Key Features (The bridport Pension Trust) This key features document provides you with details of the main features of The bridport Pension Trust (the “Pension”). Please ensure that this product is suitable for your needs by seeking the advice of a financial adviser and read this key features document in conjunction with any illustration(s) that your financial adviser has provided you with. A copy should be kept with your scheme documents.
Its aims •
To build up an asset pool to generate stable growth in a tax efficient manner over the longer term. This asset pool will then provide you with an income in retirement.
Your commitment •
To keep the Pension until you take your benefits and then use it to buy an income in retirement.
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Inform us immediately if you stop living in Jersey
Risk Factors •
What you get back isn’t guaranteed. It will depend on the performance of your investments and annuity rates if you purchase an annuity in retirement.
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The value of your investments can go down as well as up.
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When you retire, your pension income may be lower than expected if : ¾ ¾ ¾ ¾ ¾
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Payments into the Pension are stopped; Investment performance is lower than expected; The returns on long-dated gilts, which can determine the level of income you receive when you take your benefits, are lower than expected; You take your pension prior to the normal retirement date; and Tax rules change (the tax treatment referred to in this document may change by the time you reach retirement).
The investment funds available to you with the Pension have different levels of risk and you should discuss which one is suitable for your needs with your financial adviser. You will find details of the investment funds later in this guide.
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Questions and Answers What is a Personal pension Plan? It is simply a savings plan to help you save for your retirement in a tax-efficient manner. How flexible is it? You can make one-off payments at any time. You can make regular payments based on a percentage of your salary, so they will go up or down in line with your salary, or you can make regular payments of a fixed amount. Regular payments can be altered at any time. You can stop making payments and then restart them again at a later date. Doing this, will reduce the income you receive in retirement. When can I take my benefits? You can take your benefits at any time between the ages of 50 & 75. What might I get when I take my benefits? Your Pension value will depend on: ¾ ¾ ¾ ¾
How much is paid in; How long the payments are invested for; How well the investments perform; and Any charges.
The pension calculator provided to your financial advisor is designed to give you an indication of what you MIGHT receive and should be used for guidance purposes only. Your retirement income will depend on the way the money is invested at retirement. What choices will I have to make when I take my benefits? You may be able to take 30% of your Pension as a tax-free cash sum with the rest taken as an annual income. This income will be taxed as earned income for the rest of your life. If you take part of your Pension as a tax-free cash sum, your income will be smaller. If you are in severe ill health, you may be able to take an income from this Pension earlier than the minimum pension age. You do not have to buy an annuity when the time comes to take your benefits. You can set up a drawdown contract or annuity equivalent, which would provide you with a regular income. This income however is not guaranteed in the same way that an annuity contract is. To be eligible to enter into a drawdown contract, you have to have a minimum guaranteed retirement income equivalent to Jersey’s maximum state pension. Full details of your retirement options will be provided by your financial adviser prior to your normal retirement date.
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What happens to my Pension if I die before I take my benefits? We will forward the full value of your Pension to the trustees of the pension scheme, who will pay the money out in line with the rules. This will normally be in the form of a lump sum payment (tax-free if it does not exceed 5 times the primary beneficiary’s annual relevant earnings) to your nominated beneficiaries. What happens to my Pension if I die after my retirement? There are two options available to you: 1. Allow the pension to continue with your nominated second beneficiary receiving the benefits. On the demise of the second beneficiary, the Pension will form part of the second beneficiary’s estate after the Trustees have deducted the standard rate of income tax (currently 20%); or 2. Opt for a lump sum to be paid, representing the remaining balance of the Pension, after deduction, by the Trustees, of half the standard rate of income tax (10% based on the current standard rate). How much can be paid into my Pension each year? You and your employer can make contributions as follows: ¾ ¾ ¾
Total pension contributions must not exceed your relevant earnings up to a maximum of £50,000.00 per tax year. Employer contributions are in addition to your personal allowance, but must be regular. Transfers from existing Jersey pensions and qualifying transfers from a UK pension plan may be transferred in full.
If you have an existing pension plan with a previous employer or you have a personal pension plan, you can transfer that fund into this Pension. There is no guarantee that doing so will increase your retirement income and you should seek advice from your financial adviser before making any transfer. Where are the payments invested? We invest all of the contributions in the investment funds you choose (in conjunction with your financial adviser). We offer a range of risk rated funds as detailed in the investment strategy section, The Optimised Fund key features document and the Prospectus. You can switch between our various risk-rated funds monthly (currently). We would recommend that you speak to your financial adviser before making any switches. It should be remembered that the value of your Pension will rise and fall depending on the investment performance of the fund. What about tax? You will make payments to the scheme gross and claim tax relief via your annual tax returns. If you take a cash lump sum, it will normally be tax-free, however, you may have to pay income tax on your regular retirement income. This will depend on the total income generated from all sources. The investment funds you choose to invest in for your Pension will not pay tax in Jersey on the income and capital gains.
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We have based this information on our understanding of the current tax legislation relating to Jersey retirement schemes. Future changes in the law and tax practices or changes in your own personal circumstances may affect your tax obligation. bridport & co. (Jersey) Ltd are not tax advisers and independent tax advice should be sought if required. Can I transfer my Pension? You can transfer your Pension at any time. How will I know how my Pension is doing? The trustee will provide you or your adviser with a statement every year showing the current value of your Pension, the current contribution level and your account’s progress in line with your own retirement target.
