your future www.myupfpension.co.uk Winter 2000-2001 Have we got

Contents of ‘Your Fund’ 2 Simply aiming to news for you? make the most of your Fund Welcome to the Winter edition of Your Fund.

4 Pension splitting on It’s still the magazine designed to help you divorce understand more about the UPF, pensions in general 6 Our new pad... and issues regarding your financial future. UKPD goes on-line But have you noticed? care about the detail. But you don’t 7 Stakeholder It looks different. want information overload so we’ve tried pensions We’re always taking on board your to keep things simple. comments about the service we provide and In this issue we cover news of Eagle 8 Eagle Star comes on we’ve introduced some major new initiatives Star as a second AVC provider; the new board as a new AVC in recent months to help us to help you. UPF rules affecting divorce and provider for UPF This is just one of them. A lighter, brighter pensions; all the info you’ll ever need on 8 Countdown to news magazine to bring you up to date with our new website; stakeholder pensions excellence... in the major developments regarding the explained and much more besides. customer service Fund. Your pension is the key to the best Pensions news is unfolding every week years of your life and we know that you do and it is shaping your future.

This edition of ‘Your Fund’ has been printed on environmentally friendly paper and distributed to you in recycled envelopes.

can you afford not to keep up?

If you have any questions or views relating to this issue of Your Fund please contact u Hannah Clarke on her email: Hannah.Clarke@.com 1 the new trustee board struc make the most

Your pension is the key to your future and we know that – as Fund members – you want to know who is making investment decisions on your behalf. In the last issue of Your Fund Chris Lewin, Head of UK Pensions, reported on the changes to the structure of the trustee board. The board was too big, in view of the reduction in employee numbers over the years, and the existing trustee board were keen to address that fact. Here we remind you of the process and update you with the names of the new trustee board…

Trustees? So who are they then? We have reduced the number of The Unilever Pension Fund is looked directors from 24 to 14. This will bring after by a trustee company – Unilever the UPF more into line with other Pension Fund Trustees Limited. The major pension funds. The proposal to directors of the trustee company are reduce the size of the board had to be legally responsible for the assets of the approved by the membership of the pension fund and ensuring that the fund. And that’s where you came in. interests of all the beneficiaries are A total of 39 objections were being safeguarded. received by the deadline of 22 July

Member nominated directors Substitutes

The new North & West North & West Richard Clark Colin Fairclough board Unilever Research Unilever Research Port Sunlight Steve Cutting Bernie Mawdsley comprises: Van den Bergh Foods Unilever Research Norwich Port Sunlight Tommy Doyle Phil Robinson Lever Bros Port Sunlight Retired Ex-BEW Gloucester Company appointed directors South & East Dick Aynsley-Smith South & East Richard Greenhalgh (Chair) Van den Bergh Foods Brian McNaughton Tonia Dougal-Biggs Crawley Van den Bergh Foods Christine Drury Ashford Alan Cornish Richie Furlong Van den Bergh Foods Ken Smith Neil Hufton Purfleet BEW Lowestoft Jim McGovern Mike Samuel David Jones Terry Thomas Unilever Research BEW Lowestoft Colworth Pensioner Nominated Director Pensioner Nominated Director Robert Fairclough Dennis Cockerill John Scholey

2 STOP PRESS . STOP PRESS The pension pages of the ture . . . simply aiming to Intranet site (UK Link) have just been upgraded to reflect the recent changes to the Fund and of your Fund to the way UKPD works. The Intranet site gives different information from the Internet which fell considerably short of the existing 12 member-nominated site – being focused on the 6,792 objections needed to defeat the directors put themselves up for people within UKPD and the proposal. election by the delegates to determine general services on offer. One of the new directors was which of them should be the six board required to be a pensioner member members and which the six substitutes. And you can find it @ and the election of such a member has Finally Unilever reduced the number http://uklink.unilever.com now taken place. Additionally, the of company-appointed directors to seven. under UKNM: departments So who makes the investment decisions? As the trustee board continues to shape up for the future, we ask the Fund’s Chief Investment Officer Wendy Mayall some important questions about the decision making process.

