HSBC

Rt Hon Frank Field MP Chair Work and Pensions Committee 14 Tothill Street London SW1H 9NB

12 January 2018

I refer to your letter dated 11 December 2017 concerning the state deduction feature of the post 197 4 Midland Section of the HSBC Bank (UK) Pension Scheme

This feature applies to members of the Scheme who joined the Midland Section on or after 1 January 1975 and before 1 July 1996 I have set out more detail about this feature of the Scheme in the Appendix to this letter which is a copy of the letter the Sponsor of the Scheme has sent to Members of Parliament who have enquired on behalf of a constituent about the state deduction

As you will note I am the Chair of the company that is the Trustee of the Scheme The Trustees role is to administer the Scheme and provide the benefits due to Scheme members and their dependents in accordance with the terms of the Scheme as set out in the Trust Deed and Rules

Considering that background I deal with your specific questions below

1) How was the State Deduction communicated to Scheme members throughout the period of its application

From the date the post 197 4 Midland Section was introduced the details as to how the State Deduction (the SO) applies (as well as the other features of the post 1974 Section) have been communicated in a transparent manner to relevant members

I understand that the initial communication about pension benefits to a new employee was carried out as part of the normal on-boarding process Following this there is a sequence of communications to a member of the Scheme throughout the period of membership culminating in the period before and after retirement

In preparing this response I have examined original documents or copies going back to 1975

We have been able to check sample communications issued from time to time over the period focussing on four key events during a members potential membership of the Scheme (i) joining the Scheme (1975-1996) (ii) leaving the Scheme (otherwise than when receiving an immediate pension) (iii) in 2009 when the SO stopped building up and (iv) when a members benefits become payable Taking each of these trigger points in turn I have reviewed sample communications and correspondence we have on file to review the communication of the SO to Scheme members I set out my conclusions below

In reviewing sample member communications I have taken into account the template-based approach to member administration which has been adopted throug hout the 43 years since 1975

HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E14 5HQ Tel 020 799 1 9882

HSBC

2

The development in information technology in th is period has faci litated greater automation however in my review of communications in the earlier years it is clear that templates have also been applied

In line with the experience of other large pension schemes the provider of scheme administration has changed over the relevant period The responsibility for scheme administration first moved in the late 1990s from an inhouse team to HSBC Actuaries and Consultants Limited a third-party adlministrator In January 2009 Towers Watson (now Willis Towers Watson WTW) was appointed the Scheme administrator

(i) On joining the post 197 4 Midland Section between 1 January 1975 and 30 June 1996 shymember guide (1978 version Append ix 2)

Although during this period the Section was non-contributory as far as members were concerned when they joined they were provided with details about the key features of the Scheme that concerned them The legislation giving rise to the legal obligation to do so altered over the period however the essence of the requirement itself has not

The legislative requirement was fulfi lled via the Scheme member guide which was first produced in January 1975 and was periodically updated to take account of changes to the Scheme either because of legislative and regulatory changes or changes to the design of the Scheme Scheme leaflets and guides were distributed to members either via Bank branches or Head Office Departments or individually on joining

I have reviewed examples of the member guides issued in 1975 1978 1983 1986 1988 1990 1991 1994 2000 (Appendix 3) 2009 and 2017 In all these publications the SO is defined clearly it is illustrated in some with sample calculations and it is referenced where appropriate in describing the benefits provided by the Scheme

(ii) When a member leaves the Scheme - leaver statement

From January 1975 to 1 November 1986 there was no specific obligation to notify members of what their benefits were With effect from 1 November 1986 the Trustee has been required to provide to Members whose pensionable service has terminated information regarding their rights and options under the Scheme

I have reviewed a sample letter dated 16 February 1987 to a leaver (effective date 31 1286) who qualified for a deferred pension and this clearly sets out the amount of SO I have also reviewed an update letter sent 20 years later to the same member (2 July 2007) which sets out the date on which the SO comes into effect and the amount by which the members pension will be reduced on reaching State Pension Age as well as the amount of the SO accrued as at the date of the pension statement

I have reviewed a sample of other letters as follows

WTW template for a leaver with DB benefits dated 201 O WTW template for a leaver taking early retirement dated 2016 Letter for early retirement under redundancy dated 2017 Letter for a hybrid leaver with a combination of DB and DC benefits dated 2017

In all letters sampled the SO is set out clearly and illustrated with an amount and a date on wh ich it wil I come into effect HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

Rbull1(11eretf tn 11g1111d 1111111her 4975 Regw~rlfil ()jfice N ( middotanala Slmre l11111ln11 HI 5H(J

HSBC

3

Members who ceased to build up defined benefit pensionable service at the end of 30 June 2015 and joined the defined contribution section of the Scheme on 1 July 2015 were provided with an individual benefit statement at this date (although there was no technical requirement to provide this information)

I have reviewed a sample benefit statement dated 30 June 2015 and the SD is clearly defined and the specific amount is quoted as a deduction from the pension payable from the Scheme at State Pension Age

(iii) At the point in time when the SO stopped building up based on future pensionable service (2009) - new member guide for active members

The SD stopped building up based on future pensionable service when member compulsory contributions were introduced from 1 July 2009 Other changes were introduced at the time Although the employers had provided a lot of detail about the impact of the SO as part of the consultation about the changes the Trustee also issued a new member guide to active members in July 2009 and the SO was clearly defined in that guide and illustrated in the calculations

(iv) When a Members benefits are about to become payable - retirement communication

I have reviewed a sample of letters issued to new pensioners as follows

Ill health retirement letter dated April 1988 Ill health retirement letter dated May 1997 Ill health retirement letter dated August 1999 Ill health retirement letter dated January 2000 Leaver letter dated May 201 O Letter for early retirement under redundancy dated 2017

In all the above cases the SD was clearly described in terms of the amount of the SO and the date on which it would come into effect

The administration process is designed to send to a Member six months before reaching retirement age an initial letter seeking confirmation whether they are looking to commence payment of their benefits and asking for ID If the member requires payment of their pension benefits a full retirement quotation is provided I have reviewed the WTW template for these retirement communications and the SO is clearly described with a personalised quotation and reference is made to the date at which it comes into effect

2) What steps were taken to ensure that all Scheme members were aware of how this feature would affect their retirement incomes

The Trustees communication requirements to individual Members are set out in my response above The SO is consistently described and illustrated in communications to Members - in generic Scheme member guides and in specific correspondence - pensions benefit statements communications when members leave the Scheme and when their pension starts

The Trustees practice is to issue annual benefit statements to all active members (although the law has not required the Trustee to do this over the relevant period for members who only have final salary pension benefits)

HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E 14 51 IQ Tel 020 7991 9882

HSBC D

4

I have reviewed the annual pension benefit statement which was issued to an active member (years 1990 1994 1998 2002 2007 2009 2014 and 2017) and each statement clearly shows for this post 197 4 Mid land Section member the amount of the SO that will be applied to the members pension at the point he attains State Pension Age (SPA) as well as the amount of SO accrued as at the date of the pension statement

Additional commun ications were provided to all active members of the Scheme at the time when benefit changes were being proposed by the Bank for example 2008 prior to the benefit changes made in July 2009 The impact of the SO was clearly shown in this commun ication Furthermore personalised statements were issued to all active members at that time and this clearly shows the SO accrued to 30 June 2009

In 2013 as part of the consultation process prior to closing the Scheme to future accrual all active members received a personalised statement which included a specific quotation for the amount of SO which wou ld be applied to the members benefit

As well as information being provided when a persons pension starts all members are written to th ree months before attaining SPA to alert them that the SO will be applied from that date with the amount of the reduction specified in the letter

In assessing whether these steps together with the fulfi lment of the Trustees disclosure responsibilities enabled all Scheme members to be aware of how this feature would affect their retirement incomes I recognise that in the 43-year period from 1975 to 2018 communication methods and expectations have changed substantially The SO is one featu re of a competitive defined benefit pension package which was non-contributory until 2009

The Trustee in a spirit of continuous improvement has a strategic focus on ensuring member understanding and engagement with their benefits and the Trustee has now moved from the provision of printed member guides to a website where member guides are available to all members and indeed any other interested person wwwfuturefocusstaffhsbccouk

3) How much money does the Scheme save from applying the State Deduction compared with if there were no such deduction

Thie post 197 4 Mid land Section is one of more than 20 different defined benefit structures provided by the Scheme In addition the Scheme has over 80000 Defined Contribution members You will appreciate that the financial dynamics within the Scheme are extremely complex The funding of the Scheme is managed to provide the level of benefits due to members under the rules of the Scheme For the post 197 4 Midland Section this means funding to provide the benefits due including the SO

Yours sincerely

I~ fZtmiddot Russell C Picot _____-shyChair of Trustee Boar~

HSBC Bank Pension T rust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

RmiddotiMered III li11glw1J 1111111hbullr -1x97-5 R[1stercJ (~(ice 8 ( 111uJ11 suure cmdm Iii 5H(J

HSBC

2

The development in information technology in th is period has faci litated greater automation however in my review of communications in the earlier years it is clear that templates have also been applied

In line with the experience of other large pension schemes the provider of scheme administration has changed over the relevant period The responsibility for scheme administration first moved in the late 1990s from an inhouse team to HSBC Actuaries and Consultants Limited a third-party adlministrator In January 2009 Towers Watson (now Willis Towers Watson WTW) was appointed the Scheme administrator

(i) On joining the post 197 4 Midland Section between 1 January 1975 and 30 June 1996 shymember guide (1978 version Append ix 2)

Although during this period the Section was non-contributory as far as members were concerned when they joined they were provided with details about the key features of the Scheme that concerned them The legislation giving rise to the legal obligation to do so altered over the period however the essence of the requirement itself has not

The legislative requirement was fulfi lled via the Scheme member guide which was first produced in January 1975 and was periodically updated to take account of changes to the Scheme either because of legislative and regulatory changes or changes to the design of the Scheme Scheme leaflets and guides were distributed to members either via Bank branches or Head Office Departments or individually on joining

I have reviewed examples of the member guides issued in 1975 1978 1983 1986 1988 1990 1991 1994 2000 (Appendix 3) 2009 and 2017 In all these publications the SO is defined clearly it is illustrated in some with sample calculations and it is referenced where appropriate in describing the benefits provided by the Scheme

(ii) When a member leaves the Scheme - leaver statement

From January 1975 to 1 November 1986 there was no specific obligation to notify members of what their benefits were With effect from 1 November 1986 the Trustee has been required to provide to Members whose pensionable service has terminated information regarding their rights and options under the Scheme

I have reviewed a sample letter dated 16 February 1987 to a leaver (effective date 31 1286) who qualified for a deferred pension and this clearly sets out the amount of SO I have also reviewed an update letter sent 20 years later to the same member (2 July 2007) which sets out the date on which the SO comes into effect and the amount by which the members pension will be reduced on reaching State Pension Age as well as the amount of the SO accrued as at the date of the pension statement

I have reviewed a sample of other letters as follows

WTW template for a leaver with DB benefits dated 201 O WTW template for a leaver taking early retirement dated 2016 Letter for early retirement under redundancy dated 2017 Letter for a hybrid leaver with a combination of DB and DC benefits dated 2017

In all letters sampled the SO is set out clearly and illustrated with an amount and a date on wh ich it wil I come into effect HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

Rbull1(11eretf tn 11g1111d 1111111her 4975 Regw~rlfil ()jfice N ( middotanala Slmre l11111ln11 HI 5H(J

HSBC

3

Members who ceased to build up defined benefit pensionable service at the end of 30 June 2015 and joined the defined contribution section of the Scheme on 1 July 2015 were provided with an individual benefit statement at this date (although there was no technical requirement to provide this information)

I have reviewed a sample benefit statement dated 30 June 2015 and the SD is clearly defined and the specific amount is quoted as a deduction from the pension payable from the Scheme at State Pension Age

(iii) At the point in time when the SO stopped building up based on future pensionable service (2009) - new member guide for active members

The SD stopped building up based on future pensionable service when member compulsory contributions were introduced from 1 July 2009 Other changes were introduced at the time Although the employers had provided a lot of detail about the impact of the SO as part of the consultation about the changes the Trustee also issued a new member guide to active members in July 2009 and the SO was clearly defined in that guide and illustrated in the calculations

(iv) When a Members benefits are about to become payable - retirement communication

I have reviewed a sample of letters issued to new pensioners as follows

Ill health retirement letter dated April 1988 Ill health retirement letter dated May 1997 Ill health retirement letter dated August 1999 Ill health retirement letter dated January 2000 Leaver letter dated May 201 O Letter for early retirement under redundancy dated 2017

In all the above cases the SD was clearly described in terms of the amount of the SO and the date on which it would come into effect

The administration process is designed to send to a Member six months before reaching retirement age an initial letter seeking confirmation whether they are looking to commence payment of their benefits and asking for ID If the member requires payment of their pension benefits a full retirement quotation is provided I have reviewed the WTW template for these retirement communications and the SO is clearly described with a personalised quotation and reference is made to the date at which it comes into effect

2) What steps were taken to ensure that all Scheme members were aware of how this feature would affect their retirement incomes

The Trustees communication requirements to individual Members are set out in my response above The SO is consistently described and illustrated in communications to Members - in generic Scheme member guides and in specific correspondence - pensions benefit statements communications when members leave the Scheme and when their pension starts

The Trustees practice is to issue annual benefit statements to all active members (although the law has not required the Trustee to do this over the relevant period for members who only have final salary pension benefits)

HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E 14 51 IQ Tel 020 7991 9882

HSBC D

4

I have reviewed the annual pension benefit statement which was issued to an active member (years 1990 1994 1998 2002 2007 2009 2014 and 2017) and each statement clearly shows for this post 197 4 Mid land Section member the amount of the SO that will be applied to the members pension at the point he attains State Pension Age (SPA) as well as the amount of SO accrued as at the date of the pension statement

Additional commun ications were provided to all active members of the Scheme at the time when benefit changes were being proposed by the Bank for example 2008 prior to the benefit changes made in July 2009 The impact of the SO was clearly shown in this commun ication Furthermore personalised statements were issued to all active members at that time and this clearly shows the SO accrued to 30 June 2009

In 2013 as part of the consultation process prior to closing the Scheme to future accrual all active members received a personalised statement which included a specific quotation for the amount of SO which wou ld be applied to the members benefit

As well as information being provided when a persons pension starts all members are written to th ree months before attaining SPA to alert them that the SO will be applied from that date with the amount of the reduction specified in the letter

In assessing whether these steps together with the fulfi lment of the Trustees disclosure responsibilities enabled all Scheme members to be aware of how this feature would affect their retirement incomes I recognise that in the 43-year period from 1975 to 2018 communication methods and expectations have changed substantially The SO is one featu re of a competitive defined benefit pension package which was non-contributory until 2009

The Trustee in a spirit of continuous improvement has a strategic focus on ensuring member understanding and engagement with their benefits and the Trustee has now moved from the provision of printed member guides to a website where member guides are available to all members and indeed any other interested person wwwfuturefocusstaffhsbccouk

3) How much money does the Scheme save from applying the State Deduction compared with if there were no such deduction

Thie post 197 4 Mid land Section is one of more than 20 different defined benefit structures provided by the Scheme In addition the Scheme has over 80000 Defined Contribution members You will appreciate that the financial dynamics within the Scheme are extremely complex The funding of the Scheme is managed to provide the level of benefits due to members under the rules of the Scheme For the post 197 4 Midland Section this means funding to provide the benefits due including the SO

Yours sincerely

I~ fZtmiddot Russell C Picot _____-shyChair of Trustee Boar~

HSBC Bank Pension T rust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

RmiddotiMered III li11glw1J 1111111hbullr -1x97-5 R[1stercJ (~(ice 8 ( 111uJ11 suure cmdm Iii 5H(J

HSBC

3

Members who ceased to build up defined benefit pensionable service at the end of 30 June 2015 and joined the defined contribution section of the Scheme on 1 July 2015 were provided with an individual benefit statement at this date (although there was no technical requirement to provide this information)

I have reviewed a sample benefit statement dated 30 June 2015 and the SD is clearly defined and the specific amount is quoted as a deduction from the pension payable from the Scheme at State Pension Age

(iii) At the point in time when the SO stopped building up based on future pensionable service (2009) - new member guide for active members

The SD stopped building up based on future pensionable service when member compulsory contributions were introduced from 1 July 2009 Other changes were introduced at the time Although the employers had provided a lot of detail about the impact of the SO as part of the consultation about the changes the Trustee also issued a new member guide to active members in July 2009 and the SO was clearly defined in that guide and illustrated in the calculations

(iv) When a Members benefits are about to become payable - retirement communication

I have reviewed a sample of letters issued to new pensioners as follows

Ill health retirement letter dated April 1988 Ill health retirement letter dated May 1997 Ill health retirement letter dated August 1999 Ill health retirement letter dated January 2000 Leaver letter dated May 201 O Letter for early retirement under redundancy dated 2017

In all the above cases the SD was clearly described in terms of the amount of the SO and the date on which it would come into effect

The administration process is designed to send to a Member six months before reaching retirement age an initial letter seeking confirmation whether they are looking to commence payment of their benefits and asking for ID If the member requires payment of their pension benefits a full retirement quotation is provided I have reviewed the WTW template for these retirement communications and the SO is clearly described with a personalised quotation and reference is made to the date at which it comes into effect

2) What steps were taken to ensure that all Scheme members were aware of how this feature would affect their retirement incomes

The Trustees communication requirements to individual Members are set out in my response above The SO is consistently described and illustrated in communications to Members - in generic Scheme member guides and in specific correspondence - pensions benefit statements communications when members leave the Scheme and when their pension starts

The Trustees practice is to issue annual benefit statements to all active members (although the law has not required the Trustee to do this over the relevant period for members who only have final salary pension benefits)

HSBC Bank Pension Trust (UK) Limited Level 33 8 Canada Square London E 14 51 IQ Tel 020 7991 9882

