepage Any questions call: 0845 60 60 092 See hand out for further details

Group Personal Pension Scheme Online access for Scheme members

We will cover the following Our role and who we are Why you need to save for retirement The new pension plan How you join and what you need to complete and return Questions

This presentation is issued by Citrus4Benefits and is solely for the use of Alzheimer Scotland and is not for general public distribution.   The contents of this presentation are based upon sources of information believed to be reliable and directors and employees of Citrus4Benefits do not accept any liability or responsibility in respect of the information or any recommendations expressed herein which, moreover, are subject to change without notice. Past performance should not be seen as an indication of future performance. The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested and may be affected by fluctuations in markets and exchange rates. Citrus4Benefits is the trading name for Citrus4Benefits Limited. A company Registered in England No.7032687 Registered Office: Whinfield House, Exton, Exeter EX3 0PZ Citrus4Benefits is authorised and regulated by the Financial Services Authority, no: 515037.