Enhanced Transfer Value (ETV) Offer Documents
ETV offer - initial leaflet - August 2010
Questions & Answers
The questions and answers below relate to the Enhanced Transfer Value (ETV) offer the Company is making to applicable members of the Comet Pension Scheme (the Scheme). Offer packs with full details have now been issued to members who are no longer employed by the Company. The offer packs for members who are currently in active employment with Comet have not yet been issued.
The enhanced transfer value offer pack
1. If I receive an offer pack from Comet in the post, do I need to do anything?
You should read the contents of the pack, starting with the offer letter from the Company which is in the left hand side of the folder. If, after having read the information in the offer pack, you are interested in considering the offer further, you should contact Origen or your own financial adviser to receive financial advice (see also Q11 to Q15 for more information about financial advice)
2. I haven’t received an offer pack. Why not?
The offer packs for in service members (members in active employment with Comet) have not yet been issued.
If you are a pensioner, or you did not allow your data be released by the Trustee, you will not receive an offer pack.
If you allowed your data to be released by the Trustee but did not receive a pack, you may not have satisfied the Company’s eligibility criteria for the offer. You will be sent a letter confirming this which also outlines the criteria the Company used to determine which members would be eligible.
The remainder of these questions and answers deal with the content of the ETV offer pack and the offer itself.
3. There is a lot of information in the pack. What is what?
The contents of the offer pack can be divided into two sections; a) the offer and supporting material from Comet and b) the Commentary and supporting material from Origen.
a) From Comet:
• Your personalised offer letter from Comet – this sets out your own personal offer in full detail.
• Appendix: Statement of entitlement – this statement gives a full description of all the benefits provided to you by the Scheme.
b) From Origen:
• Commentary from Origen Financial Services – this guide provides more background on ETVs and the things that you need to consider including risks, as well as information on Origen’s role in the process. It includes a glossary of terms at the back of the booklet which explains the technical terms used throughout the Commentary.
• Decision tree – this diagram takes you through the advice and acceptance process step by step.
• Request for advice form – to be completed and returned to Origen in the envelope provided if you are interested in scheduling an appointment with them to seek advice on the offer.
• About our services and costs – provides details on all of Origen’s services and the rates they charge. Please note that all advice provided by Origen in relation to the offer will be paid for by the Company. You may, however, choose to get additional financial advice from Origen which the Company will not pay for.
• Terms of business – this document sets out Origen’s standard terms of business for engaging with individuals.
4. What if I think something is wrong in the offer pack?
Every effort has been made to ensure the contents in your offer pack are accurate. If however, you feel that there is an error in the information provided relating to your benefit entitlement, please contact the Scheme’s administrator:
XPS Administration Limited
Tempus Court
Onslow Street
Guildford, GU1 4SS
You should note that where discrepancies are concerned, the Trust Deed & Rules, which are the legal documents governing the Scheme, will always take priority over any other communication issued.
About the offer
5. If I receive an offer do I have to accept?
No, the offer is voluntary and you will need to consider your options carefully, and take financial advice, before deciding whether or not to take it.
6. Why is the Company making these offers?
This ETV offer exercise is part of an ongoing process to reduce the amount of risk associated with the Scheme. If some members take up the offer it will help reduce the Scheme’s liabilities and strengthen the security of the benefits of those members who decide to leave their pension in the Scheme.
7. Is the Trustee involved in this offer?
This offer is being made by the Company. However, it has made the Trustee fully aware of it, and will keep them informed throughout the process. Although the Trustee is responsible for paying transfer values from the Scheme, the Company is meeting the cost of the enhancement and top ups (see Question 9).
8. Will the Company repeat this offer in the future?
Whilst it is possible that the Company may repeat this offer in future, it has no plans to do so at the current time. If you receive an ETV offer and do not take it up but then decide to transfer at a future date, the transfer value available at that time is unlikely to be enhanced.