HSBC D

4

I have reviewed the annual pension benefit statement which was issued to an active member (years 1990 1994 1998 2002 2007 2009 2014 and 2017) and each statement clearly shows for this post 197 4 Mid land Section member the amount of the SO that will be applied to the members pension at the point he attains State Pension Age (SPA) as well as the amount of SO accrued as at the date of the pension statement

Additional commun ications were provided to all active members of the Scheme at the time when benefit changes were being proposed by the Bank for example 2008 prior to the benefit changes made in July 2009 The impact of the SO was clearly shown in this commun ication Furthermore personalised statements were issued to all active members at that time and this clearly shows the SO accrued to 30 June 2009

In 2013 as part of the consultation process prior to closing the Scheme to future accrual all active members received a personalised statement which included a specific quotation for the amount of SO which wou ld be applied to the members benefit

As well as information being provided when a persons pension starts all members are written to th ree months before attaining SPA to alert them that the SO will be applied from that date with the amount of the reduction specified in the letter

In assessing whether these steps together with the fulfi lment of the Trustees disclosure responsibilities enabled all Scheme members to be aware of how this feature would affect their retirement incomes I recognise that in the 43-year period from 1975 to 2018 communication methods and expectations have changed substantially The SO is one featu re of a competitive defined benefit pension package which was non-contributory until 2009

The Trustee in a spirit of continuous improvement has a strategic focus on ensuring member understanding and engagement with their benefits and the Trustee has now moved from the provision of printed member guides to a website where member guides are available to all members and indeed any other interested person wwwfuturefocusstaffhsbccouk

3) How much money does the Scheme save from applying the State Deduction compared with if there were no such deduction

Thie post 197 4 Mid land Section is one of more than 20 different defined benefit structures provided by the Scheme In addition the Scheme has over 80000 Defined Contribution members You will appreciate that the financial dynamics within the Scheme are extremely complex The funding of the Scheme is managed to provide the level of benefits due to members under the rules of the Scheme For the post 197 4 Midland Section this means funding to provide the benefits due including the SO

Yours sincerely

I~ fZtmiddot Russell C Picot _____-shyChair of Trustee Boar~

HSBC Bank Pension T rust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

RmiddotiMered III li11glw1J 1111111hbullr -1x97-5 R[1stercJ (~(ice 8 ( 111uJ11 suure cmdm Iii 5H(J

HSBC D

4

I have reviewed the annual pension benefit statement which was issued to an active member (years 1990 1994 1998 2002 2007 2009 2014 and 2017) and each statement clearly shows for this post 197 4 Mid land Section member the amount of the SO that will be applied to the members pension at the point he attains State Pension Age (SPA) as well as the amount of SO accrued as at the date of the pension statement

Additional commun ications were provided to all active members of the Scheme at the time when benefit changes were being proposed by the Bank for example 2008 prior to the benefit changes made in July 2009 The impact of the SO was clearly shown in this commun ication Furthermore personalised statements were issued to all active members at that time and this clearly shows the SO accrued to 30 June 2009

In 2013 as part of the consultation process prior to closing the Scheme to future accrual all active members received a personalised statement which included a specific quotation for the amount of SO which wou ld be applied to the members benefit

As well as information being provided when a persons pension starts all members are written to th ree months before attaining SPA to alert them that the SO will be applied from that date with the amount of the reduction specified in the letter

In assessing whether these steps together with the fulfi lment of the Trustees disclosure responsibilities enabled all Scheme members to be aware of how this feature would affect their retirement incomes I recognise that in the 43-year period from 1975 to 2018 communication methods and expectations have changed substantially The SO is one featu re of a competitive defined benefit pension package which was non-contributory until 2009

The Trustee in a spirit of continuous improvement has a strategic focus on ensuring member understanding and engagement with their benefits and the Trustee has now moved from the provision of printed member guides to a website where member guides are available to all members and indeed any other interested person wwwfuturefocusstaffhsbccouk

3) How much money does the Scheme save from applying the State Deduction compared with if there were no such deduction

Thie post 197 4 Mid land Section is one of more than 20 different defined benefit structures provided by the Scheme In addition the Scheme has over 80000 Defined Contribution members You will appreciate that the financial dynamics within the Scheme are extremely complex The funding of the Scheme is managed to provide the level of benefits due to members under the rules of the Scheme For the post 197 4 Midland Section this means funding to provide the benefits due including the SO

Yours sincerely

I~ fZtmiddot Russell C Picot _____-shyChair of Trustee Boar~

HSBC Bank Pension T rust (UK) Limited Level 33 8 Canada Square London E 14 5HQ Tel 020 799 1 9882

RmiddotiMered III li11glw1J 1111111hbullr -1x97-5 R[1stercJ (~(ice 8 ( 111uJ11 suure cmdm Iii 5H(J

HSBC Appendix I

PRIVATE amp CONFIDENTIAL

laquoNameraquo laquoConstituencyraquo laquoLine_ 1 raquo laquoLine_2raquo laquoLine_3raquo laquoPostcoderaquo

13 December 2017

Dear laquoTitleraquo laquoSurnameraquo

Thank you for your letter dated laquoLetter_Dateraquo regarding laquoOne_or_someraquo of your constituents who laquoHas_or_Haveraquo raised questions about the State Deduction (SO) that applies to a cohort of members of the former Midland Pension Scheme I am responding in my capacity as Chief Executive of HSBC UK

We take the welfare of our current and former employees very seriously and have undertaken an in -depth investigation into the issues raised I thought it would be helpful to provide some background to and explanation of the deduction in response to your laquoConstituentsraquo concerns

Background to the State Deduction (SO)

To help provide employees with sufficient income in their retirement the Bank offers an occupational pension scheme currently known as the HSBC Bank (UK) Pension Scheme (the Scheme) In addition to the pension benefits members accrue in the Scheme members also receive a State pension benefit when they reach State Pension Age

HSBC has pension obligations to a wide group of current and former employees and their dependants and members of the Scheme are split across approximately 22 different benefit categories Members of the Midland section were part of Midland Banks non-contributory pension scheme and have a State Deduction applied to their pension benefits from State Pension Age if they joined the Scheme after 31 December 1974

To understand the existence of the SO it is important to consider the design history of defined benefit (DB) pension schemes When final salary schemes became popular in the 1960s many schemes in the private sector incorporated a deduction to allow for the Basic State Pension (BSP) a procedure known as integration Integration is a way of designing a defined benefit scheme to take account of pension benefits being paid by the State

The aim of integration was to provide a pension scheme which when State benefits were included ensured that members received an overall pension of two-thirds of final salary on retirement (provided they worked for the company for 40 years)

In the case of the Midland scheme this was a deduction of a proportion (180) of the single persons BSP for each years service from State Pension Age when the BSP comes into payment As members reached State Pension Age they would receive the BSP in addition so that the Schemes overall target level of income (relative to service) was broadly maintained

HSBC The SO for the Midland section is calculated as follows

th 180 x Basic State Pension (at date of leaving) x pensionable service up to 30 June 2009

For context the Midland section benefit that the above is deducted from is broadly calculated as follows

th 160 x Pensionable Salary x pensionable service up to 30 June 2015

Midland Section members were provided their pension benefits through a generous final salary (DB) pension scheme Up to 30 June 2009 the Scheme was non-contributory so members did not contribute to the cost of their pension From 1 July 2009 HSBC introduced member contributions but the build up of service to count to the SO calculation ceased from 30 June 2009 when members contributions were introduced Since the Scheme closed to future accrual in 30 June 2015 the deduction is now fixed meaning that the offset is getting smaller relative to the increase in the annual state pension

Willis Towers Watson a leading pensions consultancy undertook an independent benchmarking exercise in 03 2017 to provide an overview of the market practice in relation to defined benefit schemes design and the integration with the Basic State Pension They reported the following

bull A significant number of the pension schemes on which they advise have a State Pension offset or other similar benefit feature

bull Willis Towers Watson have identified no schemes where a State Pension offset has been removed retrospectively on the grounds of it being considered unfair or inappropriate

bull In general changes that have been made to schemes State Pension offsets have been done either to avoid a cost increase for the employer or as part of a broader re-design of the pension arrangements For example despite increases in State Pension Age some schemes have continued to apply the offset from the previous younger age

Following the Governments decision to increase the State Pension Age for both males and females the Scheme Rules were amended so that the SO would be applied to members revised State Pension Ages (as opposed to the earlier age of 60 or 65) The Bank accepted the increase in cost associated with the delay in applying the SO and has not amended the SO to relate to the new higher State Pension introduced by the Government even though this would have effectively reduced the Banks costs

HSBC The State Deduction feature has been clearly and consistently communicated to members in the Scheme member guide on members annual pension statements and the deferred statements that members receive on ceasing active membership

The provision within the Scheme rules applies to all members who joined the Midland section of the Scheme after 31 December 197 4 regardless of their gender or salary level For part time members their pensionable service is adjusted to a full time equivalent and a similar adjustment is applied to the SD

Forms of state pension offset are a common feature of very many defined benefit schemes and as such there is nothing unusual or excessive about the Midland Bank provisions Moreover we dispute the accuracy of the asserted impact of the deduction on Scheme members The table below shows that there is a broad range of possible deductions

State Pension Deduction (pound pa) at date of retirement Length of Using BSP Using BSP Using BSP

pensionable service assuming member assuming member assuming member (FTE) used for SO left pension left pension left pension

calculation scheme in 2005 scheme in 2010 scheme in 2015 10 years 521 623 740 20 years 1043 1246 1480 30 years 1564 1869 2219

FTE = fu ll time equivalent

For example a member with 20 years pensionable service who left the pension scheme in 201 0 would have a state deduction of around pound1 250 per annum and a member with 10 years pensionable service who left the pension scheme in 2005 would have a state deduction of around pound520 per annum

While we regret that this feature of the Scheme has caused concern among its members we do not therefore accept that the deduction is unfair or discriminatory or the allegation that its features have not been clearly communicated We intend to provide further communications on this subject to members in the near future

I would be happy to answer any further questions you may have

Yours sincerely

Ian Stuart Chief Executive of HSBC UK

------------ --- -

Appendix 2

PENSION SCHEME

Em ployees entering service on or after 1st J anuary 1975

Midlandbull-~middotmiddotmiddotmiddotmiddotbullbull bull Bankbullbullbullbullbullbullbullbullbullbull limited

Append ix 2

)

Midland Bank Limited Pension Scheme

This lerftt1 summarsts the bcnefos provided by the schcbullme I-o r and 1n respPct nf mPmhrlt who la~r entered the ~orvice of a panicipaung company on obull

afrtr 1st Jinu ary 1075 A copy of the tust d ocd und rules is avll ila lJlt u11 dmicromicrolltat1011 tu bra ctgt 01

1cpartMfmtal managers

The scheme Is conrracted-ou t under 1t1e Soc1il

iecurnv fens1ons Ac t 19

The Trustecl or 11e scneme is M idla110 Bank P11111011

I rust L1m1ted

A test ol tno comparues partc1pa1in9 in the scheme a nd a note oi tht efecl oi contractng-out appear

at the end of this leafle1

June 1978 VPS 78-1

HSBC The SO for the Midland section is calculated as follows

th 180 x Basic State Pension (at date of leaving) x pensionable service up to 30 June 2009

For context the Midland section benefit that the above is deducted from is broadly calculated as follows

th 160 x Pensionable Salary x pensionable service up to 30 June 2015

Midland Section members were provided their pension benefits through a generous final salary (DB) pension scheme Up to 30 June 2009 the Scheme was non-contributory so members did not contribute to the cost of their pension From 1 July 2009 HSBC introduced member contributions but the build up of service to count to the SO calculation ceased from 30 June 2009 when members contributions were introduced Since the Scheme closed to future accrual in 30 June 2015 the deduction is now fixed meaning that the offset is getting smaller relative to the increase in the annual state pension

Willis Towers Watson a leading pensions consultancy undertook an independent benchmarking exercise in 03 2017 to provide an overview of the market practice in relation to defined benefit schemes design and the integration with the Basic State Pension They reported the following

bull A significant number of the pension schemes on which they advise have a State Pension offset or other similar benefit feature

bull Willis Towers Watson have identified no schemes where a State Pension offset has been removed retrospectively on the grounds of it being considered unfair or inappropriate

bull In general changes that have been made to schemes State Pension offsets have been done either to avoid a cost increase for the employer or as part of a broader re-design of the pension arrangements For example despite increases in State Pension Age some schemes have continued to apply the offset from the previous younger age

Following the Governments decision to increase the State Pension Age for both males and females the Scheme Rules were amended so that the SO would be applied to members revised State Pension Ages (as opposed to the earlier age of 60 or 65) The Bank accepted the increase in cost associated with the delay in applying the SO and has not amended the SO to relate to the new higher State Pension introduced by the Government even though this would have effectively reduced the Banks costs

HSBC The State Deduction feature has been clearly and consistently communicated to members in the Scheme member guide on members annual pension statements and the deferred statements that members receive on ceasing active membership

The provision within the Scheme rules applies to all members who joined the Midland section of the Scheme after 31 December 197 4 regardless of their gender or salary level For part time members their pensionable service is adjusted to a full time equivalent and a similar adjustment is applied to the SD

Forms of state pension offset are a common feature of very many defined benefit schemes and as such there is nothing unusual or excessive about the Midland Bank provisions Moreover we dispute the accuracy of the asserted impact of the deduction on Scheme members The table below shows that there is a broad range of possible deductions

State Pension Deduction (pound pa) at date of retirement Length of Using BSP Using BSP Using BSP

pensionable service assuming member assuming member assuming member (FTE) used for SO left pension left pension left pension

calculation scheme in 2005 scheme in 2010 scheme in 2015 10 years 521 623 740 20 years 1043 1246 1480 30 years 1564 1869 2219

FTE = fu ll time equivalent

For example a member with 20 years pensionable service who left the pension scheme in 201 0 would have a state deduction of around pound1 250 per annum and a member with 10 years pensionable service who left the pension scheme in 2005 would have a state deduction of around pound520 per annum

While we regret that this feature of the Scheme has caused concern among its members we do not therefore accept that the deduction is unfair or discriminatory or the allegation that its features have not been clearly communicated We intend to provide further communications on this subject to members in the near future

I would be happy to answer any further questions you may have

Yours sincerely

Ian Stuart Chief Executive of HSBC UK

------------ --- -

Appendix 2

PENSION SCHEME

Em ployees entering service on or after 1st J anuary 1975

Midlandbull-~middotmiddotmiddotmiddotmiddotbullbull bull Bankbullbullbullbullbullbullbullbullbullbull limited

Append ix 2

)

Midland Bank Limited Pension Scheme

This lerftt1 summarsts the bcnefos provided by the schcbullme I-o r and 1n respPct nf mPmhrlt who la~r entered the ~orvice of a panicipaung company on obull

afrtr 1st Jinu ary 1075 A copy of the tust d ocd und rules is avll ila lJlt u11 dmicromicrolltat1011 tu bra ctgt 01

1cpartMfmtal managers

The scheme Is conrracted-ou t under 1t1e Soc1il

iecurnv fens1ons Ac t 19

The Trustecl or 11e scneme is M idla110 Bank P11111011

I rust L1m1ted

A test ol tno comparues partc1pa1in9 in the scheme a nd a note oi tht efecl oi contractng-out appear

at the end of this leafle1

June 1978 VPS 78-1

HSBC The State Deduction feature has been clearly and consistently communicated to members in the Scheme member guide on members annual pension statements and the deferred statements that members receive on ceasing active membership

The provision within the Scheme rules applies to all members who joined the Midland section of the Scheme after 31 December 197 4 regardless of their gender or salary level For part time members their pensionable service is adjusted to a full time equivalent and a similar adjustment is applied to the SD

Forms of state pension offset are a common feature of very many defined benefit schemes and as such there is nothing unusual or excessive about the Midland Bank provisions Moreover we dispute the accuracy of the asserted impact of the deduction on Scheme members The table below shows that there is a broad range of possible deductions

State Pension Deduction (pound pa) at date of retirement Length of Using BSP Using BSP Using BSP

pensionable service assuming member assuming member assuming member (FTE) used for SO left pension left pension left pension

calculation scheme in 2005 scheme in 2010 scheme in 2015 10 years 521 623 740 20 years 1043 1246 1480 30 years 1564 1869 2219

FTE = fu ll time equivalent

For example a member with 20 years pensionable service who left the pension scheme in 201 0 would have a state deduction of around pound1 250 per annum and a member with 10 years pensionable service who left the pension scheme in 2005 would have a state deduction of around pound520 per annum

While we regret that this feature of the Scheme has caused concern among its members we do not therefore accept that the deduction is unfair or discriminatory or the allegation that its features have not been clearly communicated We intend to provide further communications on this subject to members in the near future

I would be happy to answer any further questions you may have

Yours sincerely

Ian Stuart Chief Executive of HSBC UK

------------ --- -

Appendix 2

PENSION SCHEME

Em ployees entering service on or after 1st J anuary 1975

Midlandbull-~middotmiddotmiddotmiddotmiddotbullbull bull Bankbullbullbullbullbullbullbullbullbullbull limited

Append ix 2

)

Midland Bank Limited Pension Scheme

This lerftt1 summarsts the bcnefos provided by the schcbullme I-o r and 1n respPct nf mPmhrlt who la~r entered the ~orvice of a panicipaung company on obull

afrtr 1st Jinu ary 1075 A copy of the tust d ocd und rules is avll ila lJlt u11 dmicromicrolltat1011 tu bra ctgt 01

1cpartMfmtal managers

The scheme Is conrracted-ou t under 1t1e Soc1il

iecurnv fens1ons Ac t 19

The Trustecl or 11e scneme is M idla110 Bank P11111011

I rust L1m1ted

A test ol tno comparues partc1pa1in9 in the scheme a nd a note oi tht efecl oi contractng-out appear

at the end of this leafle1

June 1978 VPS 78-1

------------ --- -

Appendix 2

PENSION SCHEME

Em ployees entering service on or after 1st J anuary 1975

Midlandbull-~middotmiddotmiddotmiddotmiddotbullbull bull Bankbullbullbullbullbullbullbullbullbullbull limited

