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The BT Retirement Saving Scheme (BTRSS)

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Presentation on theme: "The BT Retirement Saving Scheme (BTRSS)"— Presentation transcript:

1 The BT Retirement Saving Scheme (BTRSS)
Helping you save for a more flexible retirement The BTRSS is what is known as a Group Flexible Retirement Plan. This is a product provided by Standard Life on behalf of BT and each BT employee who joins the BTRSS becomes a member of this group arrangement. Before we look at how it works, I need to give you an important message. Group Flexible Retirement Plan ©2011 Standard Life (Images reproduced under licence)

2 An important message This presentation will provide you with information only, to help you make an informed decision about your pension options. Please consider the content of this presentation very carefully as BT’s group pension is a valuable element of your benefits. If you are unsure as to the suitability of the plan, or any aspect of it, you should obtain financial advice. There may be a cost associated with this. We are supporting BT and this briefing will provide you with information on the pension options available to you. However, this briefing is not designed to provide you with financial advice. If, after watching this and reading the available literature, you feel that you need advice you should contact a financial adviser. Let’s look at the topics that this briefing covers.

3 Contents The BTRSS and you, saving for your future How do I join?
What will the BTRSS give me? The aim of this briefing is to help you understand some important questions that you need to consider as potential members of the BTRSS. You should also remember that there are other sources of information available to you, we will detail them later. Joining basis SMART Pensions How does the BTRSS work? How much are the payments A quick guide to investing Important issues

4 Helping you save for a more flexible retirement
The BTRSS and you The sooner you start saving, the more likely you will be to reach your retirement goals Saving enough for retirement is something that most of us put off for as long as we can (it seems years away). But the reality is that the sooner you start paying into a pension scheme, the more options you will have in the future. So, whatever your dreams, you can help yourself achieve them by planning ahead and joining the BT Retirement Saving Scheme. Helping you save for a more flexible retirement

5 What will the BTRSS give me?
Generous payments from BT which go towards your pension savings A wide range of investment options including the BT Share Fund A tax-efficient way to save for retirement By joining the plan you will be entitled to an employer payment from BT. You will benefit from all the tax advantages offered by pensions rules. There is a wide range of funds available for those who would like to choose from them, a suggested core range of funds for members to consider if they wish to build their own portfolio and a lifestyle option for those who do not wish to make active investment decisions. You will also be able to keep an eye on your retirement plan online through your very own retirement plan webpage that will also allow you to make changes in the future. Online access to the BTRSS, so you can keep an eye on your plan Tax and legislation are likely to change. The information given here is based on Standard Life’s understanding of law and HM Revenue & Customs practice at the date of presentation.

6 How do I join? Please read the important sections of the BTRSS website, the scheme booklet, Direct Offer letter, Key Features Document, Key Features Illustration and Your Pension Investment Choices Joining is straightforward! Before deciding whether you should join the scheme, please read the documents included on this website. These include the scheme booklet, “Your Pension Investment Choices” booklet and please pay special attention to the Direct Offer letter and Key Features Document. You may have already received some of these documents but should still visit the website. Unlike other new BT employees, you will not be ‘auto enrolled’ into the BTRSS because it is a condition of your employment. Instead, you will be asked to sign a BT confirmation form indicating your wish to become a member of the BTRSS during your consultation with BT. You will then receive a secure username and password to allow you to access your own plan details through this website where you can change your payment levels and your investment choices. You will then be asked to sign a BT Confirmation Form indicating your wish to become a member of the BTRSS during your consultation with BT A few days later, we will send you a Username and Password to allow you to access your own webpage on the scheme website where you can change payment levels and investment choices

7 Joining basis You make payments through SMART Pensions
When you are automatically enrolled into the scheme your payments will be made through the SMART Pensions arrangement that will be explained in more detail shortly. You will pay the equivalent of 5% of your pensionable salary into the scheme…. ….and BT will pay 8%. The total payments will be invested into the BTRSS Lifestyle profile. Remember that you will be able to change your payment levels and investment choices on your webpage once you are enrolled in the scheme. You pay 5% of pensionable salary BT pay 8% Payments invested in the BTRSS Lifestyle profile

