Governance Statement

Covering the period from 1 January 2019 to 31 December 2019 (the “Scheme Year”) and relates only to DC benefits (including AVCs and hybrid components) in the Scheme.

The Trustee needs to tell you more information about the Scheme including

  • What the Scheme’s default investment strategies are and the Trustee’s statement of investment principles relating to these arrangements;
  • Whether the default investment strategy has been reviewed during the Scheme year and any resulting changes from this review;
  • The charges and transaction costs that apply for the Scheme’s default strategies and for the funds which you are able to self-select during the Scheme year
  • Whether the Trustee thinks the charges and transaction costs are good value for money
  • An illustration showing the effect of costs and charges over a period of time.
  • The requirements for processing financial transactions: and
  • Trustee knowledge and understanding.

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Governance Statement

There are 4 key areas in the Governance Statement:

More information

Default investment strategy 

The Trustee has made available a range of investment funds for members. Each member is responsible for specifying one or more funds for the investment of their account, having regard to their attitude to the risks involved. If a member does not choose an investment option, their account will be invested into the default option applicable to them, which is managed as a “lifecycle” strategy (ie it automatically combines investments in proportions that vary according to the time to retirement age). The lifecycles are 100% invested in equities until twenty years from a member’s target retirement age from which point they transition gradually into less risky assets appropriate to the outcome targeted.

Member Charges 

The Trustee is required to set out the charges incurred by members during the Scheme Year in this Statement. As the sponsoring employer pays the DC investment fund annual management charges, platform expenses and all other administration expenses, the member borne charges are limited to the additional fund expenses incurred by the underlying managers in the day-to-day running of the funds (for example, custodian fees etc), with the exception of some legacy AVCs funds

Value for money for members 

The Trustee carried out a value for members’ assessment, looking back over the Scheme year to 31 December 2019. The Trustee is required to assess the extent to which member borne charges and transaction costs for the Scheme Year represent good value for members.

Illustration of charges and disclosures costs 

The Sponsoring employer currently pays the AMC platform expenses and administration costs. Additional expenses (“AE”) are covered by members and are those costs incurred in the management of the underlying funds which are, by nature, flexible and therefore fall outside of the AMC. The Trustee has provided an illustration of the impact of the charges and costs on members pension pots for the default options and four funds from the Freechoice range.