Append ix 2

)

Midland Bank Limited Pension Scheme

This lerftt1 summarsts the bcnefos provided by the schcbullme I-o r and 1n respPct nf mPmhrlt who la~r entered the ~orvice of a panicipaung company on obull

afrtr 1st Jinu ary 1075 A copy of the tust d ocd und rules is avll ila lJlt u11 dmicromicrolltat1011 tu bra ctgt 01

1cpartMfmtal managers

The scheme Is conrracted-ou t under 1t1e Soc1il

iecurnv fens1ons Ac t 19

The Trustecl or 11e scneme is M idla110 Bank P11111011

I rust L1m1ted

A test ol tno comparues partc1pa1in9 in the scheme a nd a note oi tht efecl oi contractng-out appear

at the end of this leafle1

June 1978 VPS 78-1

Append ix 2

)

Midland Bank Limited Pension Scheme

This lerftt1 summarsts the bcnefos provided by the schcbullme I-o r and 1n respPct nf mPmhrlt who la~r entered the ~orvice of a panicipaung company on obull

afrtr 1st Jinu ary 1075 A copy of the tust d ocd und rules is avll ila lJlt u11 dmicromicrolltat1011 tu bra ctgt 01

1cpartMfmtal managers

The scheme Is conrracted-ou t under 1t1e Soc1il

iecurnv fens1ons Ac t 19

The Trustecl or 11e scneme is M idla110 Bank P11111011

I rust L1m1ted

A test ol tno comparues partc1pa1in9 in the scheme a nd a note oi tht efecl oi contractng-out appear

at the end of this leafle1

June 1978 VPS 78-1

Appendix 2

M ernbersh p

Mcmberhio bcgn on Ent11ng bullrhoh-11mc employmcr-t wth a parncpating comoany MEMOERS ARE NOT REQIJIREO TO CONTRIBUTE TO THE SCHEME

Normal retirement age

NormiI rct1rcm1nt aprbull middot~ Rt for mtlt and 60 for female mcr1bebulls A rnerr-cr my reure earlier on account ol 1ncaPClt rrovfn to me sat1sfact1on or the Ban or may be requ1rBd tu retre w ithin 10 years before normal reweme11t t1ye

Retir ement pension

The Qualit1canon for re111c111111 pension 1 5 yoau ponsionahle service The rcti rment pension s 1 160th of f1nil silltJry for each yar (mexmum 4060ths) of rirnsionable scvce less a deduction irom normal ret irem~nt age equal to 180th of the basic componPnt of a smql e personmiddots state penson for each year of such service

Pens10ncble servite is whole-time employment hy a partrc1pmnn co111pany

Final salirv does not include overtime pay o r allowances

Calculauons ol rernemeitl micronsons arc basod on compltPci months of micro1msion11ble crvce 11 retiremPni 1s due to incapactty microens1onoblc crvice includolti thn pPriod between retuemenl and normal rtarnment age bur this period 1s not tilken into acount in calcu la11ng the deduction in rPspect of state ponsiur

The basic component oi the Stille pension taken rnto acl011111 tor calculatrng the d educuon from normal retirPment age ts that microdill in the 52 wcgtks before retirPmPnt

Deferred pension

A member who lfaves service having complcteo 5 yearsmiddot piinsionable service anltI attained age 26 w11houl becoming entitled to a rt1t1rement pen sion 1s cnt1tled 10 lt1 cfofuned pension beginning at normal riureniem dI-- The amount 1s Cdlculned as tor re tirement at 11ormal retircnvnt 31)8 excfpt thit tne d~uucton in respect oi state micro9nsion 1s related to the basic component paid 1n tlrn 57 weellts before the membebull left service

A member enti11ed 10 a delerr~d penson fltdY d~pl to rnc TruS1ee for eaher commencemt111 1n lhs event 1he amo111t at th~ pension will oe educed

Appendix 2

Oeltth in pensionable service

The beqelt u11 uceollbull in 1middotmiddotmiddot b1c crvct 1s a um ~ciual to 3 time fi nit sil1ry Isa tllf mmbor is malgt ha cnrnrIPl~rl S years peninniblP Prvice md leav~ a Wdow who vmiddotri~ crdinaniy resident w11h tum when he died she wI1 bB ent1tied 10 a pension If tre membt-r 1 female has cornpleo 5 year penswnable service nd leaves a wtdower wuh vnom st1c bullvJs ordinar ily restdent whr11 1~ JirJ he w1li f h e Cltgt1) si t1sfy the Trustee hat he wns ond might hivo bjon olaquopampCted 10 rarnam ~ubr11111illy deoendent on her middotor thr Mri1nwy r~cessrrmiddots of 1i be entitled to a ocns1on

The amount 01 trio wtdowmiddots or widowers penston I 111 nbull half that of 1I1c pension wl11d1 t lu 11nniue would hav1 received 1i he had retired on eccour1 of 1ncap~c1ty and there wore no dodu t1on tn respeC1 of the bi~ir rnmpnnigtnt of hEJ state rimsion Such amount w ill be reduced t me widow or w dovver 1s 15 or more vears Ounger 1han the marnbcr by 1 40th ( maxirnurn 2040ths) for each complete ytar ol ihl d dferencc in ages in excess of 1 5 years Tnc pension will normally le r~du11J by one hal f on remarrilg

If rhe member has completed 5 yearsmiddot pens1onaui serv1cE ano leaves qualifying children a childrenmiddots allowancl will be microml The amount will depend on the number ol qual1lyIng cl11ldren (1e oepnndcr1 children under age 18 o r in lull-umu udut011111 and u11dtI dlJ6 21) fo r the time being in existence Older chi ldren may it the Tructeeamp discretion q ualify

The allowance will be the following percentage of a w1aowmiddots 01 widowers pension calculated as above ignoring any reduction tor d1ft1rence in ages)middotshy

Nt1mber o i qualilyng ch ildren Percemaqc

1 40 2 60 3 80 4 or more 1UU

Tlit allowance w ill be doubied during such time oJ no w1dos o r widowe(s ponsion or adu lt dupmdrnts itlownnltP s pilalJle

Death of pensioner

II a pensioner dif)s within 5 year ZJtcr his pension began there will be a benefit equal to [he exce~ of 3 tirrn~ l1nlt1I s11 l11 y ovtr tl w instalnwnt of pension piid (or which would have been paid if no pHt of the pension had bigtn rbullihilngPd for a lump sum) nrt my o ttieir payments made on he unaerstanding that they are to bo taken Inro account for this purposll Th benefit 1rJJII be limited lo t he total of the furtner paymurm of pension (exclusive of prospective increases) which would liavt been paid if the microc11s1uneI lad l1v1o for 5 yeirs atcr it bcgm

Appendix 2

r t r ( -nmiddot~ ~41 middot0 bull lr middot-t ~ 1 bullbull rd 1h fr lnnr J 1q1r_n1rmiddott Jrf a11s1-o $Ul li ~no1se w II blbull bullJlilllbull d to I i1middot11~ rn The rcauwmermiddotts 1r1 111 the CiJSC Ol a male microensorier tliJt h bulllt wbulldow wis h15 middot11lt and ordinnr ly rbull5den1 v1th n111 at 1middot1 OJC o f n1 dtath anlt tlt tJsc o a leriia p~n-1oncr t11 he v lS hci lvsbilrd Drgtd 0 1d nmiddotlmiddotr r~d-nt middotv1t l1 her JI ho da1 of htr drmiddotith illd n hi wa- lt 1h11 oatc and mght r1vr btgtgtn expected to riimiin dtmiddotwindent ltn fHr for tho middot-d Jrv rict-sraquomes cf Jmiddotfe

Tn incu r oi t 1e oE-nsm w 11I b on half ot ie oensonr Utr 1(1r as 11 would h3V b~- f 1

1 tnere wert 110 deduct 10 111 -middot bull 11r bull 1111middot11nt of the srarn penson Such

I ~ r - t r~rJuc rf t 11e widow o r widower middot~ 15 or Qc yars younge tlgtltln 1h1 mmhe1 b- 1 40th (n- r um rt 4(ilo~) for ei1h r omt11U bullir of middotno d bullfhre~cr n Jgc n JltltP o 1 5 yrir

I 1 bull r ~ umiddot oaves qualifv1nbull1 choldr-Ji in allowanco tlw 1111mmt nf whrh will h- r r-1l 111)0 1r rhc same --iY i on d1ath n p 1ms1onablc serbullicE v1111 gtc pad

Death o f deferred pensioner (ie a f o rmer memb er enti t led t o a pension which has not begun)

If uckrrcd pcn1on11 d1 l tivng ~uv1vin9 spous and tt rnqu uomo rns 1c1od 1n rnla11on to ponsonors aro saus lwd Jnd ilcn thfl m~rriiQP inrl nrcl111 1rv rP-irl-nr~ l ook n lHP (ml in

1hc case of a emalf deferred pensioner the husbands depindence on he began) bltlo1e ce~lgtdllOn or pcr~ionable scrv1c~ ind continued u1 I ii deHh such )gtpouse w ill tu en11tlcd 10 a ricnsion

II ii ct lrrrcd pensioner 11avbulls qual ying cnildren 1n luino or middot e-pected middot at the da1e when n( celt1sed 10 be in pEns1onaole service 1n allowance will be na1d

The amount o f the sun1vnq spousemiddots p1ns1on will blt calculated n~ for o oens1onr egtcep t bull111 rt vv11 bP h1d on he ddeucd pbullJnsroncs proepec11vi ncnsbullltgt1 The 1mou n of thebull chlcrermiddots illlowrnc w rll tc c11iulated rn the sarI wnv as for a p~nsroner

Adult d~pendant middots pension

II a nwniber pensioner O ciPfrrd Dfrl5roncr dies at lcivina 1 lt1uJly1T~o dow iln alowrJnN r1y 11 the Truseemiddots shywscret1on -be grant=d to an 1d11 dependant

Appendix 2

r t r ( -nmiddot~ ~41 middot0 bull lr middot-t ~ 1 bullbull rd 1h fr lnnr J 1q1r_n1rmiddott Jrf a11s1-o $Ul li ~no1se w II blbull bullJlilllbull d to I i1middot11~ rn The rcauwmermiddotts 1r1 111 the CiJSC Ol a male microensorier tliJt h bulllt wbulldow wis h15 middot11lt and ordinnr ly rbull5den1 v1th n111 at 1middot1 OJC o f n1 dtath anlt tlt tJsc o a leriia p~n-1oncr t11 he v lS hci lvsbilrd Drgtd 0 1d nmiddotlmiddotr r~d-nt middotv1t l1 her JI ho da1 of htr drmiddotith illd n hi wa- lt 1h11 oatc and mght r1vr btgtgtn expected to riimiin dtmiddotwindent ltn fHr for tho middot-d Jrv rict-sraquomes cf Jmiddotfe

Tn incu r oi t 1e oE-nsm w 11I b on half ot ie oensonr Utr 1(1r as 11 would h3V b~- f 1

1 tnere wert 110 deduct 10 111 -middot bull 11r bull 1111middot11nt of the srarn penson Such

I ~ r - t r~rJuc rf t 11e widow o r widower middot~ 15 or Qc yars younge tlgtltln 1h1 mmhe1 b- 1 40th (n- r um rt 4(ilo~) for ei1h r omt11U bullir of middotno d bullfhre~cr n Jgc n JltltP o 1 5 yrir

I 1 bull r ~ umiddot oaves qualifv1nbull1 choldr-Ji in allowanco tlw 1111mmt nf whrh will h- r r-1l 111)0 1r rhc same --iY i on d1ath n p 1ms1onablc serbullicE v1111 gtc pad

Death o f deferred pensioner (ie a f o rmer memb er enti t led t o a pension which has not begun)

If uckrrcd pcn1on11 d1 l tivng ~uv1vin9 spous and tt rnqu uomo rns 1c1od 1n rnla11on to ponsonors aro saus lwd Jnd ilcn thfl m~rriiQP inrl nrcl111 1rv rP-irl-nr~ l ook n lHP (ml in

1hc case of a emalf deferred pensioner the husbands depindence on he began) bltlo1e ce~lgtdllOn or pcr~ionable scrv1c~ ind continued u1 I ii deHh such )gtpouse w ill tu en11tlcd 10 a ricnsion

II ii ct lrrrcd pensioner 11avbulls qual ying cnildren 1n luino or middot e-pected middot at the da1e when n( celt1sed 10 be in pEns1onaole service 1n allowance will be na1d

The amount o f the sun1vnq spousemiddots p1ns1on will blt calculated n~ for o oens1onr egtcep t bull111 rt vv11 bP h1d on he ddeucd pbullJnsroncs proepec11vi ncnsbullltgt1 The 1mou n of thebull chlcrermiddots illlowrnc w rll tc c11iulated rn the sarI wnv as for a p~nsroner

Adult d~pendant middots pension

II a nwniber pensioner O ciPfrrd Dfrl5roncr dies at lcivina 1 lt1uJly1T~o dow iln alowrJnN r1y 11 the Truseemiddots shywscret1on -be grant=d to an 1d11 dependant

Appendix 1

Fxchange o f 1enson for lump sum

A rn1111b1r w 11 be 1 lowcc when Is pens inn heQil- 1 cxchngo part of It for a hbullmn sum The m1x1mum amount li 1h~ lump sum depend~ on the lcnoth of the members 1tPrgts1onshywl I 1qmiddot 11middot0 I ttier CIICUmstinces It 1innot CXC-N 1 11111t1 11 1111i salary Themiddot pension cannot 1gt11 educed helm- cJ c c 1tJ Ir -nInImum

Deat h benefits

Bcnofns arising 0n de~th (other 1na1 1 bull 11bull Jlllt bull1d I 1ldre11middot~ llnwinrcs are oa1d 10 or appli(d for tnbull I middot~middot bull bull lepcnaants 1i rl r11-d n the ~creme rules) th selcc ton bt-1n9 m1dc tw tribullJ -rwt11 or paid to the estate 0 1 the dc1d~ed

1 rans fer values

yi- crtilmt con rPceive tr11ser val11rs and in 3pprop11arn un i nces ~ay rrinsfrr values 1n respect of former 111e~1bcrs

The p amprticip ating companiPc

Midland Ban- Limited

Mid land Bank Trust Compnny Limned Fnrward Trust Limited

M1dliriri R11nk Fi nance Coroorauon L1rn11tJd

M1dlond Montagu Lcason9 I imtted M idland Bank Tru1 Corporation (lll~fY) L1m11ecl Mrdlancl 6wk T urt Corporation (Guornscy) l1m1tltli

Midland Bank T rust Coq10 1lt11ion (Isle of Ma111 Lm11ec

Note on contracting-ou t

The new s tattbull p1bullninn ocheme cnmo 1ntQ operation in April 1 q1s It provides a re111emcnt p1ms1on cons1s11ng of a basic comrontm c and an adu11ionJI larnIngs rerateo componc11t Tht Midland Bani Limited Pension S1h u1 _ prcvdlgt pcn~bullons n excess of t he 11ddir1ori1I component and c accordin~ly cu1bullt1Jcted-out of the cirn1rys rtlc11cd pan of the Sl3tP scheme Thtbull c irri ol 1h1s 1s thi t n11imoers pay lower Soc 31 Securi ty contrhuuons and do not quihfy for t ~c adduwnal component of tne state scheme

The HSBC Bank (UK) Pension Scheme Defined Benefit Scheme

HSBC~ V()JJR W()RJ n OFFTNANrlAI ~FRVlrRS

Appendix 3 --- ------middot---middot- - ---shy

Introduction

Wdcomc to your ~uidc to lhc Defined Bcnclit Scncmc (the DBS) or the HSBC Bunk UK) Pension S1heme (lhc Schcml) Thi booklet explains how the DBS wnrks and the bencliLi nrovded 10 you

Makinp urnm~cment~ for when you retire 1s very importan1 The DBS provides you Wllh a rdngc of attrnctive benefits to olTcr you sccunty in retirement imd also lo your dependants in the cvcat of your death

The DBS is non-contributory (thc1t b you do not contnburc IOYJrds any of the bcnerts) and offrr a range of benefih de ipictl lo proldr a SlCutc income when t is necdcd e ither now or in the future Your ptnion hcncfi1s are bnscd ltln

bull your period or mcmbcr~l11p or the DBS

bull your carnin~~ whln you retire

You iln ca~ly check how much pen5ion the DBS will provide al any time in the future Because your pension i based on your final salary it will mrrrHsc in line with your earnings during your career

As well as a pcnsmn the DBS pngtvdcs life a~urunt~ COVlr 11 surviving spouse pea-ion duldren1 allowmccs und an ill-h~hh pemcon

Your Baste State Pension will be paid m addition from your State Pension A2e

Thi-s booklet cxplnins the main bcndit or the DBS However plcitlgtl remember ibull is only inlcnded as a lU1c The Sdteme is tovemed by n formal document known u~ the Thu1 Deed und Rules twhch wvuld owmdc the booklet if dny difTcrentI occurred

The informlt1lion concamed m this booklet should answer most qucslions you may havtmiddot about your pen~1on untl other benefit Jf you need to a~k a spcci1tc queston about your benc[its please cont1ct the DBS Administration Centre at

The DBS Adminislralion Centre HSBC Bank pie 6 Poultry

Loodon EC2R 8AJ

Telephonemiddot 020 7260 6869 Internal 7903 6869

To avoid any doubt this booklet docs not apply to mcmbcn of the HSBC Bank (UK) Pension Scheme who have trnnsfemd in rom other Group pension schemes and conlinue to uc rue benefits in dccorilance w1lh the specific benefit bases of those schemes

Autru~I WOO

Appendix 3 --- ------middot---middot- - ---shy

Introduction

Wdcomc to your ~uidc to lhc Defined Bcnclit Scncmc (the DBS) or the HSBC Bunk UK) Pension S1heme (lhc Schcml) Thi booklet explains how the DBS wnrks and the bencliLi nrovded 10 you

