Royal Free HSM Pension and Assurance Scheme Informal meeting with members on Thursday, 1 March 2012 Jack Foster, Director – Special Projects Extn 48223;

Purpose of Meeting Informal meeting to communicate to members about exploratory work being undertaken by UCL staff Wish to allay fears that members might have Have invited the trustee and pensions lawyer to respond to questions No decisions have been made – UCL is considering the options

Sustainability of Scheme Funding position of scheme has deteriorated from deficit of £1.5M in 2000 to deficit £12.5M in 2009 Employer contributions 33.6% Administrative costs £250k p.a. UCL annual contribution of £2.3M Compares with employer’s contributions in SAUL of 13% Backdrop of review of ‘final salary’ schemes generally

Review of Future Options UCL Finance Committee have asked to explore options for the future Early discussions with SAUL indicate transfer of benefits may be possible Desire to retain ‘final salary’ link Desire robust and secure alternative scheme (SAUL has 2,000 UCL members) SAUL is larger scheme so has the resources to be a more efficient/effective scheme

Preferred Option Accrued pension benefits into SAUL Benefits converted to SAUL’s basis (i.e. 1/80ths, plus cash) The capital value of past service benefits taken as a whole will not be lost Future benefits with SAUL accrue under ‘final salary’ rules If it goes ahead, transfer needs to occur before 1 July 2012 Existing RF scheme to be wound up at the end

The Process UCL undertaking more preparatory work to see if the preferred option works If UCL goes ahead, accrued benefits to be converted to SAUL basis on ‘bulk’ transfer basis Formal consultation process to start Members informed individually of conversion rate on transfer of benefits to SAUL Transfer to occur on basis of Actuary’s certificate

The Process (continued) Following consultation, final decisions made by trustee and employer Pension Fund assets transferred to SAUL, with UCL paying additional lump sum for any shortfall If the process moves forward, benefits of active and deferred members automatically convert to SAUL basis Pensioners continue to be paid under RF Scheme rules