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Pension Benefits Recommendation

INSTRUCTION TO USER – The following section has been designed for inclusion within a report generated by the PPOL Suitability Report Builder. In the first instance, you will need to use the PPOL Report Builder to create a report including an Introduction section and at least one Pension Review Recommendation section and any other required sections in the usual way. Once you have downloaded the report created via PPOL to Word, simply insert (copy and paste) this section into your report after the Pension Review Recommendation section and before any new recommendation sections. The accompanying specific Risk Warnings are also attached for inclusion within the Appendix.

The text has been colour coded to aid with your understanding. Where the text is highlighted in blue this tends to suggest that the text may not be appropriate in all instances and you may need to delete some or all of it. Where the text is highlighted in red, this will require your input.

I have recommended that you draw benefits from the pension arrangements highlighted in the earlier review section. A summary of all of the options available to you can be found in the Appendix of this report.

Your Needs and Objectives

Pension Commencement Lump Sum

An individual can take up to 25% of a pension fund as a Pension Commencement Lump Sum (tax free cash payment) irrespective of the type of pension they hold. Although it is possible that a member of an occupational pension scheme may have "protected" their entitlement to a Pension Commencement Lump Sum payment in excess of 25% prior to A Day.

<SELECT PREFERRED WORDING OR ADD YOUR OWN>

You wish to take the maximum Pension Commencement Lump Sum payment. The maximum you are entitled to at this time is <£INSERT>.

I understand you do not require the maximum pension commencement lump sum payment of <£INSERT> to be paid at this time, and have stated an amount of <£INSERT> would be sufficient to meet your immediate needs and objectives

I understand you have no further pension commencement lump sum entitlement from your existing schemes.

I understand you require the Pension Commencement Lump Sum because:

It has been earmarked for immediate capital expenditure as highlighted in the Introduction Section of this report

It has been earmarked for debt repayment It has been earmarked to pay off your mortgage Your income requirements can be met without using your entire pension fund You like the idea of having the flexibility to access the tax free cash as required, as opposed

to losing access once the recommended retirement vehicle has been established

You require an additional flexible lump sum which can be used to supplement your short term capital expenditure and income requirements

Your existing secured pension income fulfils the current minimum income requirements under ‘flexible drawdown’ legislation and as such you wish to exercise your right to strip out the maximum available monies from your remaining pension(s)

<INSERT ADDITIONAL REASONS HERE>

I confirm we have discussed alternative ways of raising this capital and the implications of accessing your pension fund now as opposed to delaying in favour of the potential to receive greater benefits later in retirement. In simple terms, this is because the sooner you start to draw benefits the greater the likelihood that your pension fund will be eroded later in life.

Income Requirements


You have stated that you do not require a fixed guaranteed regular income for the rest of your life, and would prefer a flexible income stream which can be altered to reflect your future circumstances and requirements.

You have stated that you do not require a regular income at this time, preferring to take the entire remaining pension fund(s) as a one off lump sum payment.

You have stated that you do not require a regular income at this time, preferring to take an unrestricted lump sum payment as income as and when required.

You have stated that you have sufficient income from other sources. As such you do not require any additional income at this time. However, you do not wish to expose your remaining pension fund(s) to investment risk or on-going charges and wish to withdraw <£INSERT> as an unrestricted lump sum immediately.

Flexible - Drawdown Pension Recommendation

<SELECT PREFERRED WORDING>

I have recommended that you transfer your existing un-crystallized pension benefits into a flexible drawdown pension for the following reasons:

I have recommended that you transfer your existing crystallized pension benefits already in drawdown to an alternative drawdown pension for the following reasons:

Your current secured pension income already meets the minimum income requirement of £20,000 p.a. entitling you use flexible drawdown

You have no intention of making any further tax relievable pension contributions You have already declared your current pension income sources are sufficient to allow for

flexible drawdown You are not accruing any other occupational scheme benefits Your existing pension drawdown provider will not allow ‘flexible income’ drawdown

required to fulfil your pension income requirements This retirement option most accurately reflects your needs, objectives and attitude to risk

You are comfortable taking risks with your residual pension fund rather than using it to secure a guaranteed income