Makinp urnm~cment~ for when you retire 1s very importan1 The DBS provides you Wllh a rdngc of attrnctive benefits to olTcr you sccunty in retirement imd also lo your dependants in the cvcat of your death

The DBS is non-contributory (thc1t b you do not contnburc IOYJrds any of the bcnerts) and offrr a range of benefih de ipictl lo proldr a SlCutc income when t is necdcd e ither now or in the future Your ptnion hcncfi1s are bnscd ltln

bull your period or mcmbcr~l11p or the DBS

bull your carnin~~ whln you retire

You iln ca~ly check how much pen5ion the DBS will provide al any time in the future Because your pension i based on your final salary it will mrrrHsc in line with your earnings during your career

As well as a pcnsmn the DBS pngtvdcs life a~urunt~ COVlr 11 surviving spouse pea-ion duldren1 allowmccs und an ill-h~hh pemcon

Your Baste State Pension will be paid m addition from your State Pension A2e

Thi-s booklet cxplnins the main bcndit or the DBS However plcitlgtl remember ibull is only inlcnded as a lU1c The Sdteme is tovemed by n formal document known u~ the Thu1 Deed und Rules twhch wvuld owmdc the booklet if dny difTcrentI occurred

The informlt1lion concamed m this booklet should answer most qucslions you may havtmiddot about your pen~1on untl other benefit Jf you need to a~k a spcci1tc queston about your benc[its please cont1ct the DBS Administration Centre at

The DBS Adminislralion Centre HSBC Bank pie 6 Poultry

Loodon EC2R 8AJ

Telephonemiddot 020 7260 6869 Internal 7903 6869

To avoid any doubt this booklet docs not apply to mcmbcn of the HSBC Bank (UK) Pension Scheme who have trnnsfemd in rom other Group pension schemes and conlinue to uc rue benefits in dccorilance w1lh the specific benefit bases of those schemes

Autru~I WOO

A ppendix 3 ----middotmiddot=middot--arraecmrazsam TECIIJI

ii

Terms you need to know

The following words und pltr1s~ 1111 usa-ltl lhrouhout the hook let 11nd arc listed here for e-Jsy reference You m1y lintI it helpful 10 refer tu thi~ page as you read the bookie

Addilional hours

I I

j

Bank

Basic State Pension

Cont111ct~ut

Defined Bendir Scheme (DBS)

Final salary

Croup

Guaranteed Minimum Pettilon (GMP)

GMPdate

Normal telirelKnt

age(NRA

Pensionable service

Many key-t ime slttlT work over nnd above their contructeltl number of hours on a regular basit These addilionsl hour arc pensionable up to a tCiling Ml thnt the 101al

number of hours does not exceed tl10e of an cquivmiddottlcnt full-time member of lgtltff

Overtime payments are not pensionable

HSBC Bank pie the ptindpil employer of the Scheme

A pnsi-0n paid by cbc state to those with enough National fnsurunce conrrihutiuns

You pay lower Nationii lnsur-lt111t-e 1vntrihu1ion) and do 1101 earn Stare Fami11~-Rcl1lcd Pension Shcmc (SERPS) crcdi1s whilst a member of the DBS In return the DRS pruvidt~ u level of benefit which exceeds the Gowmmcnt qualily tandunl for co111rnctini_-out ContrJcting-out d~~ not mean that OU lose yur entitlement 10 a 8-slc State Pe11inn

The DBS provides benefits to employees who jmncd the HSBC Bank (UKJ Pension Scheme prior to I July 1996 Key-lime s111rr employed on temporury or fixed-term contracts cleaners and Jllards were excluded from memberhip

A person who m the Trusteemiddot~ opm1on is linancitlly ltrcnd1nt on you

The innual equivulcnt of your last fi~ed Jlary or ar--- uL the date of retirement for leavint or death 1f elt1rlier) excluding ovenime pay and mmt lt1llnw111ttS roi- posl-1974 service it muH often be the uc1u1I salary payment over the last 12 months

At uniin lc-els of $1h1ry membersmiddot bcncfib are 1ffcc1ltd hy various stllutory riltstrictiom Tl~se apply lhrouhout to final N111ry und arc relerrcd to in lhe relcvunr plctu-s in chis booklet

HSBC Holdmt s pie and all subiidittry companic in the Umlctl Kinid11111 (UK ) Chaonl Islands and rhc lsk of M1m

The p 1rl of your Schfflle peniinn hroaJly cquivtlent to the pension (if iny) you would ha11c nltcivcd from SERPS for 1he period from April 1978 10 Aprl 1997 durins which )lgtu have hecn mcm~r of 1hc DBS

The uiie from whkh the Guaranteed Minimum ~mma (GMP) is p-1y1bl currently 65 for men ioJ 60 for women

NRA is usu lly your 60th birthday However your employment will terminute 1tutomu1icaUy 111 the cnltl of the month in which your 60th birthday occurs unless you o1re olhcrwi-e 11dviS--d hy imlividuul 11ouce

The number of ycirs (and l-Omplctcd mon1h~I uf mem~rh1p of the DBS during which you h11ve been in imployment wilh a part1cipmng cmplogtr up lo a maximum of 40 ears

Any tmnfemll-in servic may ~ included 1bull may ny other period the 811nk may approve for rcMinn purpotshy

Since I Jmuary IIJlt4 rhc DBS has applied 10 both full -1imc und key-time employment with a pflic1patin11 emplo)lr Any period of key-llne ~rvcc hcfon thilt date will only n-un1 towMds pens on benclit under the DBS 1f it ws Irelied a pensionahle under the terms or 1hc pnv1ous Midland 8 mk Key-Time tgtcn~on Scheme

ii i

Appendix 3

Qualifying 1oervice

Scheme

Sun-Mng spouse

S1111e ffductlon

S tilt- Ebullrnln1tRel11hd Ptn~lon ScMmc (SERPS)

State Pcnikln Age

TrUlgtlei

Period of servcc whilst a member ur the DBS 101ether wtlh any JgtCfL~Kgtnoblc servke under a prev1ou employer chcmc i11 rc~pccl of which a 1rinsfer has lxoen madl into the DBS

The HSBC Brnk UK ) Pcn~ion Scheme

Yuur husband or w1fr nl the date ur your dcnth wih whom you ~re ortlini ttly nsidcnt

The deduction fnim your Scheme f1COsun of m unount cqu11 10 l801h t1f the 8a~lc StarrshyPenslon wluch would hmI been pyihfc to d ~ne ~ Nln an the 52 weeks bcfl~ rctmmem tnr c1vhig d111c if tarlier for c11h year (and ompktcd month~ or pemioltllble senice (UOJUttctl where ippropni11e for key-time scrv1ccJ This deduction is on ipplk-tl rrom Stile P~JKion Age

The udd uon11 stute pension earned if yu had no been contracted-out

The ug~ 111 which the 1111c petsioo become~ pbullyihlc Stale Pcnslon Alt 1s currently n5 for men tnJ 60 or women but II I) to be l(IUd~ m 6S OYCr a IO-ye1r pb11su1g-h1 fllrtod

starling in 2010

HSBC Bunk Pctmon Trus1 (UK) Limited

t f

I

I

Appendix 3 middot~-- middot-middot-----_~~---shy

Contents Introduction

Term~ you need to know it

The Defined Benefil Scheme (DBS) at a glance

Joining the Defined Benefit Scheme (DBS) )

Your ntinmcnt pension 4

Cush option ul retirement 6

F~1mily protection 7

Death in retirement 9

Bencfils on ltav111-t IU

Volumary contributon arrangement (VCA) II

How the Scheme works 12

The Stute Pension Scheme 13

Further informotton 14

2

2

Appendix 3

The Defined Benefit Scheme (DBS) at a glance

Wit( )OU IYrirt at If )VIit lie in Uflicr Ifym dir aft Ifyubull lra~t litforr 11or1 rrtlnmtnt a htau 11ar111al rtrirtmrrrr normuJ retittmttrt 11e

tarl) or tlrrort(h ill ltea(ti rtlillMnt agr

Yr1u rcnmiddotil~middot u1 rmrntbulltliu1bull t msJ 11111 s11111 A Sllrliritt~ AflOrtlt middotf 1111 unmiddot cbullntithbulld 1 ftlltitm for lifr IS fU_ltlht ~p1uJa u drjlrrltd flt-

pmiddot11rm it lIYl111middot

11r 11ur pla IJf

II wlutlPtltdJJII a nri1lti11 spoust middots or II t-l1ildrtbull11r 11 tm1t~ltr w11middot for lt drpcnda11t tllfllllf 111111tln

11w w plm pJtf

a rax-(rrtbull rnrlt tJ d11ldll11degr p11Jll1lt middot11rh r1bullp11rd1t1middott1I middotrutl 1tll(I (II ui1ttn( t ltUIII hm1fi1~

(Slr fUft~ 4-fgt ( Scbulllt pugt~ middot-11) I S1bulltbull 11~t ) (Smiddot1middot fl JlJJ

If you opt out of 1hc DBS you an~ covered only for a cash lump sum of twice your final i alary (al the date of death) payable on death in servce before normal rtlinment age (sec ptgc 7)

Note

The payment of ltomc of ltcie benefits may he subject to certain condition outlincll in tlctuil Idler in this booklc1

111 benefits payable from the DBS togcthcr with uny benefits payable rrom any previous penion schemes or which you were a member are subject 10 maximum limitntions laid down by the Inland Revenue In certain circumstances 08S benefits may have lo be reduced

Appendix J

3

Joining the Defined Benefit Scheme (DBS)

The DBS ha~ been closed to new members since I July 1996 All new emplotcli of the Group from this ltlate lrnvc bcc-n offered membership of the HSHC Odined Contribution Rell~mcnt Benefit Scheme (DCS) another rcction of the I ISBC Bank (UK) Pcmon Scheme If you believe you mdy be eligible 10 join the DCS please refer to the DCS booklet 11 copy of which can be oblllinc-d from the DCS Administru1ion Centre by telephoninf 01727 775050 (lntcrnul 7970 5050)

Transfers in

At the Trustees discretion the DBS is able to accept transfer payments from other approved pension arrdngcments If you supply the detail of your prcv1ou employment the DBS AdministrJtion Centre will invcsti~lte your own situation and tell you the amount of additional benefits your transfer puyment will purth11e in the OBS Transferring your pension may not n~elilJrily be in yaur beil inlefClts It in doubt it is suamp1csteltl th1l you obtain independent finu11c1ul ultlvicc for which you should cxpccl 10 p1y a fee

Change in number of hours of employment

If your rontracted hours incrcJic or ltlecrellSC you can still reman in the DBS (unless you opt our) Your DBS bendiLlt will be adJUStcd 10 renc-cl these chungl~

Benefits for members who join on or after 1 June 1989

The amount of pension and other benefits payc1blc to and in respect of members who join the DBS on or aOcr I June 1989 arc rcsLricted by lcgislaton Details of these rcmictions appear at apprl)priale places in lhe booklet

Appendix 3 middot~-- middot-middot-----_~~---shy

Contents Introduction

Term~ you need to know it

The Defined Benefil Scheme (DBS) at a glance

Joining the Defined Benefit Scheme (DBS) )

Your ntinmcnt pension 4

Cush option ul retirement 6

F~1mily protection 7

Death in retirement 9

Bencfils on ltav111-t IU

Volumary contributon arrangement (VCA) II

How the Scheme works 12

The Stute Pension Scheme 13

Further informotton 14

2

2

Appendix 3

The Defined Benefit Scheme (DBS) at a glance

Wit( )OU IYrirt at If )VIit lie in Uflicr Ifym dir aft Ifyubull lra~t litforr 11or1 rrtlnmtnt a htau 11ar111al rtrirtmrrrr normuJ retittmttrt 11e

tarl) or tlrrort(h ill ltea(ti rtlillMnt agr

Yr1u rcnmiddotil~middot u1 rmrntbulltliu1bull t msJ 11111 s11111 A Sllrliritt~ AflOrtlt middotf 1111 unmiddot cbullntithbulld 1 ftlltitm for lifr IS fU_ltlht ~p1uJa u drjlrrltd flt-

pmiddot11rm it lIYl111middot

11r 11ur pla IJf

II wlutlPtltdJJII a nri1lti11 spoust middots or II t-l1ildrtbull11r 11 tm1t~ltr w11middot for lt drpcnda11t tllfllllf 111111tln

11w w plm pJtf

a rax-(rrtbull rnrlt tJ d11ldll11degr p11Jll1lt middot11rh r1bullp11rd1t1middott1I middotrutl 1tll(I (II ui1ttn( t ltUIII hm1fi1~

(Slr fUft~ 4-fgt ( Scbulllt pugt~ middot-11) I S1bulltbull 11~t ) (Smiddot1middot fl JlJJ

If you opt out of 1hc DBS you an~ covered only for a cash lump sum of twice your final i alary (al the date of death) payable on death in servce before normal rtlinment age (sec ptgc 7)

Note

The payment of ltomc of ltcie benefits may he subject to certain condition outlincll in tlctuil Idler in this booklc1

111 benefits payable from the DBS togcthcr with uny benefits payable rrom any previous penion schemes or which you were a member are subject 10 maximum limitntions laid down by the Inland Revenue In certain circumstances 08S benefits may have lo be reduced

Appendix J

3

Joining the Defined Benefit Scheme (DBS)

The DBS ha~ been closed to new members since I July 1996 All new emplotcli of the Group from this ltlate lrnvc bcc-n offered membership of the HSHC Odined Contribution Rell~mcnt Benefit Scheme (DCS) another rcction of the I ISBC Bank (UK) Pcmon Scheme If you believe you mdy be eligible 10 join the DCS please refer to the DCS booklet 11 copy of which can be oblllinc-d from the DCS Administru1ion Centre by telephoninf 01727 775050 (lntcrnul 7970 5050)

Transfers in

At the Trustees discretion the DBS is able to accept transfer payments from other approved pension arrdngcments If you supply the detail of your prcv1ou employment the DBS AdministrJtion Centre will invcsti~lte your own situation and tell you the amount of additional benefits your transfer puyment will purth11e in the OBS Transferring your pension may not n~elilJrily be in yaur beil inlefClts It in doubt it is suamp1csteltl th1l you obtain independent finu11c1ul ultlvicc for which you should cxpccl 10 p1y a fee

Change in number of hours of employment

If your rontracted hours incrcJic or ltlecrellSC you can still reman in the DBS (unless you opt our) Your DBS bendiLlt will be adJUStcd 10 renc-cl these chungl~

Benefits for members who join on or after 1 June 1989

The amount of pension and other benefits payc1blc to and in respect of members who join the DBS on or aOcr I June 1989 arc rcsLricted by lcgislaton Details of these rcmictions appear at apprl)priale places in lhe booklet

2

2

Appendix 3

The Defined Benefit Scheme (DBS) at a glance

Wit( )OU IYrirt at If )VIit lie in Uflicr Ifym dir aft Ifyubull lra~t litforr 11or1 rrtlnmtnt a htau 11ar111al rtrirtmrrrr normuJ retittmttrt 11e

tarl) or tlrrort(h ill ltea(ti rtlillMnt agr

Yr1u rcnmiddotil~middot u1 rmrntbulltliu1bull t msJ 11111 s11111 A Sllrliritt~ AflOrtlt middotf 1111 unmiddot cbullntithbulld 1 ftlltitm for lifr IS fU_ltlht ~p1uJa u drjlrrltd flt-

pmiddot11rm it lIYl111middot

11r 11ur pla IJf

II wlutlPtltdJJII a nri1lti11 spoust middots or II t-l1ildrtbull11r 11 tm1t~ltr w11middot for lt drpcnda11t tllfllllf 111111tln

11w w plm pJtf

a rax-(rrtbull rnrlt tJ d11ldll11degr p11Jll1lt middot11rh r1bullp11rd1t1middott1I middotrutl 1tll(I (II ui1ttn( t ltUIII hm1fi1~

(Slr fUft~ 4-fgt ( Scbulllt pugt~ middot-11) I S1bulltbull 11~t ) (Smiddot1middot fl JlJJ

If you opt out of 1hc DBS you an~ covered only for a cash lump sum of twice your final i alary (al the date of death) payable on death in servce before normal rtlinment age (sec ptgc 7)

Note

The payment of ltomc of ltcie benefits may he subject to certain condition outlincll in tlctuil Idler in this booklc1

111 benefits payable from the DBS togcthcr with uny benefits payable rrom any previous penion schemes or which you were a member are subject 10 maximum limitntions laid down by the Inland Revenue In certain circumstances 08S benefits may have lo be reduced

Appendix J

3

Joining the Defined Benefit Scheme (DBS)

The DBS ha~ been closed to new members since I July 1996 All new emplotcli of the Group from this ltlate lrnvc bcc-n offered membership of the HSHC Odined Contribution Rell~mcnt Benefit Scheme (DCS) another rcction of the I ISBC Bank (UK) Pcmon Scheme If you believe you mdy be eligible 10 join the DCS please refer to the DCS booklet 11 copy of which can be oblllinc-d from the DCS Administru1ion Centre by telephoninf 01727 775050 (lntcrnul 7970 5050)

Transfers in

At the Trustees discretion the DBS is able to accept transfer payments from other approved pension arrdngcments If you supply the detail of your prcv1ou employment the DBS AdministrJtion Centre will invcsti~lte your own situation and tell you the amount of additional benefits your transfer puyment will purth11e in the OBS Transferring your pension may not n~elilJrily be in yaur beil inlefClts It in doubt it is suamp1csteltl th1l you obtain independent finu11c1ul ultlvicc for which you should cxpccl 10 p1y a fee

Change in number of hours of employment

If your rontracted hours incrcJic or ltlecrellSC you can still reman in the DBS (unless you opt our) Your DBS bendiLlt will be adJUStcd 10 renc-cl these chungl~