9. How does this offer differ from a normal transfer value?
Your normal transfer value is based on what you have built up in the Scheme including any additional benefits such as dependants’ benefits but it is then reduced to take into consideration the underfunding of the Scheme.
Comet is offering you the sum of three different enhancements on top of your normal transfer value; an underfunding top up, the enhancement and the further top up. These enhancements are described in more detail in the offer letter in your pack.
10. How do I understand the risks of transferring out of the Scheme?
Comet has worked with Origen to make sure that this offer and its associated risks are communicated clearly. You will find a description of the different kinds of risk involved in the Commentary document in the right hand side of the offer pack folder. However, in order to sufficiently understand the risks involved it is essential that you receive independent advice from Origen (or your chosen IFA). Unless you can produce evidence that you have taken IFA advice, the Company will not accept your application.
Taking financial advice
11. Why is the Company offering to pay Origen for me to take financial advice?
The Company wants members to be able to make an informed decision about its offer and decide what is right for them. The offer pack that will be issued in the coming weeks will provide you with a lot of information. It will not, however, cover every circumstance, nor take account of your personal situation and attitude to investment risk.
The Company is not authorised to give any financial advice itself. An independent financial adviser (IFA) can review your own situation and will help you to decide what’s best for you. In order to ensure that members receive this important independent financial advice, the Company is willing to cover the cost of providing this advice service using Origen.
12. Do I have to use Origen if I want advice?
No. You may consult another suitably qualified adviser but this will be at your own cost. You will have to provide evidence that you have taken independent financial advice if you choose to accept the offer.
13. Is Origen really independent?
Yes, Origen is a professional firm, qualified to give independent financial advice, and is authorised and regulated by the Financial Services Authority. Origen is paid a fixed fee by the Company, so does not receive commission dependent on the number of members taking up the offer. Any information you give to Origen will be kept confidential.
14. Do I have to take advice?
If you wish to accept the enhanced transfer value offer, you will need to take financial advice either from Origen or from another suitably qualified financial adviser. The Company must have evidence that you have spoken to an IFA before you can accept the offer. If you take advice and then decide not to accept the offer, that’s fine. Your benefits will then remain in the Scheme.
15. I want to talk to Origen, how do I make an appointment?
In the offer pack you received an appointment form from Origen to fill out and return if you would like to schedule a session with an adviser. Alternatively you can contact them by:
Emailing: [email protected]
Calling: +44 (0) 844 209 3928 (Monday to Friday, 9am to 6pm UK time)
Writing to: Comet Pension Transfer Offer
c/o Origen, Client Liaison, 1st Floor, Pyramid House, Solartron Road
Farnborough, Hampshire GU14 7QL
About my benefits in the Scheme
16. What happens to my benefits if I leave them in the Scheme?
Your benefits will remain in the Scheme until either you start to receive them, or you decide to transfer them out at a later date. You should note that your transfer value will be recalculated at this time, to reflect market conditions and may therefore be higher or lower than the current amount shown in your personal offer.
17. What if I have paid additional contributions (AVCs) to the Scheme?
If you decide to transfer your benefits out of the Scheme, your AVCs would also be transferred at the same time. Depending on how your AVCs are invested, this may be a factor in your decision. For example, if your AVCs are invested in a with-profits fund, you should discuss this with Origen or your own IFA as there are penalties for ending with-profits investments early.
18. Don’t I have other benefits related to the pension?
The Scheme offers you and your dependants a number of other benefits, linked to, but in addition to, your pension. These benefits include a pension for your dependants and normally a lump sum if you die. If you chose to transfer out of the Scheme you are no longer entitled to these benefits, but a value for your additional benefits has been included in the calculation of your current normal transfer value.
19. What do I get taxed on?
If you take the further top up as cash you will pay income tax and National Insurance on this amount.
Also, if you built up very large benefits in the Scheme before 6 April 2006 and arranged for them to be protected with either enhanced or primary protection, you should be aware that this could be lost by transferring your benefits to a new pension scheme. Please speak to your IFA about
how factors such as these may influence your decision.