It provides the potential for the residual fund to continue to benefit from tax efficient growth

Your combined tax free and taxable lump sum entitlement will be sufficient to match your immediate spending requirements as set out earlier in this report

Your tax free cash entitlement can be taken as a lump sum payment at outset as per your stated objectives

Your income entitlement can be taken as a taxable lump sum as per your stated objectives You wish to increase your income by <£INSERT> in line with the higher rate income tax

threshold Your current income circumstances dictate that you do not need to restrict your pension

fund withdrawals under capped drawdown It provides the necessary flexibility to tailor unrestricted income withdrawals to suit your

needs and circumstances and other sources of income, and in turn assist in future tax planning

It still provides you with greater control over the timing of any future annuity purchase should you choose to do so

It will provide the potential for greater death benefits following the withdrawal of your remaining pension fund(s) which will no longer be subject to pensions legislation

You will not have to lock your pension into current annuity rates You will not have to make any decision regarding spouse, dependent, or other retirement

benefits Because you already have a secured pension income in excess of £20,000 per annum, I

believe this retirement option is a viable and beneficial option in view of your circumstances and objectives


When selecting the most appropriate provider to meet a client’s individual needs and circumstances there are a number of issues to be considered:

Flexibility

Not all providers are able to satisfy your present income and or lump sum requirements and as such it is important to match the provider to your individual needs and objectives.

Investment Options and Performance

There is obviously no means to categorically predict future investment performance. Although it should be stressed that past performance is no guarantee of future performance, it can act as a useful guide. It is also beneficial to compare the range of investment options available. Flexibility to switch between a wide range of strong performing investment opportunities is important. Your attitude to risk could change and as a result you may wish to take an alternative investment strategy in the future.

Financial Strength

It is imperative to select a provider who is financially secure and will be able to meet all of their obligations to policyholders in the future.

Charging Structure

The effect of charges is typically reflected in the reduction in yield of the selected pension.


No comparison of charges or benefits is applicable as you are taking all remaining benefits as a lump sum income payment and as such the pension plan will end. All associated charges specific to this retirement option are however set out below:

No comparison of charges or benefits is applicable as your existing pension provider cannot accommodate flexible drawdown and as such no like for like comparison to the recommended provider is available. All associated charges specific to this retirement option are however set out below:

The reduction in yield outlined in the illustration(s) provided includes deductions for expenses, adviser remuneration and other adjustments. For further information concerning charges I refer you to the illustration and Key Features Document provided.

<CHOOSE PREFERRED CHARGING TABLE(S) & WORDING>

The charges of your existing pension compared to those of the proposed alternative contract are detailed below:

Existing Pension

Company Policy Number Initial ChargesAnnual Investment

Management Charges

Annual Contract Charges Other Charges

<THE TABLE BELOW IS THE STANDARDISED VERSION POST RDR>

Entry Ongoing Event Exit

Proposed Alternative

Initial Charges Annual Investment Management Charges Annual Contract Charges Other Charges

The charges for the recommended flexible drawdown retirement option are detailed below:

Proposed Scheme

Initial Charges Other Charges

<THE TABLE BELOW IS THE STANDARDISED VERSION POST RDR>

Entry Ongoing Event Exit

Projected Benefits

Please find below a comparison of the benefits you could receive from your existing pension and the proposed alternative. The projected fund values assume an annual investment growth of 7% and are included for illustrative purposes only and cannot be guaranteed.

Existing Pension

Company Policy Number

Tax Free Lump Sum

Maximum Annual Income

Death Benefits

Projected Fund Value at 75

Reduction in Yield*

Proposed Alternative

Tax Free Lump Sum Maximum Annual Income Death Benefits Projected Fund

Value at 75 Reduction in Yield*

Unrestricted

* The lower the Reduction in Yield the lower the plan charges.

