Equiniti’s proposed move to the national pension trust

1. Stuart Cameron, Pensions Services Director, Xafinity Paul Munro, Principal Consultant, Xafinity Equiniti’s proposed move to the national pension trust

2. The purpose of this presentation • Recap on the Company’s proposal to: • Close the Equiniti Pension Plan (EPP) and • Equiniti’s participation in the National Pension Trust (NatPen) • Overview of NatPen: • What is a DC Trust and how does it work? • Contribution rates • What investment options do you have? • Your benefit options at retirement • What happens if you leave? • Options in respect of previous pension benefits • Protection Benefits • Next Steps & Timings • Questions

3. What is the National Pension Trust? High quality trust based solution Benefits High: • Governance • Member engagement • Investment support • Decumulation support Low: • Governance requirements on employer • Costs to employer A comprehensive cost effective DC Trust based pension scheme – the only master trust to be awarded the PQM for its ‘core’ product

4. Strong Governance Independent Professional Trustee: • Governs Trust to a high level • Ensures clear communications channels between all providers • Ensures appropriate levels of: • Risk management • Internal controls • Administration service standards • Quality of record keeping • Maintains an action plan and corrects any problems The Trustee is wholly independent of all service providers

5. How does a Defined Contribution (DC) Trust work?

6. Annual Income Company PensionContributions Tax Free Cash £ Pension Pot converted into benefits MemberContributions Spouse’s / Dependant’s Pension How DC schemes work 3 2 1 Your Pension Account 4 Protection Benefits Company Payment

7. No change to Contributions

8. Investing the Pension Pot

9. Inflation

10. Asset class returns

11. How to Invest? • Previous slides explained why to invest • Key consideration is how to invest? • There are two ways to invest your contributions: • Choose from a range of Self Select Funds • OR • Choose a pre-defined Lifestyle Strategy • Members can rely on the ‘default’ fund, although this is not a recommendation

12. Investments PR concerns: • Investment return is a key factor in determining retirement income • Without support many members are not well placed to make decisions Independent Professional Trustee has: • Developed processes for regularly monitoring, reviewing and (if required) replacing • Default fund • Investment manager(s) • Fund Range • Determined investment strategy based upon membership • Ensured that the number and risk profile of funds reflect the typical member’s financial capability

13. Self Investment Options

14. Lifestyle Options

15. Purpose of a Lifestyle Strategy The Lifestyle Strategy is based on the following thoughts: • Member is willing to take material risk when some way from retirement to achieve a potentially higher return • Member is willing to accept high volatility when some way from retirement to achieve a potentially higher return • Members wish to retire at their Normal Retirement Age • Members are concerned about volatility in the run up to retirement • Members’ benefits at retirement: 25% cash, 75% of your account used to provide pension Therefore, ALL contributions – future contributions and transferred funds – are invested in the same Lifestyle strategy

16. Balanced Lifestyle Strategy (Default) • Other lifestyle strategies available: Cautious, Adventurous, and Global Equity • The Global Equity Lifestyle Strategy is similar to the default option under the Equiniti Pension Plan but at a lower AMC

17. Lifestyling may not always be appropriate • Will members be in the DC Plan at the agreed transition point? • Retirement at different age to Scheme Normal Retirement Age • Pension drawdown rather than annuity • Timing on investment switches • Range of self select funds offered will enable members to set their own strategy • Lifestyle investment is a strategy for you to consider, but this is not a recommendation

18. Making your investment choices • Xafinity believes it is important that members make a considered choice when it comes to setting their investment strategy. • This may involve consulting an independent financial adviser, though many individuals find that the information available on the NatPen website provides sufficient information and education to make an initial informed choice. Trust Investment Navigator The Investment Navigator is accessible on the NatPen Website. It has been designed to help provide you with a clearer view of: What kind of investor you are; and What kind of investment strategy could help you reach your long term goals Modelling tools Once your details have been uploaded and you access the secure NatPen site, you can model what your retirement benefits might be. The model will take account of your contributions, your current fund value and how long it is until your selected retirement date. The value of other DC benefits can also be included.