8 What is the salary sacrifice arrangement known as SMART Pensions?
This is an arrangement where BT will make your payments into the scheme, reducing your gross salary accordingly If you decide to join the plan, you will participate in the salary sacrifice arrangement known as SMART Pensions. BT will make payments into the scheme, reducing your gross salary accordingly. This means that not only will you save on tax but you will also save on National Insurance payments as your salary has been reduced. The member booklet and scheme website show examples of how this works. Salary sacrifice is a change to your terms and conditions of employment which is deemed permanent by HM Revenue & Customs. It can also affect other benefits, transactions and borrowing levels that are based on salary, including some state benefits. More details of SMART Pensions are on this website and in the scheme booklet. - National Insurance savings this will be a change to your terms and conditions of employment it can affect state benefits, borrowings and other transactions based on salary Please read the scheme booklet or visit the BTRSS website for full details and examples of this arrangement.

9 What BT pays (including your payment through SMART Pensions)
How does the BTRSS work? What BT pays (including your payment through SMART Pensions) +/- Tax relief & NI Savings As a member, you will start to build up your very own pot of money for your retirement. BT make monthly payments to your individual retirement plan along with your payments via SMART Pensions….. …and you effectively receive immediate full tax relief and National Insurance savings on the money you pay in. Tax relief may be altered and its value to you depends upon your financial circumstances. We will charge you an annual management charge. The level of this charge depends on the funds in which you invest. More details about the annual management charge can be found in the “Your Pension Investment Choices” booklet on the BTRSS website. When you come to retire, you use your plan to provide you with a regular income that is taxed. However, you can choose to take upto a quarter of the fund as a tax-free lump sum - but this will mean that you have less income. Any potential investment return - Charges Your pension income - taxed as earned income Your tax-free lump sum - upto 25% of fund Tax relief may be altered and its value to you depends upon your financial circumstances.

10 How much are the payments?
Payments - % of pensionable salary What you pay What BT will pay 5% 8% 6% 8.5% 7% 9% 8% and over BT will make higher payments than the default level into your plan based on the level of payments that you agree to make. These are shown in this table. You can pay up to 100% of your salary into the BTRSS, however, the maximum payment BT will make is 9%. Full details of the payment levels are contained in the scheme booklet. The information in the table above has been provided by BT who set the payment levels. Please read the scheme booklet or visit the BTRSS website for full details.

11 How much are the payments?
If you pay at least 5% of your Pensionable Salary into the BTRSS, BT guarantees a minimum employer payment of £1,500 each year. This minimum payment will be applied pro-rata for part-time employees or people who leave during the year. If you pay at least 5% of your pensionable salary into the scheme, BT will also guarantee a minimum employer payment of £1500 each year. These minimum payments will be applied pro rata for part-time employees or people who leave during the year. The information in the table above has been provided by BT who set the payment levels. Please read the scheme booklet or visit the BTRSS website for full details.

12 A quick guide to investing (1)
BTRSS Lifestyle profile - Picked by BT and their adviser 10 Years + BlackRock Aquila HP (50:50) Global Equity Pension One Fund You can select investments from a full range of funds, however, BT & their advisers have selected a Lifestyle profile fund to be used for new members to the BTRSS. Once in the scheme, you can change the investment funds using the online services. Lifestyle profiles are an option that automatically change the funds you are invested in depending on the length of time until your selected retirement date. As you get closer to retirement, they move the emphasis away from growth funds to funds that prepare your pension investments for your pension benefits at your selected retirement date. Members investing in the lifestyle profile and who are 10 years or more away from retirement will have their payments invested in the BlackRock Aquila HP (50:50) Global Equity Pension One Fund. In the 10 year period to your selected retirement age, your funds will be automatically switched each month into the Standard Life Protection One Fund and the Standard Life Managed Cash One Fund. If you don’t have a selected retirement age, we will assume it is 65 and your funds will be automatically switched from age 55. Full details of the fund make up in the final ten years are detailed in the scheme booklet. It is important to remember that the default fund may not be right for you. Within 10 Years Standard Life Pension Protection One Fund Within 2 Years Standard Life Pension Managed Cash One Fund The value of an investment in any of the funds can go down as well as up. You may not get back as much as you invest. We strongly recommend you speak to a financial adviser before choosing funds.