Summary of Recommendation

I have recommended the following ‘Flexible’ drawdown pension plan for the reasons highlighted below:

Ownership Company Net Fund Value

<INSERT SPECIFIC PROVIDER INFO HERE> They are a market leader in the pension drawdown market place They allow both flexible and capped drawdown, which is not offered by all pension providers They will accept the transfer of existing drawdown pensions arrangements into their plan The charging structure of the recommended plan is competitive when compared to similar

products in the market place The charging structure for this specific retirement option is commensurate for the benefit

being received Although the charges of the recommended plan are higher, I believe the investment strategy

I have recommended and the greater investment opportunities available under the new plan will provide superior net returns on the residual fund(s) over the remaining term of investment

Although the charges are higher, these will not be on-going charges, as following the withdrawal of your pension fund in full the plan will end

I believe the additional features and enhanced flexibility associated with the recommended arrangement in meeting your income needs more than compensates for any additional charge(s)

They offer a rebate to the annual management charge when your residual fund reaches a predefined size. I refer you to the illustration for further information

The research tool I have used to review the market place identified them as the most suitable and competitive solution for your needs and objectives

They have provided us and our clients with an excellent service in the past They provide access to a wide range of investment opportunities, making it simple to vary

your investment strategy to reflect changing market conditions or your income requirements or should your risk profile change in the future

They provide access to a number of world-leading fund managers and investment houses. This not only provides greater scope to create a bespoke portfolio tailored to your individual risk profile and objectives; but the resultant diversification will also diminish the associated investment risk

It is possible to switch the underlying funds of this investment free of charge They provide access to a range of model investment portfolios They provide access to discretionary fund management They provide the facility to manage your investment online. Providing access to instant

valuations, fund information and other investment analysis tools They offer a SIPP facility, the benefits of which is that you will not be limited to the

investment choice of only one provider. A SIPP is in effect a wrapper, which can contain any investment approved by HM Revenue & Customs for pension purposes. SIPP’s are invariably complicated to administer; as such it is important that the company is well resourced and modern in systems to ensure the policy is dealt with efficiently

Income Benefits

On 6th April 2011 the Government introduced a new retirement framework of Capped and Flexible Income Drawdown, both of which can be used for retirement planning with guarantees. The income limits within this framework were subsequently amended with effect from 26 th March 2013.

Ordinarily there are limits on the maximum income you can take under a Capped Drawdown plan set by Government Actuary Department Rates. However, under a Flexible Drawdown plan there is no limit on the amount of income you can take in any year. You can tailor your drawdown pension to suit your personal requirements whether taking regular amounts at a set frequency or ad hoc income when required. Flexible Income is available from age 55 provided you can satisfy a Minimum Income Requirement (MIR) presently £20,000 per annum. Once an individual has self-certified that they meet the MIR, the upper limit for income is removed.

You have specified a target gross income of <£INSERT> per annum / as a lump sum

<INCLUDE IF CLIENT ALREADY IN DRAWDOWN>

The income limits that currently apply to your ceding drawdown pension fund are detailed below.

Maximum Income Minimum Income Comparable Annuity Critical Yield A at 75 Critical Yield B at 75

£. £ £ % or N/A % or N/A

Following transfer to the proposed provider, this income limit will be removed.

For comparison purposes I have also included details of the guaranteed income you could receive if you were to use your fund to purchase a conventional annuity at this time. This is <£INSERT> per annum. I refer you to the illustration provided for further information on the basis used to derive the illustrated annuity income.

The Critical Yield ‘A’ is the rate of investment return required to break-even with the comparable annuity. The greater the level of income you plan to withdraw the more significant this figure is. Included within the critical yield is a provision for mortality drag. Mortality drag refers to the loss of the cross-subsidy which would have been gained on entering the annuity pool. In effect individuals who die early leave their funds to be used by individuals who live longer.

The Critical Yield ‘B’ is the average annual return required to ensure that your pension fund will be sufficient for an annuity to provide a comparable income as the withdrawals you have elected to draw at this time.

Please be aware that taking a high level of income may erode the capital value of the underlying fund, especially if investment returns are poor. Ultimately this could result in a lower income if an annuity is eventually purchased. You should also be aware that if you elect to take a high level of income, this may not be sustainable over the life of this contract.

You are fully aware of the effects on your residual fund of your chosen unrestricted income withdrawal amount. However this is not deemed important as you will likely choose to exhaust your pension fund completely at a future point in time.