Benefits for members who join on or after 1 June 1989

The amount of pension and other benefits payc1blc to and in respect of members who join the DBS on or aOcr I June 1989 arc rcsLricted by lcgislaton Details of these rcmictions appear at apprl)priale places in lhe booklet

Appendix J

3

Joining the Defined Benefit Scheme (DBS)

The DBS ha~ been closed to new members since I July 1996 All new emplotcli of the Group from this ltlate lrnvc bcc-n offered membership of the HSHC Odined Contribution Rell~mcnt Benefit Scheme (DCS) another rcction of the I ISBC Bank (UK) Pcmon Scheme If you believe you mdy be eligible 10 join the DCS please refer to the DCS booklet 11 copy of which can be oblllinc-d from the DCS Administru1ion Centre by telephoninf 01727 775050 (lntcrnul 7970 5050)

Transfers in

At the Trustees discretion the DBS is able to accept transfer payments from other approved pension arrdngcments If you supply the detail of your prcv1ou employment the DBS AdministrJtion Centre will invcsti~lte your own situation and tell you the amount of additional benefits your transfer puyment will purth11e in the OBS Transferring your pension may not n~elilJrily be in yaur beil inlefClts It in doubt it is suamp1csteltl th1l you obtain independent finu11c1ul ultlvicc for which you should cxpccl 10 p1y a fee

Change in number of hours of employment

If your rontracted hours incrcJic or ltlecrellSC you can still reman in the DBS (unless you opt our) Your DBS bendiLlt will be adJUStcd 10 renc-cl these chungl~

Benefits for members who join on or after 1 June 1989

The amount of pension and other benefits payc1blc to and in respect of members who join the DBS on or aOcr I June 1989 arc rcsLricted by lcgislaton Details of these rcmictions appear at apprl)priale places in lhe booklet

4

Appendix 3 middot- - -------- ___

Your retirement pension

When you ntin you will rcoivc a pension from the DBS Your pension at rdircmenl is bS(d on your nnlll salary Jnd pensionable service

Normal retirement pension

When you retire ut your normal retirement age uml asumin~ your contmcled hour have lll1l changed ygtur pcnlon i culcululccl u

l60th x final salary x pensionable service kgtgtS the st11te dedociion from GM P dale

If while you are a member of the DBS your contractamp hours vary your pens on will be calcula1cd on the 160111 formula However uny period of pensionable ~rvicc dun n~ wn11h your contr1cted hours ire less than full-time (cummtly Yi hours per week wbullII be ~letI down to it~ lull-time equivalent In addition if al normal mlremenl axe your euntrictcd hours are lcs thin full time then your finaJ sahtry will be grossed-up to its full-time cquivdcnt

For example 1f you serve 14 year in a contmct flf 20 hours per week lhcn ~even years on a conlrJcl of 30 hour per week reti rm1 on a final s11lary of i 60UO pa your pension i~ cilculatttl os follow-middot

Your f rosscd-up final sal11ry would be 3510 x pound6000 = 7000

Your pensionable senice would be ( 14 x 2035) + (7 x J035 = 14

So your pension would be 1160th x 14 x pound7000 = pound1633 per innum

Basic State Pension Provided you have a full record of NtUonal lnsur-ince coniribu1ions you Wlll recx-ivc your Basic Stlile Pension from State Pensil(l Age

Pre-1986 emrants Members who Joined the Sclteme prior lo 1975 are subject 10 different rules l n addiuon members who joined the Sd1emc pror lo 19amp6 may be subJect t) d1ffenn1 levels of benefits a~ eitplaired in a c1rculur cnlitloo middotEqLWJity 111 Pensionbull dated 5 Janudry 1995 Copie~ of relewnl ltlocumenb can be obuincd by contncl nt lhe DBS Administr-al ion Centre

Early retirement

Your employer hagt the option to offer you an immedi11~ early retirement pension from uge 50 onw-c1rd~ You must ha~e completed five years pensionable 11ervfce to qualify for an Cdrly rel1rcment pension except for ~pccial provisions under the Security of lraploymcnl Agreement when the period i two years

In th-is cusc your pension is calculated applying the l60th formu) u in~ your final salary and your pensiooablc Sttvlce complered 10 the date when you retire early The stale deduction 1~ calcul1tcd AS at your ditc of earl~ retirement but 1s not applied unttl GMP date

If your contracted hours vary during your Cdroer the c1fculation of the etrly retirement pension is adjusted m shown on the prcviou pa~-c A~un the stale deductiaa 1~not npphcd un11I State Pension Asc

The level of your pension 111 GMP date cannot Ix hss th1gtn the level of GMP which mu~t be paid from the DBS in full

5

Appendi x 3 - _ - ----- -Z-2C _ _ bullbullbull

Ill-health retirement

ff your employer require you to re1irc betlUsc of severe 111-hc llh you may rccive an immcltlurtc ill-hc1l1h pension provid~ you hc1vc completed five yemmiddot pensionbullbfe service The pension is Lmiddotulculatiltl on lhc 160 formul-1 bt)ed upon y-0ur nnal salary unltl pensionable servkc al 1hc ltlate of c1rly retircmem (with final salary and pensionable scrricc adjusted as ~hown hove 1 your t 1lllllJtled hour v1ry)

The Trustee may ue it dtscrcuon 10 middotncrea-e the pengton culcul111ion by yrnnling in adtl1Lion some or tll of the polcnliul pensiooable service (convtrteltl into its fulHmc cquiw1lcn1 1f al Lhe date o f your early retirement you were not in rull-timc -11rv1ce) which you could hivc cumplcted up 10 your nonnal rtliremml age Thi~ ~rJOI

will only be made where the Trustee is s11islieltl thut your illness is ~evere with no likelihooltl lhll you will nltOCr or be able lo undcrl11ke nny tll inful employment 1n he future

The state deduction will be culculaled ll l the dale of you1 early retirement ha~cd on your period of membcnhip of the DBS until then (ie i~bullnoring any uddi1ionul pensionable senmiddotice rr m1rtl i1 the thscrction of the middot1 rumee) but will not be 1tpplicd lo reduce your ill hcallh pension until you rmiddotch State Pen~on Aite

Ill-health pen~1ons are subject to reviev by the Truseee tnd ma- he nduced or suspended for a11y perotli before normal retirement llJtC if 1t s commfored thit you have 10 11n e~tent recovered from -our iflne~s or d1ahility or haw found alttrn1t1ve piid employment

Increases

All pensions m payment under the DBS are incrc1set annually m hnc wilh the increase in the Retail Prices lndc subjcc1 to a maximum of 5 per cent From your GMP date thc-sc increasegt do not apply to the GMP part of )ltour perb 1on in payment The GMP increase~ dnnuilly in line with the increase in the Rctuil Pmclgt Index partly pJ id by thc DBS but muinly p1id by the State In addi11on the Ra11k antl the Trustee will revew the level of your pcnsion each year and may ut their discrc11on aw1rd ll higher increlc

Jnrre-des ure applied fmm I January each )CU Following your rctirimcnt the firt increase will be proportlomtl to ~ellect the ltlate of your retirement eg if you retire on JO June and the iir~t nnnual incrcac is 3 [1Cr cent you will receive 6112 of this incredoe ie U per ccnl

The state deduc1loq b u facd omount c1lculitcd tl the dit- of ccusinl pensionable senke ind i not i11creaseltl each year

Restrctions

Legislation hus bt-en introduced rtlgttrictini the iimount ot pension pJyablc JI rc1ircment lo certain mcmbcn

(a) If you joined on or arter I June 1989

The maitimum final salary (or the full-time cq111valcnt if you re not m full-time service) for pen~ion purpo11tl

i~ limited by lhc Inland Revenue to the cimmgs c-p ll1is eaminps cap currenily J91800 per annum (tix year 2000-01 ) which is ellpccLCJ 10 incre1sc in line with prke innlltion Dcttils of the current arrmtcmcnts if you re afTectetl by this restriction ctn be ohtd1ncd from the DBS Altlrniniltitrauon Centre

(b) All mcmbcn

tr you are eamint1 over pound100000 (or the full-11m~ cquivdlent if you are not in full-t ime ccrvcc) ll ret ircmc1 your peM1on will be cilculated on the ttvcri11Cnnal salary over the lust three yttrs before rctircmcnl

Appendix 3 --------------------------------~~ct~middot~--r-------~----i _

6

Cash option at retirement

Whenever yuu retire you can co1wcr1 part of your pension to a cuh lump ~um currently lax-free Your fgtll1Siun

is taxcltl as eamctl income on lhc normal Pay-a~-you-e1rn (PAYE) basis

Certain rcsLrittions apply to this option By convcrtinl your pension to cch you cannot reduce it below the level of the GMP plus state deduction In extreme cases this may mean that no cash lump sum is pay-Jblc and you will be udvisetl if this uppliei to you al retirement

Inland Revenue restrictions limit the maximum lump sum you can receive

If you joined the DBS prior to l 7 Murch 19R7 and retire lil norm11I retirement age the maximum cush lump sum you can receive is I times your ftnal salary provided that you have completed nt least 20 yearimiddot acwal service With k s crvicc or on early retirement the limits an lower Ovcr1ll l1mits must take into account any benefits you may have from previous schemes

If you joinctl the DBS on or aner 17 March 1987 and retire ut normal retirement age the maximum cash lump sum you can receive is limited to 380hs of final salary for cdch ycir of crvicc which means Lhat you can build up to Ih limes your fina l salary after 40 yCltlnmiddot service

Change in hours

If your contracted houri vary the amount of your Ctgth lump sum w11 be altered to rcfloct these chungcs

Restnctions

If you joined the 08S on or artcr I June 1989 lthe re tnctinn on r111al salary outlined in (11) on page 5 itpplies to the calculution of the mlt1ximum cash lumr sum In lddit1on your final salary (or the full-time cquivalcnl if you are illol in full-11mc service) if you joined the DBS on or 11ftcr 17 March 1987 but before 1June 1989 is restricteltI 10 pound100000 per annum for the purposes of culculitting the maximum lump sum

Ir you would like 10 know how much La~-rrcc cush you urc entitled to thtn the DBS Administration Centre can sup11ly you with full details us you approach reti rement

You should be aware that liny pcnsmn increases i_Tdnleltl a~ deldilcd on pa~e 5 will only be rayablc on the pemuon nmd1nin t1 afl~r you have taken a lump sum

Pre-1975 service

If you joined 1hc DBS before 1975 an alternative formula for calculating 1he Lash lump sum may apply Full details of your cnlitlcrnent will be ~iven to you in your retirement schedule which is sent lo you by the DBS Administration Centre as you approach retirement

Appendix 3 bull - as= - ~ces -r bull= - cc

r 7

Family protection

If you die in service before normol retirement llltC the followinl benefits may be payable I

bull Cash lump ltllm

bull Surviving spouses pension

bull Children ullowmcc

bull Discrot1onary dtpcndants pcn~ion

Cash lump sum

TIe CJSh lumfl gtUm payable on your dtHh iq four timis your final salary at the ltlate of dcalh

So lhal there is no potential liJbilily fur lnher IJncc Tux 1he Trustte h~ comrlctc discretion~ to whom the CJsh lumr ium is paid Normal~ this will he your survlvinit spoue dependants or other rclatiYCs However you can let the Trustee know to whom you would like the money paid by c-omplctin t an Expnss1on of WLh form a copy of which cun be found 111 the back of 1l11s booklet AJthough the TMD1ee will try to take your wisncs into 11ccoun1 it cannot be bound by them

Please engturt you update your F xpresq1on of Wish form if your peranal crcumstanccs chanre such as on dbullvonc or mrriare

Addit1ondl cop1e11 of lhis form are av-Jilit ll from the DBS Administrnion Centre

Surviving spouses pension

If you die in loervicc a pension ii paid lo your ~rvivlnjt spouse Any non-rcidcnt spoLsc wiU however ~-encrllly nccivc u propori un of your aarued C MP anti ny 1doilional pension lo comply with 1he contrictm-obullt rule

The amounl of the survMDI spoasemiddots pension is 50 per ccnl of our penion entitlement b-ascd on your final sabtry Ht the lime of d~th c1nd your pensionable lffvlce indudn( not only lhe period up 10 your du1c of deuh but Hbo lhe potcnti l pensionable service you would hctvc comrlc1cc uo tu your nonn1d retirement age suhject lu a maximum o bull 40 years No ~1a1 dedtlction is applied

ff 111 Lhe date of your death you are not m full-time tcrv1ce and your contniclcd hours vary th~ potent id )cars 10 your normal nllmnenf a~ will be trcjilcd as if you had conunued workinit your cumnl houri These will be ronverllxl into lheir full-time equivamplenl and the cilculauon ad u~t~d to nOcct your period of full and kcy-11me ervicc

If your surviv n)I spouse is more than 15 year~ younrcr than you thre 1s a nJuction in the pension of 2 i pe-r cent for cuch complete year in ex~ of I5 year

Restrictions

Where member joined lht DBS on or artcr I June 19 the restriction on final salny in (a) on pa1gte 5 wtl l apply to the calculuion tmiddotl the Cbh lunp sum and the survh-ing spoue pension

Appendix 3 --------------------------------~~ct~middot~--r-------~----i _

6

Cash option at retirement

Whenever yuu retire you can co1wcr1 part of your pension to a cuh lump ~um currently lax-free Your fgtll1Siun

is taxcltl as eamctl income on lhc normal Pay-a~-you-e1rn (PAYE) basis

Certain rcsLrittions apply to this option By convcrtinl your pension to cch you cannot reduce it below the level of the GMP plus state deduction In extreme cases this may mean that no cash lump sum is pay-Jblc and you will be udvisetl if this uppliei to you al retirement

Inland Revenue restrictions limit the maximum lump sum you can receive

If you joined the DBS prior to l 7 Murch 19R7 and retire lil norm11I retirement age the maximum cush lump sum you can receive is I times your ftnal salary provided that you have completed nt least 20 yearimiddot acwal service With k s crvicc or on early retirement the limits an lower Ovcr1ll l1mits must take into account any benefits you may have from previous schemes

If you joinctl the DBS on or aner 17 March 1987 and retire ut normal retirement age the maximum cash lump sum you can receive is limited to 380hs of final salary for cdch ycir of crvicc which means Lhat you can build up to Ih limes your fina l salary after 40 yCltlnmiddot service

Change in hours

If your contracted houri vary the amount of your Ctgth lump sum w11 be altered to rcfloct these chungcs

Restnctions

If you joined the 08S on or artcr I June 1989 lthe re tnctinn on r111al salary outlined in (11) on page 5 itpplies to the calculution of the mlt1ximum cash lumr sum In lddit1on your final salary (or the full-time cquivalcnl if you are illol in full-11mc service) if you joined the DBS on or 11ftcr 17 March 1987 but before 1June 1989 is restricteltI 10 pound100000 per annum for the purposes of culculitting the maximum lump sum

Ir you would like 10 know how much La~-rrcc cush you urc entitled to thtn the DBS Administration Centre can sup11ly you with full details us you approach reti rement

You should be aware that liny pcnsmn increases i_Tdnleltl a~ deldilcd on pa~e 5 will only be rayablc on the pemuon nmd1nin t1 afl~r you have taken a lump sum

Pre-1975 service

If you joined 1hc DBS before 1975 an alternative formula for calculating 1he Lash lump sum may apply Full details of your cnlitlcrnent will be ~iven to you in your retirement schedule which is sent lo you by the DBS Administration Centre as you approach retirement

Appendix 3 bull - as= - ~ces -r bull= - cc

r 7

Family protection

If you die in service before normol retirement llltC the followinl benefits may be payable I

bull Cash lump ltllm

bull Surviving spouses pension

bull Children ullowmcc

bull Discrot1onary dtpcndants pcn~ion

Cash lump sum

TIe CJSh lumfl gtUm payable on your dtHh iq four timis your final salary at the ltlate of dcalh

So lhal there is no potential liJbilily fur lnher IJncc Tux 1he Trustte h~ comrlctc discretion~ to whom the CJsh lumr ium is paid Normal~ this will he your survlvinit spoue dependants or other rclatiYCs However you can let the Trustee know to whom you would like the money paid by c-omplctin t an Expnss1on of WLh form a copy of which cun be found 111 the back of 1l11s booklet AJthough the TMD1ee will try to take your wisncs into 11ccoun1 it cannot be bound by them

Please engturt you update your F xpresq1on of Wish form if your peranal crcumstanccs chanre such as on dbullvonc or mrriare

Addit1ondl cop1e11 of lhis form are av-Jilit ll from the DBS Administrnion Centre

Surviving spouses pension

If you die in loervicc a pension ii paid lo your ~rvivlnjt spouse Any non-rcidcnt spoLsc wiU however ~-encrllly nccivc u propori un of your aarued C MP anti ny 1doilional pension lo comply with 1he contrictm-obullt rule

The amounl of the survMDI spoasemiddots pension is 50 per ccnl of our penion entitlement b-ascd on your final sabtry Ht the lime of d~th c1nd your pensionable lffvlce indudn( not only lhe period up 10 your du1c of deuh but Hbo lhe potcnti l pensionable service you would hctvc comrlc1cc uo tu your nonn1d retirement age suhject lu a maximum o bull 40 years No ~1a1 dedtlction is applied

ff 111 Lhe date of your death you are not m full-time tcrv1ce and your contniclcd hours vary th~ potent id )cars 10 your normal nllmnenf a~ will be trcjilcd as if you had conunued workinit your cumnl houri These will be ronverllxl into lheir full-time equivamplenl and the cilculauon ad u~t~d to nOcct your period of full and kcy-11me ervicc

If your surviv n)I spouse is more than 15 year~ younrcr than you thre 1s a nJuction in the pension of 2 i pe-r cent for cuch complete year in ex~ of I5 year

Restrictions

Where member joined lht DBS on or artcr I June 19 the restriction on final salny in (a) on pa1gte 5 wtl l apply to the calculuion tmiddotl the Cbh lunp sum and the survh-ing spoue pension