19. Monitoring your investment choices • It is important to review the value of your investments annually and to reconsider your investment strategy at least every three years. • Again, this may involve consulting an independent financial adviser. • Various information is available to you on the NatPen website:

20. Member Communication

21. Communications & Helpline Member Helpline Interactive web enabled systems* • Provides access to: • Booklet and Investment Guide • Fund factsheets • Administration forms • Benefit Statements • News Updates *Hard copies available • Allows member to: • Undertake “what if” calculations • Obtain real time annuity quotations • Request fund switches • View statement of account over any time period • View contribution and transaction details • Update personal details

22. Auto-enrolment – What impact will it have? • Staff are already automatically enrolled into the Equiniti Pension Plan from the day they join Equiniti. In future, new staff will be contractually enrolled into NatPen. • The contributions to the EPP (and to NatPen) exceed the amounts currently required to comply with the new statutory auto-enrolment requirements. • Equiniti Group’s “Staging Date” under the new auto-enrolment requirements is 1 September 2013. • As a result of the way the Equiniti’s pensions arrangements and contribution structure were established, auto-enrolment will have a low impact when compared to many employers’ pension arrangements. • For practical purposes, the Company intends to postpone the automatic enrolment of employees who have not yet joined the EPP until 1 November 2013.

23. Options at Retirement

24. Decision Tree • Trustee-established service to help you review your benefit options at retirement • Clear and simple language • Allows a member to understand their options • Information not advice • Professional and bespoke

25. Retirement Support • Open market (whole of market) • Benefit Design support • Escalation / Spouse / Guaranteed Period • Impaired life annuity • On-line access to model different bases • Prior to retirement • At retirement • Free Member Helpline • Tailored report

26. Retirement Support The NatPen approach addresses tPR concerns about retirement decisions Shopping around can be significantly beneficial The availability of an independently selected Annuity Service • Provides members with the best opportunity to select the option that is suitable for them • Ensures efficient processes are in place to convert members’ funds • Emphasises the importance of proper advice

27. Protection Benefits

28. Death in Service Benefits • If you join NatPen, the benefit payable on death in service is: • The value of your DC Fund at the date of your death; • In addition, an insured lump sum payment of 4 x Basic Salary* at date of death is payable from a separate Group Life Assurance trust established by Equiniti. • Pension benefits from previous arrangements may be payable in addition * Members are able to increase or reduce the level of lump sum benefit through Flex benefits system All employees are covered for 2 x Basic Salary, irrespective of pension scheme membership

29. What happens if I leave Equiniti?

30. Leaving Equiniti • If your employment with Equiniti ceases you can no longer be an active member of NatPen and contributions will stop • If you have been in NatPen for more than 2 years, you can • Leave your funds invested • Transfer the money from your pension account to your new employer’s pension scheme, (provided it will accept the transfer) or a personal pension. • If you have been in the plan for between 3 months and 2 years you can • Leave your funds invested (if more than £5k) • Transfer the money from your pension account (as above) , or • Take a refund of your contributions (less a tax charge).

31. Transfers in from other arrangements

32. Existing pension plans Other pension schemes • NatPen is able to accept transfers of benefits from other registered pension schemes • Alternatively, your other funds can remain where they are and will remain subject to the fund charges for your existing scheme. The Equiniti Pension Plan • Once current staff are enrolled in NatPen, the EPP will be wound up. • Before the wind-up commences, you will have the opportunity to transfer your funds in the EPP to NatPen (or to a separate arrangement of your choice). • Unless you transfer to NatPen or another arrangement, your EPP fund value will be transferred over to NatPen under an independently certified transfer plan agreed by the EPP Trustees. • Investment options letters will be issued to home addresses (Ensure yours is up to date!)

33. Forms for completion: • Beneficiary Nomination • Investment instruction

34. A separate form should be completed for the Death in Service lump sum, which is payable under a separate trust.

36. Next Steps • If the Company’s proposal is implemented you will need to: • Consider whether you want to change the level of contributions you are paying • Review your Investment options • Irrespective whether you join NatPen or not you should complete a Nomination Form to ensure that any lump sum benefits can be paid to your beneficiaries promptly. • Staff considering opting out are encouraged to seek personal independent financial advice

37. Any Questions?