Investment Strategy

<USE FOLLOWING WORDING ONLY IF THE ENTIRE PENSION FUND IS BEING DRAWN DOWN>

Because your entire pension fund will be withdrawn under ‘Flexible’ drawdown rules, there is no need for an investment strategy recommendation. As such, for the immediate to very short term, all ceding scheme investments will be sold to cash and all benefits on receipt into the receiving scheme will also be held in a cash fund.

<USE IF RECOMMENDING MODEL PORTFOLIOS>

Different types of assets such as equities, property or bonds behave in different ways. The first step in forming any investment strategy is to achieve the right balance between major asset classes. This asset allocation is fundamental to meeting your investment goals in the medium to long term.

Model portfolios offer a clearly defined risk and return against an appropriate benchmark. Making use of the resources and expertise of investment professionals, they combine asset allocation with fund selection to create a range of model portfolios. They consider the historic rates of return of different asset classes over long periods of time to create a portfolio of investments to reflect an individual’s attitude to risk and investment objectives.

In view of your circumstances, I have recommended that the residual pension fund monies be invested as follows:

Portfolio Name Portfolio Objective Risk Rating Allocation

I have recommended the above for the following reasons:

It reflects your stated risk profile and investment objectives It reflects your likely need for further retirement benefits and investment time horizon The portfolio provider has significant experience and expertise in providing model portfolio

solutions The portfolio(s) can meet with your growth and income requirements The provider of the portfolios automatically includes an expert research and fund selection

process with built in robust risk controls The portfolios have performed well when compared to their sector targets and benchmark The portfolios are proactively reviewed and rebalanced on a regular basis to reflect changes

in market conditions and the agreed attitude to risk The portfolios offer a low cost fully passive managed approach to investment strategy in line

with your wishes The portfolios offer a fully actively managed approach to investment strategy in line with

your wishes The portfolios offer a combined passive approach with actively managed tactical asset

allocation in line with your wishes <INSERT ADDITIONAL REASONS HERE>

I recommend that you contact me regularly (unless other servicing arrangements have been agreed) to review the performance of this drawdown pension plan investment strategy and continued suitability to the recommended Model Portfolio(s).

Further information concerning the past performance of the recommended investment strategy can be found in the section entitled Investment Fund / Portfolio Information at the back of this report.

<USE IF RECOMMENDING A DFM>

Discretionary Fund Management ensures the underlying assets of the portfolio are invested in accordance with your specific risk profile and agreed investment objectives. The portfolio is managed on a regular basis, and all the daily investment decisions are the responsibility of the dedicated investment manager. There are a number of advantages associated with a discretionary fund management including:

The portfolio will be professionally managed on a daily basis to ensure it remains closely aligned to your risk profile and continues to reflect your retirement income needs and investment objectives.

It provides for access to a broad range of funds and assets at institutional terms, some of which are not normally available to private investors.

It provides for access to your own dedicated investment manager offering a more personal service and regular contact

Requests for additional benefits such as bespoke reporting including consolidated tax statements can be accommodated.

It offers an opportunity to dictate investment preferences e.g. ethical, exclusion of tobacco or armaments etc.

It offers an investment manager who exists “closer to the market” and therefore can switch funds quickly to take advantage of potential investment opportunities.

It allows for monitoring of the investment managers fund performance against a pre-determined agreed benchmark


Discretionary Fund Manager Portfolio Name Investment Objective Risk Rating Allocation


They provide their investment managers with a degree of flexibility and discretion, whilst having robust control systems in place centrally to ensure they are performing to expectations

They provide access to a broad and diverse range of investment vehicles via their portfolios They have a clear and structured process in place for regular reporting They offer a high level of flexibility to ensure your portfolio is set up to meet your

investment goals and pension benefit requirements The charging structure of the recommended provider is competitive when compared to

similar services in the market place The research tool I have used to review the market place identified them as offering the

most suitable and competitive discretionary managed service to meet your needs and objectives

They have provided us and our clients with an excellent service in the past <INSERT ADDITIONAL REASONS HERE>

I recommend that you contact me regularly (unless other servicing arrangements have been agreed) to review the performance of the group pension plan investment strategy and continued suitability to the recommended Discretionary Fund Management Service.


