Introduction

1. As the trustee Chairman, every three years I have to provide you with a statement which explains what steps have been taken by the trustees to meet governance standards that apply to the RJH Pension Plan, a defined contribution (“DC”) pension fund. The law sets out what information has to be included in my statement and this is covered in the following sections. The governance requirements are designed to help members achieve a good outcome from their pension savings. I welcome this opportunity to explain what the trustees do to ensure the DC arrangements are run as effectively as they can be.
Default Investment Arrangement

2. The default investment arrangements are provided for all members of the Plan, all of whom are deferred members. The Plan is not open to new members. The default investment choices are reviewed regularly by the trustees to ensure they remain appropriate for members.

3. All funds are invested with Zurich Assurance Ltd in their With Profits 2 EP and With Profits 2B EP funds. These funds invest in fixed and variable interest investments, shares, property, cash and financial instruments. At 30th June 2021 the investment mix was:

• Fixed/variable interest investments 71%
• Shares and options 27%
• Property 1%
• Cash 1%

Reviewing the Investment Arrangement

4. The trustees are expected to review the investment strategy and objectives of the default investment arrangement at least once every three years, taking into account the needs of the membership when designing the default arrangements.

5. The last review of the default investment arrangement was completed on 30th June 2021. As a result of this review, the trustees decided not to make any changes to the existing DC investment strategy.

Core Financial Transactions

6. Bonus units are added annually or on a member leaving the fund. The trustees ensure that the annual statements of members’ units and unit values are received promptly and are checked for accuracy.

7. Members’ requests to leave the fund are addressed to the trustees who monitor the response from Zurich Assurance Ltd so as to ensure transactions are processed promptly and accurately.

Transaction Costs

8. The trustees have written to Zurich Assurance Ltd to obtain information about transaction costs.

• Charges are applied to each member’s fund rather than to the scheme as a whole and therefore apply from the time contributions commence or increase for each member.
• The scheme has a Capital Levy charging structure, whereby 6.5% of the units purchased by the initial year’s regular premiums are deducted at each renewal, on the decreasing balance, for a maximum of 20 years on non-protected rights and to selected retirement date on AVCs.
• Any units purchased by increments above the initial year’s regular premium and before 19 May 2015, will also attract this charge, but on the increment only.
• No future charges are deducted on claims within 5 years of the plan retirement date, or on death at any time. Since the scheme discontinued on 30 July 1999 all members are more than 20 years from their last possible increment so no charges are due from the non-protected rights funds.
• There is a bid / offer spread of 5.26% but this only takes effect when the benefits are claimed (although it is taken into account whenever the funds are valued).

Trustee Knowledge and Understanding

9. The law requires the trustees to possess or have access to sufficient knowledge and understanding to run the scheme effectively. The trustees take training and development responsibilities seriously.

10. Newly appointed trustees are expected to complete a minimum standard of training within six months of being appointed.

11. As a result of the training activities which have been completed by the trustees, and taking into account the professional advice available to us, I am confident that the combined knowledge and understanding of the trustees enables us to exercise properly our functions as the Trustees if the RJH Pension Plan.

 

Approved by the Trustees on 25th October 2021

Michael Jones
Chairman