Appendix 3 bull - as= - ~ces -r bull= - cc

r 7

Family protection

If you die in service before normol retirement llltC the followinl benefits may be payable I

bull Cash lump ltllm

bull Surviving spouses pension

bull Children ullowmcc

bull Discrot1onary dtpcndants pcn~ion

Cash lump sum

TIe CJSh lumfl gtUm payable on your dtHh iq four timis your final salary at the ltlate of dcalh

So lhal there is no potential liJbilily fur lnher IJncc Tux 1he Trustte h~ comrlctc discretion~ to whom the CJsh lumr ium is paid Normal~ this will he your survlvinit spoue dependants or other rclatiYCs However you can let the Trustee know to whom you would like the money paid by c-omplctin t an Expnss1on of WLh form a copy of which cun be found 111 the back of 1l11s booklet AJthough the TMD1ee will try to take your wisncs into 11ccoun1 it cannot be bound by them

Please engturt you update your F xpresq1on of Wish form if your peranal crcumstanccs chanre such as on dbullvonc or mrriare

Addit1ondl cop1e11 of lhis form are av-Jilit ll from the DBS Administrnion Centre

Surviving spouses pension

If you die in loervicc a pension ii paid lo your ~rvivlnjt spouse Any non-rcidcnt spoLsc wiU however ~-encrllly nccivc u propori un of your aarued C MP anti ny 1doilional pension lo comply with 1he contrictm-obullt rule

The amounl of the survMDI spoasemiddots pension is 50 per ccnl of our penion entitlement b-ascd on your final sabtry Ht the lime of d~th c1nd your pensionable lffvlce indudn( not only lhe period up 10 your du1c of deuh but Hbo lhe potcnti l pensionable service you would hctvc comrlc1cc uo tu your nonn1d retirement age suhject lu a maximum o bull 40 years No ~1a1 dedtlction is applied

ff 111 Lhe date of your death you are not m full-time tcrv1ce and your contniclcd hours vary th~ potent id )cars 10 your normal nllmnenf a~ will be trcjilcd as if you had conunued workinit your cumnl houri These will be ronverllxl into lheir full-time equivamplenl and the cilculauon ad u~t~d to nOcct your period of full and kcy-11me ervicc

If your surviv n)I spouse is more than 15 year~ younrcr than you thre 1s a nJuction in the pension of 2 i pe-r cent for cuch complete year in ex~ of I5 year

Restrictions

Where member joined lht DBS on or artcr I June 19 the restriction on final salny in (a) on pa1gte 5 wtl l apply to the calculuion tmiddotl the Cbh lunp sum and the survh-ing spoue pension

Appendix 3 _______________________________~__~~--~middot-_==----- middotmiddot-- c

8

Family protection (continued)

Childrens allowance

If you die in service a children Jllowancc ~11 be provided for your dependent children under the age of 18 or 21 if in full-time cduc11ion or vocational trainin~)

At he ltliscretion of the Trustee older children m11y also 4ualiry for an ullowt1nic

Thl allnwmcc is a pcrcen11ic or he sun-Mng sp~middot~ pension dc~cri~d above (ignoring nny reduction for uiffercncc in a~cs or rcsidcnttul qualifications) The amount of the ullowunc-e will depend upon the number of dependent children 111 the 1imc or dcHh and will be payable in cquul share~ us follows

Numhtbullr n( 11u1li(Ji1t d1ildribull11 middot fsurvivin pousrts ptbulltL1middotit111

40 60

J 80 4 or more 100

Where no surviinJ( spouse or dtpcnd1mf~ pension (see below) i~ paydhle the ch1lltlrens allowdnce is doubled

Discretionary dependants pension If you tlfo without lc11v1ng a surviving ~pulLc 10 ullowance may be granted to a dependant wilh the approval or the B11nk 1111ltl Tn1lce

If you would like to nominite someone for the Trustee and the Bank 10 consider plcaic complete the Nominu11on or Specified Dependant form a copy of which can be found ut the back or this botklc1 Any person you nominate must qu111ify 11s a dependant ill the ltlute of your dcmh The Bank 11ml Trustee will nol be bound by your nomin1111on und in the event they dcciltle 10 puy u dcpcnltlants pension lhcy will unclcrtake their

ishyi

own independent checks 10 ensure the person nominated (or any other person) fits the delimtion of dcptndant If you arc married il may not be necessary to complete Chis form as your wife or husbmJ would normally meet he definit ion of surviving spouse

Please ensure that you update your Nomination of Specified Dependnnt form if your pcronal circumstances change Additional copies or this form arc available from the DB~ Administrllion Centre

bull

Appendix 3 ------------------------------~-__~rc=-o=Jbull== z==r=====----=----shy I I

9I i I I I

I I Death in retirement i

Tht DBS providLS a wiltlc rnn1e of protection after you retire

bull Sunlvlna spou~middots pension

bull Chbullldrcns illowance

bull Discretionury dcpendanf ren~ on

bull Possible cush lumr um

Surviving spouses pension

If you lc-ive II surviving spouse on your death in rc11rcmcnl a imiddotunMng spouse pension will be paydhlc However a non-re ident spouse will gcnerully receive II proportion of your GMP and lllY

ddilionlll pcn~ion to comply with con1ra1ing-ou1 rues

1be survMna spouses peniion is normally 50 per cent of the pension you were rcceivmg abull the time of death cnclut1ng any pcnsi11n convcnetl to cc1ih at rctinmenl The amount of your penion anltl any 1rwerted pen~ion will include all post-retirement incrcuscs

If your surviving spouse is more than 15 years younger Lhun you there 1s a reduction in the pension of 25 per 1ent for e-ich complce ye-c1r in cx~ss of 15 years

Childrens allowance

A childrens allowance is payable on death after retirement for dcpenden1 chtklren in lhc lame w1y us ou1lined on pare 8

Discretionary dependants pension

If you die w11hou1 leavini a nniYing spouse an allowance ma be grmted lo a depeadaat at Lhe dilgtCretion of the Trustee and BankJ If you would like lo nommitc someone for the Trustre und Bank lo (OrL~tder please complete the Nominu1ion of Specified Dependant form 11 copy of which can be found at lhe bc1ck of this booklet Any person you nominate must qualify as u dcprodant al the ltlate of your dcuth The Bank and Trusbullee will nol be bound by your nomination 1snd m the event they decide lo pc1y a dependant pension they will undertake 1hc1r own independent check~ lo ensure the pcron nominated (or any other person) poundits the

definition of dcpendanf If you arc married it may not be neccary to complete this form as your wife or hubampnd would nonnully meet the definition of sunMng spouse

Please ensure lhut you update your Nomination o f Spcclicd Dcixndant form if your peronal circumslances change dditionul copies of this form arc tVdtlable from th1 DBS Admini~trnlion Centre

Cash lump sum

If you die within live ycurs of your retirement u cash lump sum may be puy1blc equtl to the k s~r of four 1im~ fin1tl salary (lcs5 the inslalmcncs of pension p 1d since retircmcnL incrc-JSCltl 10 renlt11

any pt11s1on convcrk-d lo cash al retirement) and lhc bal~n(C of live yearsmiddot remaining pension

The Trustee has complete discretion as lo whom lhc L~dSh lumr ~um ii paid Normally this will be your sunMng spouse depffldants or 01hcr rclutiv~_ However you can let lhc Trustee know 10 whom you would like the money 10 be pailtl ty completing an Exprcs(ion of Wbh form u copy of which can he found JI the back of this booklet Ahhough the Trost~ wi ll try to lztkc your wishis inlu accounl it cmnot be bound by them

The restrictions on final salary oullincd in paragrnph (a) on pagt 5 aprly 10 this calculation where members join the DBS on or ancr I June 1989

Oealh whilst in the first five years of ill-health retirement

If you ntirc on the grounds of ill-heulth und su~4ucntly die within five years of the date of your nurcmcnl (but before dllaining normal rctiremenl age) a lump sum of fou r times )Our final salury at the dlt11e of your retirltmcnt will he paid If death occurs after you have reached normal retirement age the cash lump sum will be ca lculutcd as relerred to ubove under Cash lump sum

Appendix 3 ------------------------------~-__~rc=-o=Jbull== z==r=====----=----shy I I

9I i I I I

I I Death in retirement i

Tht DBS providLS a wiltlc rnn1e of protection after you retire

bull Sunlvlna spou~middots pension

bull Chbullldrcns illowance

bull Discretionury dcpendanf ren~ on

bull Possible cush lumr um

Surviving spouses pension

If you lc-ive II surviving spouse on your death in rc11rcmcnl a imiddotunMng spouse pension will be paydhlc However a non-re ident spouse will gcnerully receive II proportion of your GMP and lllY

ddilionlll pcn~ion to comply with con1ra1ing-ou1 rues

1be survMna spouses peniion is normally 50 per cent of the pension you were rcceivmg abull the time of death cnclut1ng any pcnsi11n convcnetl to cc1ih at rctinmenl The amount of your penion anltl any 1rwerted pen~ion will include all post-retirement incrcuscs

If your surviving spouse is more than 15 years younger Lhun you there 1s a reduction in the pension of 25 per 1ent for e-ich complce ye-c1r in cx~ss of 15 years

Childrens allowance

A childrens allowance is payable on death after retirement for dcpenden1 chtklren in lhc lame w1y us ou1lined on pare 8

Discretionary dependants pension

If you die w11hou1 leavini a nniYing spouse an allowance ma be grmted lo a depeadaat at Lhe dilgtCretion of the Trustee and BankJ If you would like lo nommitc someone for the Trustre und Bank lo (OrL~tder please complete the Nominu1ion of Specified Dependant form 11 copy of which can be found at lhe bc1ck of this booklet Any person you nominate must qualify as u dcprodant al the ltlate of your dcuth The Bank and Trusbullee will nol be bound by your nomination 1snd m the event they decide lo pc1y a dependant pension they will undertake 1hc1r own independent check~ lo ensure the pcron nominated (or any other person) poundits the

definition of dcpendanf If you arc married it may not be neccary to complete this form as your wife or hubampnd would nonnully meet the definition of sunMng spouse

Please ensure lhut you update your Nomination o f Spcclicd Dcixndant form if your peronal circumslances change dditionul copies of this form arc tVdtlable from th1 DBS Admini~trnlion Centre

Cash lump sum

If you die within live ycurs of your retirement u cash lump sum may be puy1blc equtl to the k s~r of four 1im~ fin1tl salary (lcs5 the inslalmcncs of pension p 1d since retircmcnL incrc-JSCltl 10 renlt11

any pt11s1on convcrk-d lo cash al retirement) and lhc bal~n(C of live yearsmiddot remaining pension

The Trustee has complete discretion as lo whom lhc L~dSh lumr ~um ii paid Normally this will be your sunMng spouse depffldants or 01hcr rclutiv~_ However you can let lhc Trustee know 10 whom you would like the money 10 be pailtl ty completing an Exprcs(ion of Wbh form u copy of which can he found JI the back of this booklet Ahhough the Trost~ wi ll try to lztkc your wishis inlu accounl it cmnot be bound by them

The restrictions on final salary oullincd in paragrnph (a) on pagt 5 aprly 10 this calculation where members join the DBS on or ancr I June 1989

Oealh whilst in the first five years of ill-health retirement

If you ntirc on the grounds of ill-heulth und su~4ucntly die within five years of the date of your nurcmcnl (but before dllaining normal rctiremenl age) a lump sum of fou r times )Our final salury at the dlt11e of your retirltmcnt will he paid If death occurs after you have reached normal retirement age the cash lump sum will be ca lculutcd as relerred to ubove under Cash lump sum

10

Appendix 3

Benefits on leaving

Leaving the Groups employment

If you leuve the Groups cmploymcnl before ret1rement you w11 be el~ible for one of the following bcncl1ts

bull Deferretl pension

bull Transfer value

bull Stitc benelils

Deferred pension

Provided you have completed two yearsmiddot qualifying SLnkc you will be entitled to u dcfcrrLd pension held for you in the DBS and paid from normal retirement age This pension ilgt c1lculatctl in the same way as a nonnal retirement pension uing your final sal11ry md ~ionable sttvicc to the date of leaving If your contractetl houn hove viricd the calculation b atljustcd as shown on puie 4

You m1y apply for your dererred penson to he paitl at any time on or afcer age io or eurlier if you arc suffering from 111 hCJhh If your application is aLCepted by the Trustee the pension will be reduced because it 1s paid early

Your dcrcrred pension is increased Cery yeur until it siurls to be paid Once ii has started lo be p1itl ii is reviewed annually tmd incrcccs on the basis set nut on pngc 5

Transfer value As an allemativc to k-cping your pension in the

DBS you can ask for a tntnsfer value to be paid tlircclly lO another approved pension arrangement (including a personal pcnsmiddoton)

Any member can a~k for 11 ubullc1nsfer value s1n1ement from the DBS Atlminislrution Centre The statement will quote your trall$fer value and let you know how to proceed The trsnsfcr value wtll he calcut~tcd in a manner approved by lhe Scheme Actuary and in accordance with the stslutory requirements

Normally a statement will be provided within three months of your rcqucsl You can only request a lrtmfcr value once every 12 rnomhs and ir you wish to go ahead with the transfer you must reply within three months of the quotation date otherwise the ligures are subw to cbante

State benefits

rr you habullc k~s than two year middot qualifying service your SERPS benefit relating lo the period for which you have bL-en contracted-out will be rcinstJlcd into the Slate Pension Scheme

Leaving the Scheme

Yuu huvc the right 10 opL out or the DBS while continuing to work for the Croup If you ltlo gtO you must ~ lC at lcc1st one monthmiddots wrinen nouce to Lhe Tn1~lec of )Our intention ro opt out of he DBS After e11piry of the notice you will pay higher Natmnal ln~umnce conlnbuuons If you leave the DBS 1l is 1101 possible to re-join ul a lu1cr dute

Tite Group docs not normally mukc a contnhution to uny other pension arrangement

You will be provitleltl with benefits under the DBS as ii you had left the Groups employment but in the event or your death m ervice before normal retirement age u cash lump sum of t~O times your final salary (which may be limited as outlined in paragraph (-4) on page 51 will be f)clid at the discrellon of the Trustee

Temporary absence

Your membership of the Scheme may continue at the Groupmiddots discretion if you arc lcmporarily away from work because of injury illness or other rcsons

If you httvc maternity t-avc under the terms or the Employment R11hts Act) your petSionable service will include your period of absence You will ~-onlinuc lo be protected by the Scheme deuth beneliti If you do noc return w11hm the terms or the Act your date of termination will be considered to be lhc date your maternity leave ceased

Restrictions

Where members join the DBS un or after I June 1989 the restrictions on fio11I Silary outlined on pige 5 apply to lhe calculation of benefits on leuvmg service or the Scbme

Change of address

Jr you retain Hn cntitltmtnl lo a pension in the Scheme after you have left the Group it is important that you notffy the DBS Adminis1ra1ion Ccnlrc of any changes of addrcF

Voluntary contribution arrangement (VCA)

Volunlnry contribution~ arc altractive for tholgtC who w ill to increiie the ntircmenc bcncliLS llluilable for thcmscl~ thtir surviYing spouse or dcpmdants up to the limits allowed by the Inland Revenue VCA ~

particulurly mtrJctivc to those who join the Group in mid-career

VCA investments are held scpan1tcly from and the benefits will be paid m addition 10 those outlined in this bookltl

You muy puy volunl1ry contribution~ provided you arc a member of lhc DBS and e1tpecl your DBS and VCA bcncitc to rcmam w11hin l nlnntl Revenue limits You may open a VCA uetounl on the first day or any month

VCA offers a flcitible and ta_it-dlic cnt wdy to 1ncrcisc your retirement benefits been use contributions arc deducted from your curnin1middot~ hltforcbull lax is L--Jlculatcd your 1axJble earnings are reduced and so is your tax liabihty at your hithcst rate

You have the choice of investing your contnbutions in a special deposi t account or through insurdnce companies

Any interest or bonus earned within VCA is tax-free with the exciption or dividends Cllrned on UK equities You have several bltnelil op1ions when considering how to upply your VCA account a l

retirement

4middot

Where ll VCA account is converted into pension at ret irement an annuity rate (or nchangc rdle) s u~ d to determine the level of pcmion th11 ~n be purchased Annuity rat~ CllO nuc1ua1c You may wish to take independent financial ud vicc to determine ir 01her tiu-ltfficient inves1ment vehicles (such as ISAs) may be appropriate to your own personal circumstances

It is up lo you 10 decide the 11mount you can ulTord to save and 1hc DBS Administration Centre will need tn cnnfinn thAI your rmrmrrl rail of contrtbution within the prescribed limits

Voluntdry contribulions arc deducted through payroll They mus1 be not more than IS per cenl or basic sJlary and other monetary earnings which may be limitdI n 1he case of some postmiddot - I May l 9R9 joincn (see paragrnph (a) on page 5) Contribution~ must be m multirles or pound1 per month or n pclCnltFe of your salary and may be varied from time to ume

Further details which describe this 1u~-efTec1ive savings plan urc av-Jilablc on request from the DBS Administration Centre

Voluntary contribution arrangement (VCA)

Volunlnry contribution~ arc altractive for tholgtC who w ill to increiie the ntircmenc bcncliLS llluilable for thcmscl~ thtir surviYing spouse or dcpmdants up to the limits allowed by the Inland Revenue VCA ~

particulurly mtrJctivc to those who join the Group in mid-career

VCA investments are held scpan1tcly from and the benefits will be paid m addition 10 those outlined in this bookltl

You muy puy volunl1ry contribution~ provided you arc a member of lhc DBS and e1tpecl your DBS and VCA bcncitc to rcmam w11hin l nlnntl Revenue limits You may open a VCA uetounl on the first day or any month

VCA offers a flcitible and ta_it-dlic cnt wdy to 1ncrcisc your retirement benefits been use contributions arc deducted from your curnin1middot~ hltforcbull lax is L--Jlculatcd your 1axJble earnings are reduced and so is your tax liabihty at your hithcst rate