<USE IF RECOMMENDING INDIVIDUAL FUNDS>

By investing collectively with others you will benefit from the inherent advantages of working as part of a group. A portfolio of funds can be assembled to match your investment objectives, attitude to risk and retirement benefit requirements. Funds are typically selected on the basis of their specified investment aims, their past investment performance, their volatility and other factors such as fees.


Fund Sector Risk Rating

Fund Rating

Initial Charge

Annual Managemen

t Charge

Total Expense

RatioAllocation


The above reflects your stated risk profile and investment objectives

The above is flexible enough to be changed at short notice to meet with your retirement benefit requirements

You wish to take a relatively simple investment approach where the strategy is straightforward and not overly complicated

The fund performances have predominately been above the sector average since inception They have excellent fund ratings - Morningstar apply a fund rating of 1 (poor) to 5 (good)

stars to investment funds. This is a risk-adjusted measure of fund performance relative to the fund’s peers within its sector

They have excellent fund ratings - Standard & Poors apply a risk-adjusted measure to a fund’s performance relative to its peers within its sector. The ratings range from A to AAA. Standard & Poors currently only applies a rating to about 20% of all funds

They have excellent fund ratings - OBSR provides Fund Ratings as an independent mark of quality. Based on a proven research process where qualitative research is supported by quantitative analysis, their Ratings are evidence that a fund is, for its type, consistently producing the returns it set out to deliver and will continue to do so. The ratings are Gold, Silver, Bronze, Neutral and Negative. OBSR currently rates about 250 out of a universe of approximately 2500 funds. They do not work to a 'quota' nor are they paid to rate funds

They have excellent fund ratings - Lipper Leader ratings are derived from highly sophisticated formulas that analyse funds against clearly defined criteria. Funds are compared to similar funds and only those that truly stand out are awarded Lipper Leader status. Funds are ranked against their peers on each of four measures: Total Return, Consistent Return, Preservation and Expense. For each measure, the highest 20% of funds in each peer group are named Lipper Leaders. The next 20% receive a rating of 4, the middle 20% are rated 3, the next 20% are rated 2, and the lowest 20% are rated 1

By investing in an actively managed fund you are not only gaining exposure to a range of asset classes, but the asset allocation and specific stock selection is being professionally managed on a daily basis

A With Profit fund invests in a selection of fixed interest securities, equities, property and cash. The returns achieved from a With Profit fund do not explicitly reflect the performance of the underlying assets, but are instead a function of the bonuses declared by the individual life company. The With Profit Fund aims to smooth the returns of your investment. The effect of smoothing is that you are likely to see a steadier return year on year rather than watching your investment rise and fall directly in line with the traditional stock market. However the value of a With Profit fund can still fall as well as rise. For example, the insurance company reserves the right to apply a Market Value Adjustment

A Distribution fund is actively managed and provides the ability to withdraw the natural distributions from the underlying fund as a regular income without eroding the units of the underlying capital

Multi-manager funds provide access to a range of investment managers under the umbrella of a single fund, with the fund normally able to negotiate special terms that are not available to individual investors. The multi-manager uses their expertise to select and assess the best performing fund managers in each asset class and regional sector. To this end, you will benefit from two layers of management expertise as well as considerable diversification. The asset allocation is set by the multi-manager who also monitors the performance of the underlying funds on a daily basis and re-balances the portfolio where necessary

UK equities have traditionally provided good risk adjusted performance over the longer term and act as an ideal core holding. The UK stock market is one of the largest in the world and is well regulated

Exposure to global equities will provide greater diversification. The economies of the world are often at different stages in their economic and investment cycles. Therefore by investing in different markets you can diminish the overall volatility of your investment portfolio

Gilts are UK government securities. These are very safe, less volatile than equities and should provide a relatively stable return over the medium to long term

Corporate bonds are fixed-interest securities issued by companies. They are generally riskier than gilts and therefore tend to pay a higher rate of interest. However they tend to be less volatile than equities and should provide a relatively stable returns over the medium to long term

Commercial property has generally provided relatively stable long term growth in both income and capital over the medium to long term. It is also considered a valuable asset class to hold within an investment portfolio, as it provides diversification away from equities and fixed interest securities

