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.
Overall, the Trustee believes that members of the Scheme are receiving good value for the charges and transaction costs that they incur as the assessment showed that members benefited from well-designed default investment strategies and a range of investment options as well as very low charges, amongst other benefits as summarised above.
Value for money for members
The Trustee reviews all member-borne charges annually (including transaction costs where available), with the aim of ensuring that members are obtaining value for money given the circumstances of the Scheme. The most recent value for members review covering the 2024 Scheme year took place on 9 June 2025. The assessment was completed taking account of the Pensions Regulator’s Code of Practice (Governance and administration of occupational trust-based schemes providing money purchase benefits) and accompanying guidance. Because there is no legal definition of ‘good value’, determination is subjective. The Trustee notes that value for money does not necessarily mean the lowest fee, and the overall quality of the benefit received by members was also considered in this assessment. The assessment was undertaken with assistance from the Trustee’s DC advisor and involved a wide assessment of value considering the key elements of the Scheme and agreeing relevant value ratings for each area, in addition to looking at the value attributable to member-borne costs and charges.
The assessment was undertaken with assistance from the Trustee’s DC advisor and involved a wide assessment of value considering the key elements of the Scheme and agreeing relevant value ratings for each area, in addition to looking at the value attributable to member-borne costs and charges.
Trustees assessment of value relating to member borne charges and transaction costs
The Bank pays the administration and DC fund management charges, so the member-borne charges are limited to additional DC fund expenses and transaction costs for the DC funds, which the assessment found compares very favourably to other DC schemes.
The Trustee’s investment advisors have confirmed that the additional expenses paid by members for the DC funds are competitive for the types of funds available to members. Members pay significantly less than members in other schemes as they only pay the additional expenses element for the DC funds. The Trustee also assesses the value of the total charges of the investment options (including charges met by the Bank) and found these to also be very competitive compared to other DC schemes.
In carrying out the value assessment, the Trustee also considered the wider benefits members receive from the Scheme, which include:
- the oversight and governance of the Trustee, including ensuring the Scheme is compliant with relevant legislation, and holding regular meetings to monitor the Scheme and address any material issues that may impact members;
- the design of the default arrangements and how this reflects the interests of the membership as a whole;
- the range of investment options and strategies;
- the quality of communications delivered to members;
- the quality of support services such as the Scheme website where members can access DC fund information online; and
- the efficiency of administration processes and the extent to which the administrator met or exceeded its service level standards.
The following table sets out the summary of how the Trustee has assessed value.
|
Area |
Assessment |
Commentary |
|
Charges |
Very Good |
The costs borne by members for investment are very competitive compared to similar schemes. Fees are considered as part of any investment changes, with discounts negotiated where possible. Members benefit from only paying additional expenses and transaction costs with other costs being covered by the Bank. |
|
Scheme Administration |
Good |
The agreed service levels for achieving a task are generally shorter than the standard levels in the market place, and these are achieved in the majority of cases for members with DC benefits. During 2024 the Trustee monitored the performance of its administrator on a regular basis, including via quarterly reporting on SLAs. For DC only members, SLAs performance has been above agreed target of 95% in 2024, with an average of 97.5%, which is an improvement on the previous year’s assessment. Hybrid Scheme administration performance was more mixed over the year with an average of 90.4%; however, this improved by the last quarter, with SLAs returning to near target levels. |
|
Scheme Management and Governance |
Very Good |
The Trustee demonstrated a high level of commitment to the effective operation of the Scheme through ongoing training. The Board regularly monitors member outcomes and activities through the quarterly dashboard, and regularly communicates with members on key relevant issues. The Board meets on a regular basis, with training undertaken ahead of meetings, and attends away days to focus more specifically on key areas of the Scheme. During 2024, the Trustee carried out a high-level assessment against the new General Code of Practice in the Scheme Year which indicates that the Trustee is meeting the vast majority of requirements. More detailed analysis is being carried out over 2025. |
|
Communications |
Very Good |
Communications are of a very good standard. Over the Scheme year the Trustee developed segmented communications to members setting out the changes to the three Targeted Investment strategies including letters, a changes guide and a video. A new DC investment guide was drafted, incorporating the changes to the strategies, and the annual member newsletter also reminded members about the changes. A dedicated futurefocus page for mid-career members was launched, which includes a podcast, the MOT guide, access to the Pensions Freedoms Planner as well as a blog on Midlife Money Mastery. New flyers were created with key messages from the nudges for members who have opted out of digital communications. |
|
At Retirement |
Very Good |
The Trustee has progressed with developing its offering for members who wish to drawdown their benefits and has chosen to signpost LifeSight as the post-retirement master trust provider. Members continue to be signposted to their retirement options, with support available in the form of retirement seminars/webinars. The Trustee monitors member behaviour at retirement regularly, to review when DC only members are retiring relative to their Target Retirement Age and their benefit choices. |
|
Default arrangement |
Very Good |
Different defaults are available to different cohorts of members, recognising their different requirements. |
|
Self-select investment range |
Very Good |
The Scheme offers a good range of DC funds covering all the main asset classes with active and passive options and the option to invest in targeted strategies designed for members who plan to use their DC pension pot to provide a flexible income (e.g. income drawdown), or for annuity purchase or a cash lump sum (reflecting the three broad choices members have at retirement). The agreed changes to the Global Equities – active Fund were implemented in March 2024. |
|
Scheme design |
Very Good |
The Scheme’s employer contributions are generous compared to the UK market generally, and the banking sector. New joiner communications have been refreshed, with a new dedicated page on futurefocus as well as more focussed pension information on Bank led communications for new employees.The Scheme also has relatively high assets under management for its level of membership resulting in an average pot size that is considerably large, pointing to the importance of the Scheme’s bespoke design for your members’ retirement outcomes |
The Trustee carries out regular reviews (at least every 3 years) of its legacy AVC arrangements with the last review undertaken on 28 August 2024. This review highlighted no material concerns with the AVC arrangements and confirmed it would be in members’ best interests to remain with these providers rather than be transferred into an alternative arrangement because members would suffer detriment (due to their age or the presence of penalties or loss of guarantees) if moved. The next full review is due to be carried out in 2027 with a light touch interim review planned in 2025.
The Trustee continues to close ‘empty’ legacy AVC policies and remove funds with no remaining members as and when these are identified. While the Trustee’s most recent review concluded that it would not be in members’ best interests to transfer their AVC assets to an alternative arrangement, the Trustee will continue to communicate with members on the possibility of moving their AVC assets to funds in the main DC investment platform with Fidelity.
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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.
Members 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
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.