You have the choice of investing your contnbutions in a special deposi t account or through insurdnce companies

Any interest or bonus earned within VCA is tax-free with the exciption or dividends Cllrned on UK equities You have several bltnelil op1ions when considering how to upply your VCA account a l

retirement

4middot

Where ll VCA account is converted into pension at ret irement an annuity rate (or nchangc rdle) s u~ d to determine the level of pcmion th11 ~n be purchased Annuity rat~ CllO nuc1ua1c You may wish to take independent financial ud vicc to determine ir 01her tiu-ltfficient inves1ment vehicles (such as ISAs) may be appropriate to your own personal circumstances

It is up lo you 10 decide the 11mount you can ulTord to save and 1hc DBS Administration Centre will need tn cnnfinn thAI your rmrmrrl rail of contrtbution within the prescribed limits

Voluntdry contribulions arc deducted through payroll They mus1 be not more than IS per cenl or basic sJlary and other monetary earnings which may be limitdI n 1he case of some postmiddot - I May l 9R9 joincn (see paragrnph (a) on page 5) Contribution~ must be m multirles or pound1 per month or n pclCnltFe of your salary and may be varied from time to ume

Further details which describe this 1u~-efTec1ive savings plan urc av-Jilablc on request from the DBS Administration Centre

Appendix 3

12

How the Scheme works The Group contributes to a spccal fund set up 10

provide the benefits of the Scheme The DBS 1~ 1

special ~eclion of the Scheme The benefit~ and ctrcoms1anccs in which they urc payable nrc luid down in the Trust Deed and Rules All the benefits of the Scheme arc paid from this fund The Scheme i tax approved by the Inland Revenue under Chapter I Part XIV of the Income und Corporation Txces Act 1918 The lnlnod Revenue impose certain limits on the benefits lhat may be paid umI the Trustee has lo comply 1Vith 1hcic limils

The Trustee or the Schemr ii 1-ISSC Btnk Penst0n Trus1 (UK) Limited which ha a Board of D1rcc1ors comprising nine dirLClors nominated by HSBC Hank pie anti nine nppoint~d after deemiddotions by the members (eight) and pcnsionen (one) together with a Chairman nominated by HSBC Bank pie

The Tlllitee is legally responsible for munu~middoting and admmstcring the Scheme with the help or independent professional adviser)

The main role of the Trustee i~ to ensure that the DBS is administered in accordance with lhc Trust Deed and Rules It is not the function of lhe Trustee to initiate l-hange to the rules or to negotiate benefits The Trustee supervises the fundmiddots invercmcnb recc1lt1ing report~ from the profe~sional manaFer and i~ responsible for ull linunctal mailers reluteu to the fund

The Trustee publishes usually in July an annw1l report copies of which can he oblaincd from the Secrcrnry 10 the Trustee at HSBC Bunk Pension Trust (U K) Limited 36 Poultry London ECl R 8AJ

Each year members of the DRS r~eive a statement ~etting out their bcncDts under lhc DBS 111

retirement death und on leaving along with a summary of the annual report The publication date~ vary but arc normally in the third quancr euch ycir

An independent actuary monitors the Schlmc every three years and recommends the rate of contributions ncctlcd to maintain the assets at the level nqurrcd to cover the cost of the berxfits and administrnlion expenses Tlte~e con1ribu1ions are defined as a rale of all numbcri pensionable

si larics The Bank determines the 1ontributions pauJ 10 the Scheme in the light of the actuarys recommendation

I

13

The State Pension Scheme

The Slate Peni1ion Scheme is mudc up of lwo parts IshyI The Bllsk Stale Pension

t This is a llat-rate pension paid to all employees with rn ultlequate record or Nutionul lnsurani-c 1--omributions It 1s ncrcasctl each year by the stale

2 The Stare Faming--Relaled Plnltiiori Scheme (SERPS)

This is a complicateltl pension related to your earning which fall between the Slate lower iuld upper earning limits from the tax yeir l 978-79 unti l the tux ~r pror to your S late Pension At e The band earning~middot for euch lu year 11rc then revalued in line with increase in national avera e eimings since the tat yeir concerned und S~ RPS is then buscd on the lolal of thci~e rev-Jlucu hunltl 1Umin~middot

Contracting out

If u companys pension scheme bcneftts ure gooltl enough 11 can middotconlrJct our of SFRPS The DBS is contracted-out as the bcnelib exceed the Reference Scheme Test n middotquality of benefit test set by the Government ln udd1t1on a pension under the DBS is subjccl to II Guaranteed Minimum Pension (GMP) in rcspccl or servic-c prior to 6 April 1997 Whlst you are a member of lhc DBS you will be middotcontrtctctl-outmiddot which means you pay lower National lnsur1nce contributions and do not parlicirate in SERPS

14

Appendix 3 ------- middot-middot-shy

Further information

This book ltt is intended lo prm ide a iteneral guide to the DBS and although every effort has be1n m1de to ensure that the contcnl~ arc accurue ll cannot incluclc every detol

Should there be any discrepancy bctwcxn lhe inlormc1lion in this booklet und the Trust Occxl and Rules the leg11 documents covering the wholt Scheme the Trust Deed ind Rules take prccctlenL-c

Amendment or discontinuance

The Trust Deed provides that HSBC Bank pie bas lhe power lo d1scontmuc the DBS or with the consent o the Trustee to amend it at any lime in the ruture ff your bcnefiis or ri1hts urc afft-cted you will be p1vn wrillcn notice of yuur cnlllhment If the DBS is discontinued the uisetb would be used to provide benefits lo its members in 11ccorduaL-c w th the Trust Deed and Rules

Disposal of your benefits

You ma not sell or give away your benefits under lhe DBS

Data1 Protection Act 1998

The Trustee and the Group have both a legal obliga11on and a legihmate interest to prcxe~s data rclatmg to you or the purpose of admmisienng and opemnng the Sc~mc and paying benefits under it This may include passing on data about you to the Scheme~ actuary auditor administrntor and such other third parties as may be necessary for the adm111istr111on and operation ol the Scheme

The Trustee and Lhe Group arc regarded as Data Controller (for the purposes of the D-11a Protection Act 1998) in rela11on 10 data pr~ing referred to above nnd can be contacted at the address on this page

Internal dispute resolution procedures

From time to 1imc members muy have qucric or concerns about 1hc DBS Gcncmlly these CJn be dch with satsfatorily by lhc DBS Administr111on Ccntn

The DBS docs huvc a forniul intcrnnl procedure fo r the resolution or disputes between scheme lkndiciaritS and the Truslee It is u two-swgc procedure the initial reply to Un) formal compfa1n1

will be made by the HSBC UK Ptnsions Munu~cr (at the addrcs~ shown bdow) who will normally rc~pond within two months of ru~civmg rull Jcluils or the compluint If the mutter is still not resolvcl 10

the persons sttisfaction the Trustee on the persons Jpplicition lo the Secretary to 1he Tru1ce will rccon itler the compluinl Normally the Trustcemiddots decision will be issued within two months

1r ~ou are clisw11i~fieltl with anything 10 do with 1hc

DBS and wa nt 10 make a formal ~omplaint you sl1ould writc to the Sccrc1ary to lht TrustL-e at HSBC Bank pie J6 Poultry London ECR RAJ who wbullII send you a copy of the full procedure together with the rclcv-ml forms

Any questions

This gwde is inlcnifod to provide you with all the information you require about the OBS If you have any further queries please contdcl the DBS Admm1slrdtio11 Centre

I

13

The State Pension Scheme

The Slate Peni1ion Scheme is mudc up of lwo parts IshyI The Bllsk Stale Pension

t This is a llat-rate pension paid to all employees with rn ultlequate record or Nutionul lnsurani-c 1--omributions It 1s ncrcasctl each year by the stale

2 The Stare Faming--Relaled Plnltiiori Scheme (SERPS)

This is a complicateltl pension related to your earning which fall between the Slate lower iuld upper earning limits from the tax yeir l 978-79 unti l the tux ~r pror to your S late Pension At e The band earning~middot for euch lu year 11rc then revalued in line with increase in national avera e eimings since the tat yeir concerned und S~ RPS is then buscd on the lolal of thci~e rev-Jlucu hunltl 1Umin~middot

Contracting out

If u companys pension scheme bcneftts ure gooltl enough 11 can middotconlrJct our of SFRPS The DBS is contracted-out as the bcnelib exceed the Reference Scheme Test n middotquality of benefit test set by the Government ln udd1t1on a pension under the DBS is subjccl to II Guaranteed Minimum Pension (GMP) in rcspccl or servic-c prior to 6 April 1997 Whlst you are a member of lhc DBS you will be middotcontrtctctl-outmiddot which means you pay lower National lnsur1nce contributions and do not parlicirate in SERPS

14

Appendix 3 ------- middot-middot-shy

Further information

This book ltt is intended lo prm ide a iteneral guide to the DBS and although every effort has be1n m1de to ensure that the contcnl~ arc accurue ll cannot incluclc every detol

Should there be any discrepancy bctwcxn lhe inlormc1lion in this booklet und the Trust Occxl and Rules the leg11 documents covering the wholt Scheme the Trust Deed ind Rules take prccctlenL-c

Amendment or discontinuance

The Trust Deed provides that HSBC Bank pie bas lhe power lo d1scontmuc the DBS or with the consent o the Trustee to amend it at any lime in the ruture ff your bcnefiis or ri1hts urc afft-cted you will be p1vn wrillcn notice of yuur cnlllhment If the DBS is discontinued the uisetb would be used to provide benefits lo its members in 11ccorduaL-c w th the Trust Deed and Rules

Disposal of your benefits

You ma not sell or give away your benefits under lhe DBS

Data1 Protection Act 1998

The Trustee and the Group have both a legal obliga11on and a legihmate interest to prcxe~s data rclatmg to you or the purpose of admmisienng and opemnng the Sc~mc and paying benefits under it This may include passing on data about you to the Scheme~ actuary auditor administrntor and such other third parties as may be necessary for the adm111istr111on and operation ol the Scheme

The Trustee and Lhe Group arc regarded as Data Controller (for the purposes of the D-11a Protection Act 1998) in rela11on 10 data pr~ing referred to above nnd can be contacted at the address on this page

Internal dispute resolution procedures

From time to 1imc members muy have qucric or concerns about 1hc DBS Gcncmlly these CJn be dch with satsfatorily by lhc DBS Administr111on Ccntn

The DBS docs huvc a forniul intcrnnl procedure fo r the resolution or disputes between scheme lkndiciaritS and the Truslee It is u two-swgc procedure the initial reply to Un) formal compfa1n1

will be made by the HSBC UK Ptnsions Munu~cr (at the addrcs~ shown bdow) who will normally rc~pond within two months of ru~civmg rull Jcluils or the compluint If the mutter is still not resolvcl 10

the persons sttisfaction the Trustee on the persons Jpplicition lo the Secretary to 1he Tru1ce will rccon itler the compluinl Normally the Trustcemiddots decision will be issued within two months

1r ~ou are clisw11i~fieltl with anything 10 do with 1hc

DBS and wa nt 10 make a formal ~omplaint you sl1ould writc to the Sccrc1ary to lht TrustL-e at HSBC Bank pie J6 Poultry London ECR RAJ who wbullII send you a copy of the full procedure together with the rclcv-ml forms

Any questions

This gwde is inlcnifod to provide you with all the information you require about the OBS If you have any further queries please contdcl the DBS Admm1slrdtio11 Centre

14

Appendix 3 ------- middot-middot-shy

Further information

This book ltt is intended lo prm ide a iteneral guide to the DBS and although every effort has be1n m1de to ensure that the contcnl~ arc accurue ll cannot incluclc every detol

Should there be any discrepancy bctwcxn lhe inlormc1lion in this booklet und the Trust Occxl and Rules the leg11 documents covering the wholt Scheme the Trust Deed ind Rules take prccctlenL-c

Amendment or discontinuance

The Trust Deed provides that HSBC Bank pie bas lhe power lo d1scontmuc the DBS or with the consent o the Trustee to amend it at any lime in the ruture ff your bcnefiis or ri1hts urc afft-cted you will be p1vn wrillcn notice of yuur cnlllhment If the DBS is discontinued the uisetb would be used to provide benefits lo its members in 11ccorduaL-c w th the Trust Deed and Rules

Disposal of your benefits

You ma not sell or give away your benefits under lhe DBS

Data1 Protection Act 1998

The Trustee and the Group have both a legal obliga11on and a legihmate interest to prcxe~s data rclatmg to you or the purpose of admmisienng and opemnng the Sc~mc and paying benefits under it This may include passing on data about you to the Scheme~ actuary auditor administrntor and such other third parties as may be necessary for the adm111istr111on and operation ol the Scheme

The Trustee and Lhe Group arc regarded as Data Controller (for the purposes of the D-11a Protection Act 1998) in rela11on 10 data pr~ing referred to above nnd can be contacted at the address on this page

Internal dispute resolution procedures

From time to 1imc members muy have qucric or concerns about 1hc DBS Gcncmlly these CJn be dch with satsfatorily by lhc DBS Administr111on Ccntn

The DBS docs huvc a forniul intcrnnl procedure fo r the resolution or disputes between scheme lkndiciaritS and the Truslee It is u two-swgc procedure the initial reply to Un) formal compfa1n1

will be made by the HSBC UK Ptnsions Munu~cr (at the addrcs~ shown bdow) who will normally rc~pond within two months of ru~civmg rull Jcluils or the compluint If the mutter is still not resolvcl 10

the persons sttisfaction the Trustee on the persons Jpplicition lo the Secretary to 1he Tru1ce will rccon itler the compluinl Normally the Trustcemiddots decision will be issued within two months

1r ~ou are clisw11i~fieltl with anything 10 do with 1hc

DBS and wa nt 10 make a formal ~omplaint you sl1ould writc to the Sccrc1ary to lht TrustL-e at HSBC Bank pie J6 Poultry London ECR RAJ who wbullII send you a copy of the full procedure together with the rclcv-ml forms

Any questions

This gwde is inlcnifod to provide you with all the information you require about the OBS If you have any further queries please contdcl the DBS Admm1slrdtio11 Centre

___ __________ A1Q_endix 3middot---~-

I 15

l

I

External bodies

The followmt out~1dc boltlic m1y he able lo hdp

Pension ScUnlt Rltmiddot~i trJ The RerLtry igt a centrul agency which hel~ individuals to keep track o f bencfils in prcVJous employersmiddot pcn ion schemes lnformution about 1hc Schemt (including the addres~ al which the Trustee may be contacled) has been given lo the Rei1strdr whose addros is

PO Box INN Newcastle-upon-Tyne NE99 l NN I

i Ocmiddotmiddot11pa1icmlt1I Pe1bt0tts AltMte1ry Strllft ( OPfSJ OPAS is 11v1lil11bk 111 uny lime 10 U$gtiSI members und

J benefici11ricgt of occupallonal pension schemes wirh tny pcM1oni query they may have or any difficulty that they have been unc1ble to resolve with the Tru_treor admirlSlrtlors OPAS can be cont1c1ctl at

l I Belgrave Road London SW l V I RB

Pe11sie111T Omhutlrmw for problem thal cannot be- settled through OPAS you m11y appeal to he Pensions Ombudsman who ha the power 10 inves1i1mte and settle complainI or disputes of fact or law in relat ion lo occupalionnl pension schemes The Ombudsman can be conractcd at he same address as OPAS

01middotcmiddotupuriu11u 111iar Rel11larury Aurhttrlty ( OP RAJ OPRA has been set up by the Government to intervene in he running of pension schemes where trustees employers or professional advisers have failed in their dutiti QPR A may be contacted at

1 lnvicta House Trtfalgar Placc Brighton East Sussex BN I 4DW

Appendix 3

The HSBC Bank (UK Pension Scheme Defined Benefit Scheme

Nonination of Specified Dependant

u~c this form to inform the Trustee of )1lur w1shc for the payment of t ltlcpcndants pension in the event of your

dcuth whc11bull yuu tlo not lcuvc u survMnc spouse a term dcmiddot1ncd in the Dltmiddotiinctl Benefit Scheme bookie

To 1-lSBC Bank Pcn~ion Trust (UKl Limited (The Trust~)

I I (pleJse msert full name in block cnpiluls)

um n member nf the DRS section or the HSBC Bank (UK) Pension Scheme (lhe Schememiddot) l have rtml uml

11nders100~ the cxplunation of the sp1-cifietl llepemlttnt op11on ovcrlcuf I now nominate thi followin~ person to l)( my

srt-cilicd dcpcndunt for the purposes or the Schtgtmc

Name Date of birth

ddress

2 bull I um not married OR bull I am married but dCI not live with my husband or wife OR

bull I am a dcfcmd pcn~1omr (and my pension hus not started mvJ ut the ltlate I lefl service I wis not married

3 (a) The person named in I quulifies for nomination as my ~pccitieltl dcpcnltlunl because of the

following cinumstances

(o) Duration of relationship

4 I understand chat

bull A ltlependants pension is puyable ut the absolmc discretion or the Trush-e and HSBC Bank pie

bull tf they decide to award a dependants pension this nomination is not binding an them

bull They must be 8alisfod (if they wL~h 10 consiuer my specified dcpcndun1) thtt my specified cJepenltlant

is financially dependant on me n the date of my death

bull This nomination will only have effect if I die without leaving a spouse who qunlitks for a spousc middots

pension (apurl from u pension 10 meet the comracting--0ut nquircmcnls only)

5 I understand that I may revoke this nomination u1 uny time by giving wrinen notice to the Trusc~ (with or without

replacing it with another nomination)

6 l conStnt for the purposes or the Dita Protection Act 1998 to the uhoc information being held anltl processeltl by

1hc Trustee

Signed Dale

---Append ix 3 ____

SplClficd dcpcndaol

In the event or the death of an ictive or pensionemiddot membr of the DBS a pension L~ puyublc to the survivintt spouse