Absolute Return funds aim to achieve positive returns regardless of investment market conditions by investing in a variety of securities and derivate instruments. They typically aim to return a small margin above the bank base rate and are normally considered to be less volatile than equities or fixed interest securities

To provide further diversification and the potential for superior returns, I have recommended some exposure to some niche / specialist funds as I believe the outlook for these sectors is positive at the current time

Exchange Traded Funds provide the ability to track the performance of a chosen market index, which in turn provides a broad market exposure, a high degree of diversification and reduced risk. They are cheaper than many traditional pooled funds and are ideal investments to build highly effective portfolios that balance risk and return


I recommend that you contact me regularly (unless other servicing arrangements have been agreed) to review the performance of the group pension plan investment strategy and continued suitability to the recommended individual funds.


< INCLUDE FOLLOWING PARAGRAPHS FOR ALL INVESTMENT STRATEGIES>

Please bear in mind that the outlook for market sectors can change, certain asset classes and funds will perform better than others and as a result your asset allocation may become unbalanced over time which will require corrective action.

<SELECT PREFERRED WORDING>

This will be undertaken automatically by the recommended investment strategy provider(s)

This will be undertaken by us at the annual review date for the scheme

There may be occasions when an individual fund or funds that populate your portfolio has a higher risk rating than your stated attitude to risk. If this is the case, then the overall risk rating applied to all of the combined funds being recommended is still designed to meet the your stated risk profile.

I would wish to stress that higher charges can have an effect on the residual pension fund investment performance. In essence, where the investment strategy of the proposed new pension plan has higher charges than the ceding scheme it will need to perform better in order to cover any increased charges.

There are many facets to drawdown pension and these all need to be reviewed on an on-going basis. Fund performance will vary over time, annuity rates will change, the minimum and maximum withdrawals will vary, the Minimum Income Requirement could vary and your own financial circumstances will change. To this end I would recommend that you contact me to review this arrangement on an annual basis (unless other servicing arrangements have been agreed).

On overall balance, although I am confident that flexible drawdown pension is in your best interest, it is worth emphasising that this is a sophisticated product. It is important that you understand the implications, and risks involved in establishing a drawdown pension in preference to an annuity.

Further Information and Risk Warnings

Further information regarding the recommended product can be found in the Key Features Document provided and the Appendix of this report.

For further information regarding if contributions can be made, how benefits can be taken and the taxation of pension arrangements I refer you to the Technical Notes in the appendix of this report. A summary of the risk warnings associated with my recommendations can also be found in the appendix of this report.

Alternative Solutions Considered But Discounted

I confirm due consideration was given to a range of alternative solutions but subsequently discounted for the following reasons:

Conventional or Enhanced Annuity

You wished to take a higher risk approach with your pension funds in return for the potential to receive greater returns over the medium to long term

You required the potential to pass on a lump sum to your beneficiaries on your death You have other sources of income and did not require a fixed guaranteed income at this time You did not require a Pension Commencement Lump Sum payment at this time You wished to take your entire pension fund as an income lump sum You do not suffer from ill health You are a non-smoker You preferred to have control over your pension fund in its entirety rather than securing a

pension income for life and lose access to the capital <INSERT ADDITIONAL REASONS HERE>

Unit Linked / With Profit Annuity

You did not wish to take any further risk in respect to your retirement benefits You did not require a Pension Commencement Lump Sum payment at this time You wished to take your retirement benefits in the most flexible and tax efficient manner

possible You required the potential to pass on a lump sum to your beneficiaries on your death You have other sources of income and did not require any form of annuity You wished to take your entire pension fund as an income lump sum <INSERT ADDITIONAL REASONS HERE>

Capped Drawdown Pension

You did not wish to take any further risk in respect to your retirement benefits You did not require a Pension Commencement Lump Sum payment at this time You wished to take your retirement benefits in the most flexible and tax efficient manner

possible You required the potential to pass on a lump sum to your beneficiaries on your death in the

most tax efficient way possible You did not wish to be restricted by GAD income withdrawal limits because your other

pension income meets the MIR requirements You wished to take your entire pension fund as an income lump sum <INSERT ADDITIONAL REASONS HERE>