13 Number of years from Selected Retirement Age
A quick guide to investing (2) BTRSS Lifestyle profile Number of years from Selected Retirement Age Fund 10 Years or more 9 8 7 6 5 4 3 2 1 3 Months Effective AMC* Growth Funds BlackRock Aquila HP (50:50) Global Equity Pension One Fund 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.28% Consolidation Funds Standard Life Pension Protection One Fund 72% 74% 75% Standard Life Pension Managed Cash One Fund 8% 16% 25% 0.25% Total Allocation * We charge for managing your plan and investments and take this charge from the fund value, this is 1% each year on the above funds. BT has negotiated special, preferential terms on your behalf which means Standard Life will rebate part of the AMC by adding extra units to your fund each month. This effectively reduces the AMC on each fund. The rebate varies depending on the funds you invest in and is either 0.72% or 0.75% each year on the above funds. These charges apply whilst members remain employees of BT. The annual charges for the BTRSS will be increased by 0.3% one year after leaving BT. Charges and rebates are not guaranteed, they are regularly reviewed and may be changed in line with developments in the relevant markets.

14 A quick guide to investing (3)
To help you understand your fund choices please refer to the investment section of the BTRSS website or the online booklets. For all investments, the value can fall as well as rise. Core Fund Range Picked by BT and their adviser You have the opportunity to consider whether you should select investment options to match your current views and circumstances based on the available investment range. In addition to the default option there is a wide choice for those who wish to use it whilst straightforward options for those who want less involvement. For all investments, the value can fall as well as rise. This plan is very flexible and allows you to switch easily between funds when you want to. There is a suggested core range of funds picked by BT and their adviser. These are for members who wish to build their own investment portfolio. The full range of funds are for those who are more comfortable making their own investment choices. As part of the range there are specialist funds such as Ethical and Shariah compliant. In addition there is a fund that allows you to invest in BT shares. For those who would like to choose from a wider market, there is the opportunity to use Self Investment options. However terms, conditions and charges apply and you must obtain financial advice. We charge for managing your plan and investments and we take this charge from the fund value. For more information on your investment choices and the associated charges please read the “Your Pension Investment Choices” booklet on this website or see the scheme booklet. Whether you decide to pick your own funds or prefer to opt for the default approach, you will always be in control of your investments, because you can change your choices at any time. Full Range More than 150 funds, BT Share Fund Self Investment Own portfolio (terms, conditions & charges apply - obtain financial advice) We charge for managing your plan and investments and take this charge from the fund value. Please read the “Your Pension Investment Choices” booklet on the BTRSS website or the scheme booklet for details of the funds and associated charges

15 Important issues It is important that you read the full pack contents on the BTRSS website, in particular the Key Features Document. This details the risks and commitments involved. There are important documents included on the scheme website and you should make sure you read them as they detail the risks and commitments. The information given in this briefing is based on our current understanding of law and HM Revenue & Customs practice. Tax and legislation are likely to change. The information given here is based on Standard Life’s understanding of law and HM Revenue & Customs practice at the date of presentation.

16 More information BTRSS website: www.btretirementsavingscheme.com
More information is available to help you make your decision on the BTRSS website provided by Standard Life…. ….and in the information pack that is available online. If you prefer to talk to someone about the plan you can call our BTRSS helpline. If you feel that you need advice, you should speak to a financial adviser. Online information pack including scheme booklet and key features document BTRSS Helpline:

17 More information BTRSS website:


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