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1 1 Mercer Marsh Benefits is a trading name used by Mercer Limited (No. 984275), authorised and regulated by the financial conduct authority . Registered office in England and Wales: 1 Tower Place West, Tower Place, London, EC3R 5BU. Retirement & your pension Approaching retirement can be a stressful and in many ways, daunting prospect. How our current standard of living can be maintained without the security of employment is as big a financial challenge as we are likely to face. One of the key components in how you address these questions is likely to be: what should I do with my pension? With this in mind we have compiled this retirement guide to help you understand the main issues and concepts that will affect you, both as you approach retirement and when you eventually decide to call time on your working life.

2 Building a retirement plan You are able to access your retirement Benefits from the normal minimum pension age. In most cases this is age 55, however it is due to increase to age 57 from 2028. The introduction of greater pension freedoms from April 2015 has afforded you a much wider choice in how you manage your pension income in retirement. The primary implication of these freedoms is that you are no longer tied into drawing your pension fund as a secured income for life by purchasing an annuity . Other options now exist to give you much more flexibility, including drawing an income from your pension fund whilst remaining invested, which can be as much or as little as you like. Whilst this new found flexibility opens up a myriad of options for those approaching retirement, creating greater opportunity to draw your Benefits in a way which best suits your needs, it also presents significant challenges.

3 For example, if you decide to draw an income from your investments rather than purchase an annuity, consideration needs to be given to the real danger that drawing too much too soon will seriously erode your pension fund, potentially leaving you with insufficient funds later in life. Your investment options 2 Consolidating your pension 3 Overseas Pension arrangements 3 Pension scams 4 The Lifetime Allowance 4 Your options in retirement 5 The State Pension 7 Inheritance Tax 7 Nominating Beneficiaries 7 Contents 2 Mercer Marsh Benefits is a trading name used by Mercer Limited (No. 984275), authorised and regulated by the financial conduct authority . Registered office in England and Wales: 1 Tower Place West, Tower Place, London, EC3R 5BU.

4 Deciding when, and how, to access your pension fund is obviously a very important consideration. There are many things to consider, including tax planning and provision for your dependents if appropriate. We therefore feel that it is imperative that everyone approaching retirement develops a long term pension income plan and that this is reviewed regularly. The information in this brochure will answer some of the questions you have surrounding your pension, but it will not provide you with all the information you need to build this retirement plan. Unless you are already versed in pension legislation, tax planning and financial markets, this is something you will need to consult a financial adviser for. We would therefore recommend that you obtain financial advice.

5 Details of Mercer Private Wealth can be found in the following link: Approaching retirement Your investment Alongside your ongoing contribution, how your pension has been invested will be the main differentiator in how much your pension fund has grown over time. It may be that you have taken an active interest in these investments, in which case you are more likely to be aware of your current portfolio and how you would like to continue with these into your retirement and beyond. However, if not, it is likely that you have been invested in your scheme s default fund. This is an investment set up to provide members with a reasonable chance of growth without them having to take an active role in their overall pension portfolio s management, which lots of people feel uncomfortable with.

6 One of the key components to a default fund is the inclusion of a lifestyle profile. This gradually switches your funds from riskier growth bearing assets, such as equities, into more secure investments, so that as you approach retirement, you are less likely to suffer from severe market downturns during a period where you have less time to make back any losses. Lifestyle profiles are an important mechanism for investors who are less involved with the management of their portfolio, however historically they were designed for people to purchase an annuity at retirement. In this type of lifestyle profile, pension funds are gradually switched into fixed interest securities (like bonds) and cash deposits, in an attempt to protect against the movements of annuity rates (themselves based partly on fixed interest securities).

7 Following the introduction of greater pension flexibility, many people are now choosing not to purchase an annuity at retirement. Consequently, traditional lifestyle profiles may no longer be suitable for the needs of many people. For example, those people who plan to remain invested and draw an income from their funds, may require a lifestyle profile which continues to invest in some growth assets both before and at retirement, albeit at a lower level than earlier in their working life due to the volatility that they also bring to a pension fund. Equities Investments in company shares and other similar investment vehicles, which are traded on stock markets. Generally perform better in rising markets. Fixed Interest securities (Bonds/Gilts) A means of raising capital by companies and Governments.

8 Effectively, the investor lends money to the company/Government with the expectation of receiving interest at a fixed rate in the future. Traded on similar markets to equities and generally perform better in falling markets. Cash deposits Investment in cash vehicles such as bank accounts. Carry a minimal level of risk, but also a limited expectation of returns. Terminology 3 Mercer Marsh Benefits is a trading name used by Mercer Limited (No. 984275), authorised and regulated by the financial conduct authority . Registered office in England and Wales: 1 Tower Place West, Tower Place, London, EC3R 5BU. Most pension providers now offer lifestyle profiles which are designed for people who wish to take income drawdown at retirement, or for people who have not yet decided on their plans and wish to keep their options open.

9 It is vitally important that you check which fund(s) you are invested in, including any lifestyle profile where appropriate, and whether these match your retirement plans going forwards. For more information about your scheme default fund please visit your Benefits website. For wider information about investment principles please click here. Consolidating your pension(s) You may have contributed to several pension plans over the course of your working life, either with previous employers or on your own. It is important to keep track of all your pension plans. Most pension arrangements of which you have been a member must send you a statement each year. However this can only happen if they have up to date contact details for you.

10 If you wish to trace any pension plan, you can do this by contacting your pension provider (if you know which one to contact) and/or your previous employer for details if you do not already have them. In addition, the Government also currently offers a pension tracing service. Details can be found in the following links: Once you have details of all your pension plans, it is important to examine whether they are suitable for your needs or whether some action is required. For example, older style pension plans may be making high or punitive charges on the funds held on your behalf, or they may not be invested in a way which meets your needs and personal attitude to risk. You may want to consider consolidating your different pension plans under one contract.