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Investment Strategy bridport & co. (Jersey) Ltd (“bridport”) act as investment manager to The Optimised Fund (the “Fund”). This means that bridport & co will be responsible for taking decisions as to how the fund’s assets are allocated, changing the make-up as the market’s circumstances change. Why is our approach different to other investment managers? In order to determine the manner in which the Pension will be managed, your financial adviser requires certain basic information to be provided on a regular basis: 1. 2. 3. 4.
The investors intended retirement date; The amount of income required at that retirement date; The present pension value; and The amount of money presently being saved.
Changes in any of these factors will affect the rate at which the savings need to grow to meet the pensioner’s ultimate retirement goals. It should be borne in mind that any of these factors can change at any time, and hence the manner in which the investments are invested should also change to reflect these changing circumstances. The regular changes made as a result of the constant review of the investor’s, and the markets’, circumstances is what makes us different to other investment managers. Risk and Return As with many things in life, there is a risk associated with most actions. In investment terms, the greater the return one is seeking to achieve, the greater the risk one must take to achieve it.
Required Rate of Return
Required Level of Risk Managing the Level of Risk taken Because the investor’s own circumstances change over time, so does the level of risk that should be taken with their savings to achieve their retirement goals.
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The following changes will reduce the level of risk, and consequently the level of return, required: 1. 2. 3. 4.
Extending your retirement date; Saving more; Accepting a lower retirement income; and The performance of the Pension being above expectations.
The following changes will increase the level of risk, and consequently the level of return, required: 1. 2. 3. 4.
Shortening your retirement date; Saving less; Requiring a higher retirement income; and The performance of the Pension being below expectations.
Changes in the required annual rate of return will result in changes to the level of risk which is required to meet that return. As can be seen therefore, most of the factors which determine the return the investor needs to achieve are actually in their own hands. The one factor which is usually out of their control is the investment return achieved. How do bridport achieve investment returns? The range of investments available in global markets is large, and ever growing. However most investments will fall into one of the following broad categories: ¾ ¾ ¾ ¾ ¾
Cash Bonds Equities Real Estate Commodities
We refer to these as asset classes, and each will offer differing levels of return, depending on the state of a country’s (or region’s) economic conditions. Correctly choosing how much to invest in each asset class, and at what particular time, is how we achieve investment returns. How do we decide where to invest, and when? Bridport continually monitor investment returns being achieved by over 250 individual investment markets around the world, along with the levels of risk taken to generate these returns. Every month, we adjust the positions within the Fund in an attempt to hold those assets which are achieving the highest levels of return for the lowest levels of risk (details of our current investment strategy is provided on our Fund factsheets, a copy of which will be supplied to your financial adviser). How will client’s funds be invested? Bridport offer six individual Sub Funds, each with its own level of risk. The higher the return the investor requires to meet their investment goals, the higher up the fund risk scale their assets will need to be invested. It is important to stress however that it is the clients own circumstances which dictate the risk level recommended for their investment, and as these circumstances change, so will the risk level used.
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Charges What are the charges? While there is a cost in managing your Pension, these charges are allowed for within the Fund’s annual management charge. In addition to this, there will also be trustee fees and the charges applied by your financial adviser. The charges are detailed below: Annual Management Charge
- 1.5% (monthly in arrears based on the value of your Pension)
Trustees’ set up fees Trustees’ ongoing fees
- £250.00 (one-off fee) - £100.00 per annum
IFA fees
- Details of the fees payable to your financial adviser should be notified to you and agreed with you prior to making your investment(s)
This charging structure provides you with a simple, cost effective scheme, with no painful surprises should you leave the scheme before normal retirement date. Note: bridport may pay a proportion of the Annual Management Charge to your financial adviser (up to a maximum of 0.5%), details of which are available from them.
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Other Information bridport & co. (Jersey) Ltd (“bridport�) are regulated by the Jersey Financial Services Commission. The value of investments, and any income from them, may go down as well as up (which may in part be due to fluctuations in foreign exchange rates), and investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance. Bridport has compiled this document and has taken care to ensure that the information contained herein is correct, but it does not warrant, represent or guarantee the accuracy of any such information, nor does it accept any responsibility for any errors, inaccuracies, omissions or inconsistencies herein. This document should not be construed as advice or as a recommendation to buy or sell any investment. This document is designed to provide you with a summary of the key features of the The bridport Pension Trust and is not a contract or Terms of Business. Prior to making any investment in The bridport Pension Trust, you should seek the advice of your financial adviser to ensure that it is suitable for your specific needs. The Comptroller of Income Tax has issued a Practice Note in relation to Retirement Annuity Trust Schemes, a copy of which should be available from your financial adviser or from the States of Jersey website (www.gov.je). Telephone calls will be recorded for your protection and training purposes. Copies of this document and an application form can be found on the Asset Management section of our website at www.bridport.ch.
How to complain If you ever have cause to complain, please contact, in the first instance, your financial adviser or Fairway Pension Trustees Limited, 8th Floor, Union House, Union Street, St Helier, JE2 3RF.
Contact Details for bridport: bridport Investor Services 6 Bond Street St Helier JE2 3NP Email: info@bridportjersey.net Website: www.bridport.ch Telephone: 01534 887448 Fax: 01534 887805
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