TI1is rnc-cins your husband or wife al the date of death on the condltiun that you arc living IOl_cthcr for 1-ltmploy1-c~

who have not drnwn their pension the dclintion ts slirhtly dilferem in that the surivmg spouse mus1 have been

married uml ltv ng wilh a member bolh al lcuvni service ind ut the ua1c or ucath

In chc event hut you die and do nor leave a person who qualities as a surviving spouse then HSBC Bank pie and 1hc

Trustee have the d1scnL1on lo pay m allowance 10 a person who is financially dependent on you ii the dale or death

Such a person 1s known lLi your middot~pecified dependunt It Joe~ not 1man someone who is actuolly linancbulltlly dcpcn1ltn1

al the date of dcalh but 1Un be extended 10 iniludc someone who i~ financially intenhpemlcnt upon you ee- where the

person relied upon tt second income 10 main win 1he ~tindard of livmg which t ltlepenltlenl 011 a jo1111 1mome before the

date of dcith In the case of ll person who is scparutcd from his or her srouse or an ex-employee in thi above

circumstances ic L-Un includt the ~pousc at the ltlute or death

If you would li~e lo nominate someone for HSBC Bunk pk anti the Trustee lo consiltlir please complete the form oYCrleaf

If you have 11ny questions about whether you CdO nominate somebody or the pcr-ons who ~an be cooidcrcd tor

nomination pcu-e contdct the DBS Administruion Centre at the address shown in the bookle1

Completed fonns shnutd he sent lo the Titc DBS Admm tmion Centre HSBC Bunk plc J6 Poultry London EClR RAJ

Please note the following two points

Contracting out

As the DBS has contracted-out of the State Earnmgs-Reatcd Pcmion Scheme the DBS mu~l piy cenain minimum

benefits lo a lei 11I spouse even i i heshe is not rcsidcnt with lhr member at death or marned I n the member after

lc-ivin e serv1CC If such pensions 11re rnquired any pension piy-Jhlc to J dependant will be rcdmCll accvrdin jly

Childrens J)(flSions

Please note chat the Rules of the Scheme already provide a childrens allowance for dependent children under the age of

18 (or 21 if in full-ti me education) which doubles 111 lhe ewnt of then lxmg no spousemiddot~ pcnion or depcnda111middots

allowance payable Consequently if you arc 110 married hut htve d1ildrco the grinting or i dcpcndlt1nts allowincc would polcntially reduce any penson payable to such quaht mg children

Appendix 3 --- -~ f 1

I The HSBC Bank (UK) Pension Scheme

Defined Benefit Scheme Expression of Wishforn

Plc1sc uS- block lcltcrs throughout

StalT No

full numc

Brunch und sort code

or dcpurtmcnt

and loct1tion

Dt-claration

l understand that this rc4ucst is not binding on the Trustee In thi event of my dcuth I would like the Trustee to

con~idcr muking paymenl of lump sum death benefits and any repayments uf additional conuibutions due under the

Rules of the Scheme to the followlng

bull

1

Address(cs) Relationship 10 me Prorortion

middotcan imludc o person chunty club or socie1y

This form cancels any previously submitted express on of my wishes I undtNitntl lhdl 1t is autom1lically revoked by

murr all but not necessarily by divorce

l consent for the purpo~~ of the Dal1 Protection Act 1998 to the above nform1uioo bcmg held and procc_~scd by

lhc Trus1ee

Signedmiddot

Date

After completion this form should be sent to The DBS Admimstration Cenrr~ HSBC Bank pie 36 Poultry London

EC2R 8AJ

(Su ttl~o notes ovcrleul)

Append ix 3

NollS

I You may enter the numc of more than one person unltl the share you wi h each to htmiddotc if you would like the Trustt-c

lo comidcr more than one htneliciary

2 If you have madi a Will selling out your wishes regarding the disposul uf your e~1atc you may use this form 10

induatc lh11t you would like he Trustee to consider following the terms of your Will

3 In the event of any chungcs in your circumswnL-es it 1s your resrnnihility lo cnsun th111 any chunge in your wishes is made kn0-11 by subm11ting a fu rther form or by giving notice of canccllution of the nominntion

4 To cn~urc that lh Trustee is able to contact the pcrson(s) named in thi~ form you should also notify changes in the strictest conlidcncc

5 It is nut necessary to complete this form if you wish your wife or husband 10 be the sole beneficiary

Append ix 3

Appendix 3

The HSBC Bank (UK Pension Scheme Defined Benefit Scheme

Nonination of Specified Dependant

u~c this form to inform the Trustee of )1lur w1shc for the payment of t ltlcpcndants pension in the event of your

dcuth whc11bull yuu tlo not lcuvc u survMnc spouse a term dcmiddot1ncd in the Dltmiddotiinctl Benefit Scheme bookie

To 1-lSBC Bank Pcn~ion Trust (UKl Limited (The Trust~)

I I (pleJse msert full name in block cnpiluls)

um n member nf the DRS section or the HSBC Bank (UK) Pension Scheme (lhe Schememiddot) l have rtml uml

11nders100~ the cxplunation of the sp1-cifietl llepemlttnt op11on ovcrlcuf I now nominate thi followin~ person to l)( my

srt-cilicd dcpcndunt for the purposes or the Schtgtmc

Name Date of birth

ddress

2 bull I um not married OR bull I am married but dCI not live with my husband or wife OR

bull I am a dcfcmd pcn~1omr (and my pension hus not started mvJ ut the ltlate I lefl service I wis not married

3 (a) The person named in I quulifies for nomination as my ~pccitieltl dcpcnltlunl because of the

following cinumstances

(o) Duration of relationship

4 I understand chat

bull A ltlependants pension is puyable ut the absolmc discretion or the Trush-e and HSBC Bank pie

bull tf they decide to award a dependants pension this nomination is not binding an them

bull They must be 8alisfod (if they wL~h 10 consiuer my specified dcpcndun1) thtt my specified cJepenltlant

is financially dependant on me n the date of my death

bull This nomination will only have effect if I die without leaving a spouse who qunlitks for a spousc middots

pension (apurl from u pension 10 meet the comracting--0ut nquircmcnls only)

5 I understand that I may revoke this nomination u1 uny time by giving wrinen notice to the Trusc~ (with or without

replacing it with another nomination)

6 l conStnt for the purposes or the Dita Protection Act 1998 to the uhoc information being held anltl processeltl by

1hc Trustee

Signed Dale

---Append ix 3 ____

SplClficd dcpcndaol

In the event or the death of an ictive or pensionemiddot membr of the DBS a pension L~ puyublc to the survivintt spouse

TI1is rnc-cins your husband or wife al the date of death on the condltiun that you arc living IOl_cthcr for 1-ltmploy1-c~

who have not drnwn their pension the dclintion ts slirhtly dilferem in that the surivmg spouse mus1 have been

married uml ltv ng wilh a member bolh al lcuvni service ind ut the ua1c or ucath

In chc event hut you die and do nor leave a person who qualities as a surviving spouse then HSBC Bank pie and 1hc

Trustee have the d1scnL1on lo pay m allowance 10 a person who is financially dependent on you ii the dale or death

Such a person 1s known lLi your middot~pecified dependunt It Joe~ not 1man someone who is actuolly linancbulltlly dcpcn1ltn1

al the date of dcalh but 1Un be extended 10 iniludc someone who i~ financially intenhpemlcnt upon you ee- where the

person relied upon tt second income 10 main win 1he ~tindard of livmg which t ltlepenltlenl 011 a jo1111 1mome before the

date of dcith In the case of ll person who is scparutcd from his or her srouse or an ex-employee in thi above

circumstances ic L-Un includt the ~pousc at the ltlute or death

If you would li~e lo nominate someone for HSBC Bunk pk anti the Trustee lo consiltlir please complete the form oYCrleaf

If you have 11ny questions about whether you CdO nominate somebody or the pcr-ons who ~an be cooidcrcd tor

nomination pcu-e contdct the DBS Administruion Centre at the address shown in the bookle1

Completed fonns shnutd he sent lo the Titc DBS Admm tmion Centre HSBC Bunk plc J6 Poultry London EClR RAJ

Please note the following two points

Contracting out

As the DBS has contracted-out of the State Earnmgs-Reatcd Pcmion Scheme the DBS mu~l piy cenain minimum

benefits lo a lei 11I spouse even i i heshe is not rcsidcnt with lhr member at death or marned I n the member after

lc-ivin e serv1CC If such pensions 11re rnquired any pension piy-Jhlc to J dependant will be rcdmCll accvrdin jly

Childrens J)(flSions

Please note chat the Rules of the Scheme already provide a childrens allowance for dependent children under the age of

18 (or 21 if in full-ti me education) which doubles 111 lhe ewnt of then lxmg no spousemiddot~ pcnion or depcnda111middots

allowance payable Consequently if you arc 110 married hut htve d1ildrco the grinting or i dcpcndlt1nts allowincc would polcntially reduce any penson payable to such quaht mg children

Appendix 3 --- -~ f 1

I The HSBC Bank (UK) Pension Scheme

Defined Benefit Scheme Expression of Wishforn

Plc1sc uS- block lcltcrs throughout

StalT No

full numc

Brunch und sort code

or dcpurtmcnt

and loct1tion

Dt-claration

l understand that this rc4ucst is not binding on the Trustee In thi event of my dcuth I would like the Trustee to

con~idcr muking paymenl of lump sum death benefits and any repayments uf additional conuibutions due under the

Rules of the Scheme to the followlng

bull

1

Address(cs) Relationship 10 me Prorortion

middotcan imludc o person chunty club or socie1y

This form cancels any previously submitted express on of my wishes I undtNitntl lhdl 1t is autom1lically revoked by

murr all but not necessarily by divorce

l consent for the purpo~~ of the Dal1 Protection Act 1998 to the above nform1uioo bcmg held and procc_~scd by

lhc Trus1ee

Signedmiddot

Date

After completion this form should be sent to The DBS Admimstration Cenrr~ HSBC Bank pie 36 Poultry London

EC2R 8AJ

(Su ttl~o notes ovcrleul)

Append ix 3

NollS

I You may enter the numc of more than one person unltl the share you wi h each to htmiddotc if you would like the Trustt-c

lo comidcr more than one htneliciary

2 If you have madi a Will selling out your wishes regarding the disposul uf your e~1atc you may use this form 10

induatc lh11t you would like he Trustee to consider following the terms of your Will

3 In the event of any chungcs in your circumswnL-es it 1s your resrnnihility lo cnsun th111 any chunge in your wishes is made kn0-11 by subm11ting a fu rther form or by giving notice of canccllution of the nominntion

4 To cn~urc that lh Trustee is able to contact the pcrson(s) named in thi~ form you should also notify changes in the strictest conlidcncc

5 It is nut necessary to complete this form if you wish your wife or husband 10 be the sole beneficiary

Append ix 3

---Append ix 3 ____

SplClficd dcpcndaol

In the event or the death of an ictive or pensionemiddot membr of the DBS a pension L~ puyublc to the survivintt spouse

TI1is rnc-cins your husband or wife al the date of death on the condltiun that you arc living IOl_cthcr for 1-ltmploy1-c~

who have not drnwn their pension the dclintion ts slirhtly dilferem in that the surivmg spouse mus1 have been

married uml ltv ng wilh a member bolh al lcuvni service ind ut the ua1c or ucath

In chc event hut you die and do nor leave a person who qualities as a surviving spouse then HSBC Bank pie and 1hc

Trustee have the d1scnL1on lo pay m allowance 10 a person who is financially dependent on you ii the dale or death

Such a person 1s known lLi your middot~pecified dependunt It Joe~ not 1man someone who is actuolly linancbulltlly dcpcn1ltn1

al the date of dcalh but 1Un be extended 10 iniludc someone who i~ financially intenhpemlcnt upon you ee- where the

person relied upon tt second income 10 main win 1he ~tindard of livmg which t ltlepenltlenl 011 a jo1111 1mome before the

date of dcith In the case of ll person who is scparutcd from his or her srouse or an ex-employee in thi above

circumstances ic L-Un includt the ~pousc at the ltlute or death

If you would li~e lo nominate someone for HSBC Bunk pk anti the Trustee lo consiltlir please complete the form oYCrleaf

If you have 11ny questions about whether you CdO nominate somebody or the pcr-ons who ~an be cooidcrcd tor

nomination pcu-e contdct the DBS Administruion Centre at the address shown in the bookle1

Completed fonns shnutd he sent lo the Titc DBS Admm tmion Centre HSBC Bunk plc J6 Poultry London EClR RAJ

Please note the following two points

Contracting out

As the DBS has contracted-out of the State Earnmgs-Reatcd Pcmion Scheme the DBS mu~l piy cenain minimum

benefits lo a lei 11I spouse even i i heshe is not rcsidcnt with lhr member at death or marned I n the member after

lc-ivin e serv1CC If such pensions 11re rnquired any pension piy-Jhlc to J dependant will be rcdmCll accvrdin jly

Childrens J)(flSions

Please note chat the Rules of the Scheme already provide a childrens allowance for dependent children under the age of

18 (or 21 if in full-ti me education) which doubles 111 lhe ewnt of then lxmg no spousemiddot~ pcnion or depcnda111middots

allowance payable Consequently if you arc 110 married hut htve d1ildrco the grinting or i dcpcndlt1nts allowincc would polcntially reduce any penson payable to such quaht mg children

Appendix 3 --- -~ f 1

I The HSBC Bank (UK) Pension Scheme

Defined Benefit Scheme Expression of Wishforn

Plc1sc uS- block lcltcrs throughout

StalT No

full numc

Brunch und sort code

or dcpurtmcnt

and loct1tion

Dt-claration

l understand that this rc4ucst is not binding on the Trustee In thi event of my dcuth I would like the Trustee to

con~idcr muking paymenl of lump sum death benefits and any repayments uf additional conuibutions due under the

Rules of the Scheme to the followlng

bull

1

Address(cs) Relationship 10 me Prorortion

middotcan imludc o person chunty club or socie1y

This form cancels any previously submitted express on of my wishes I undtNitntl lhdl 1t is autom1lically revoked by

murr all but not necessarily by divorce

l consent for the purpo~~ of the Dal1 Protection Act 1998 to the above nform1uioo bcmg held and procc_~scd by

lhc Trus1ee

Signedmiddot

Date

After completion this form should be sent to The DBS Admimstration Cenrr~ HSBC Bank pie 36 Poultry London

EC2R 8AJ

(Su ttl~o notes ovcrleul)

Append ix 3

NollS

I You may enter the numc of more than one person unltl the share you wi h each to htmiddotc if you would like the Trustt-c

lo comidcr more than one htneliciary

2 If you have madi a Will selling out your wishes regarding the disposul uf your e~1atc you may use this form 10

induatc lh11t you would like he Trustee to consider following the terms of your Will

3 In the event of any chungcs in your circumswnL-es it 1s your resrnnihility lo cnsun th111 any chunge in your wishes is made kn0-11 by subm11ting a fu rther form or by giving notice of canccllution of the nominntion

4 To cn~urc that lh Trustee is able to contact the pcrson(s) named in thi~ form you should also notify changes in the strictest conlidcncc

5 It is nut necessary to complete this form if you wish your wife or husband 10 be the sole beneficiary

Append ix 3

Appendix 3 --- -~ f 1

I The HSBC Bank (UK) Pension Scheme

Defined Benefit Scheme Expression of Wishforn

Plc1sc uS- block lcltcrs throughout

StalT No

full numc

Brunch und sort code

or dcpurtmcnt

and loct1tion

Dt-claration

l understand that this rc4ucst is not binding on the Trustee In thi event of my dcuth I would like the Trustee to

con~idcr muking paymenl of lump sum death benefits and any repayments uf additional conuibutions due under the

Rules of the Scheme to the followlng

bull

1

Address(cs) Relationship 10 me Prorortion

middotcan imludc o person chunty club or socie1y

This form cancels any previously submitted express on of my wishes I undtNitntl lhdl 1t is autom1lically revoked by

murr all but not necessarily by divorce

l consent for the purpo~~ of the Dal1 Protection Act 1998 to the above nform1uioo bcmg held and procc_~scd by

lhc Trus1ee

Signedmiddot

Date

After completion this form should be sent to The DBS Admimstration Cenrr~ HSBC Bank pie 36 Poultry London

EC2R 8AJ

(Su ttl~o notes ovcrleul)

Append ix 3

NollS

I You may enter the numc of more than one person unltl the share you wi h each to htmiddotc if you would like the Trustt-c

lo comidcr more than one htneliciary

2 If you have madi a Will selling out your wishes regarding the disposul uf your e~1atc you may use this form 10

induatc lh11t you would like he Trustee to consider following the terms of your Will

3 In the event of any chungcs in your circumswnL-es it 1s your resrnnihility lo cnsun th111 any chunge in your wishes is made kn0-11 by subm11ting a fu rther form or by giving notice of canccllution of the nominntion

4 To cn~urc that lh Trustee is able to contact the pcrson(s) named in thi~ form you should also notify changes in the strictest conlidcncc

5 It is nut necessary to complete this form if you wish your wife or husband 10 be the sole beneficiary

Append ix 3

Append ix 3

NollS

I You may enter the numc of more than one person unltl the share you wi h each to htmiddotc if you would like the Trustt-c

lo comidcr more than one htneliciary

2 If you have madi a Will selling out your wishes regarding the disposul uf your e~1atc you may use this form 10

induatc lh11t you would like he Trustee to consider following the terms of your Will

3 In the event of any chungcs in your circumswnL-es it 1s your resrnnihility lo cnsun th111 any chunge in your wishes is made kn0-11 by subm11ting a fu rther form or by giving notice of canccllution of the nominntion

4 To cn~urc that lh Trustee is able to contact the pcrson(s) named in thi~ form you should also notify changes in the strictest conlidcncc

5 It is nut necessary to complete this form if you wish your wife or husband 10 be the sole beneficiary

Append ix 3

Append ix 3