Phased / Phased Drawdown Pension (Capped Rules)

You required the maximum Pension Commencement Lump Sum payment at outset You did not wish to take any further risk in respect to your retirement benefits You did not wish to be restricted by GAD income withdrawal limits because your other


Third Way Pension

You did not wish to take any further risk in respect to your retirement benefits You did not require a Pension Commencement Lump Sum payment at this time You required greater flexibility over the way you took your retirement benefits You were not interested in the guarantees associated with Third Way Pensions You do not wish to incur the extra costs associated with protecting your pension fund value

or the income you receive You required the potential to pass on a lump sum to your beneficiaries on your death in the

most tax efficient way possible You have other sources of income and did not require any form of annuity You did not wish to be restricted by GAD income withdrawal limits because your other


APPENDIX

Risk Warnings – Flexible Drawdown Pension

In addition to the risks shown below, I recommend you read carefully the section entitled “risk factors” in the Key Features Document provided which highlights any possible disadvantages of affecting this plan.

For a full explanation of the charges and how they affect your plan, please refer to your personalised illustration and the Key Features Documents

The figures on any quotations provided are for illustration purposes only and are not guaranteed. The value of the investment is determined by the value of the units, the price of which can fall as well as rise. What you get back is not guaranteed. The value of your investment may be eroded by the effect of inflation over time

You must declare that your secure pension income meets the minimum income requirements legislation which if not, will render you liable to pay an unauthorised payment tax charge on the maximum GAD income withdrawal excess

Care must be taken not to contribute to pensions or accrue defined benefit pension entitlement in the same tax year as undertaking flexible drawdown. This will result in an annual allowance tax charge

Tax free cash and pension benefits are designed to supplement your income in retirement. By taking the tax free cash early, and or income lump sums in excess of GAD limits, these will not be available at a later stage

Any lump sum taken as income will be subject to income tax at your marginal rate Drawdown is a crystallisation event which means the value of your pension will be assessed

against the lifetime limit and the excess could be subject to a recovery charge of up to 55%. The recommendations are based on current taxation, law and practice and the current legal

and administrational framework and are based on my current interpretation and understanding of those, all of which may be subject to change.

Past performance is no guarantee of future returns. It is important to remember your income is not guaranteed. Income is never guaranteed

until the point your fund is used to purchase a conventional annuity (if indeed you decide to take this option at a future date).

The Minimum Income Requirement will vary as it will be reviewed every 5 years and if increased above your own income levels render you unable to use this retirement option

High income withdrawals are likely to erode the capital value of your pension fund and may not be sustainable. This could result in a lower income if an annuity is eventually purchased.

You should weigh up the flexibility of withdrawing income against the certainty of buying an annuity which pays you a guaranteed amount for the rest of your life.

The fund available to buy an annuity may be lower than illustrated. This could happen for a number of reasons, for example if:

o Investment growth is lower than illustrated.o Charges increase above those shown on the illustration.

Any annuity bought in the future will depend on interest rates at that time and the investment performance of your plan. No guarantee can be made that annuity rates will be better at that time.

Actuarial research indicates that individuals are living longer and this is predicted to mean that annuity rates will fall in the future and are likely to be less than they are now.

If you purchase an annuity you may benefit from a cross subsidy from those annuitants that die relatively early. This cross subsidy is not present with drawdown pension. Therefore a higher investment return will be required to provide a comparable income.

The combined effect of mortality drag and the on-going charges on a drawdown pension means that in order to produce the same income as a conventional annuity, the underlying assets must grow faster

If you start to take benefits earlier than you originally intended, the level of the benefits you can take may be lower than expected and may not meet your needs in retirement

When undertaking a pension transfer between two companies, there may be a period of a few days where your funds are not invested. Your fund could materially suffer as a result of any movements in the market during this time

There may be a possible change of fund value whilst the transfer remains pending unless a switch to cash is undertaken

The Cancellation Rights include the provision that the company from which the funds have been transferred are not obliged to take them back.

To obtain the benefit of equity investing, a long term view is advisable (i.e. a minimum of 5 years)