YF We all know that the trustees YF What is the committee’s role? have a duty to obtain the best USF Report & Accounts possible returns when investing WM The committee suggests the the Fund’s assets. Can you tell investment strategy that the trustees Full details of the USF’s financial us how the trustees fulfil this should adopt. Once this has been activity during the 12 months to duty? agreed by the trustees, our role is to 31 March 2000 are available in the ensure that it is carried out. This USF Report & Accounts for the WM The trustees do have this obligation includes supervising the various period. To request a copy please although the phrase ‘best possible investment managers appointed to the complete the form below and send returns’ also means that they have to Fund. Although the committee does it to: consider other factors. For example, not get involved in the selection of they should not take excessive risks individual stocks and shares, it does The Fund Secretary, UK Pensions to achieve outstanding returns. keep a close eye on the investment Department, , As you know the Fund has between managers. Blackfriars, London £4.5 and £5 billion in assets and EC4P 4BQ the trustees have recognised YF How often does the committee that the investment of the Fund’s meet? (PLEASE USE BLOCK CAPITALS) monies calls for specialist expertise. For this reason they have delegated WM We meet four times a year and also Name: some of the supervision of the report to the full trustee board at investment process to the each of their quarterly meetings. Investment Committee. YF What is your role in the process? YF Who sits on the Investment Membership no: Committee? WM As Chief Investment Officer, I am involved in the daily business of WM Rudy Markham (Unilever’s Financial supervision of the Fund investments Director) chairs the committee which includes liaising with the Address: which includes two of the trustees, investment managers, watching out Christine Drury and David Jones; for trends to which we may need to Jeffrey Allgrove (Unilever’s respond, being alert to potential trouble Controller); Philip Lambert, Head spots and ensuring that the Fund’s of Unilever’s Corporate Pensions assets continue to be invested efficiently. Division; and Chris Lewin as well as A version of this interview has previously myself. There is also an external appeared in Pensioners News, our sister advisory member, Dr Neil Cross. magazine for pensioners. Postcode: 3 life is a journey Your Fund takes a look at what happens to pensions when partners divorce

No one ever gets But life changes people and sometimes people need married with the to change their lives if they want to live it to the idea that a divorce full. Approximately one in three marriages ends in will follow divorce and that’s very sad but it’s a fact of life. somewhere down When things do go wrong, the last thing couples the line. It’s just really want to do is to argue over the detail. But we not what we do. all know that’s exactly what can happen.

As the national press has recently Pension sharing or splitting is the reported, new laws have been new way forward. The Act introduced to open up new introducing the new way that possibilities in relation to the pension arrangements may be pensions of couples who are getting taken into account in cases of divorced. divorce is the Welfare Reform and Pensions Act 1999. Everyone is keen to treat the individuals concerned fairly and this The changes – effective in divorce has given rise to some interesting cases that commence on or after 1 new issues. The pension of one December 2000 – will be variously partner is often among a couple’s adopted by pension schemes largest assets when they divorce but throughout the UK, each one courts have not traditionally been deciding their rules on pension required to take pensions into sharing within the framework account when handling a settlement. which the Act lays down. The main change is that there will now But now that’s all changed. Since be the option to split a member’s 1 July 1996 courts have been given pension between the member and the authority to take pensions into the ex-spouse. This process is account when handling divorce simply described as pension settlements and the system set up was sharing. Under this option, the to earmark a proportion of one ex-spouse would benefit from a partner’s pension to the other transfer payment (or “pension partner. Earmarking occurs when a credit” as it is called) which has to percentage of the member’s pension be paid to an approved pension is credited to his or her partner on arrangement, or retained in the divorce. It is not a clean-break Fund within four months of solution. This is believed to be the authority from the court being main reason why it has been seldom given. This enables the used. The partner does not ex-spouse to have their own necessarily want their own pension to separate pension which can start on the retirement date selected commence whenever they by their former spouse. themselves retire. 4 and divorce is a stop that some of us make

The decisions made by the board of the trustee company – regarding the changes that affect members of the UPF – are set out as follows:

what if there’s a delay in who pays the cost of the resolving the pension matter? pension sharing process?

Where the ex-spouse does not The board of the trustee company advise the trustee board, within has ruled that (for the time being four months of the order, of a at least) no charge will be made to pension arrangement which can the member. Instead, the cost will receive the pension credit, the be borne by the Fund. trustee board has decided to pay the pension credit to an approved Pensions Credits arising from divorce pension arrangement chosen by will not be accepted by the UPF, at them, i.e. a personal pension plan least for the present. with an insurance company, to be held in the name of the ex- These decisions will be reviewed at a spouse. later date in the light of experience.

The new rules that affect pension sharing on divorce will be applied to the Fund from 1 December 2000. It is worth noting that on divorce the pension assets do not have to be shared but they must be considered along with all the other assets when the settlement is being considered. If pensions are shared, then this is taken into account when sharing the other assets.

If you have any questions on pensions and divorce or the new UPF pension sharing rules, please contact your personnel department or UKPD direct.

5 Have you visited our new pad yet? www.myupfpension.co.uk

Welcome to your new pensions website

UKPD has launched an easy to follow access this part of the website. The website website designed to give you and also explains the security measures in place, potential members of the Unilever the terms under which a password will be Pension Fund (UPF) – and your families issued and other associated information. or other dependants – and concise information on pensions. As for the future – with Internet technology developing at amazing Bright and contemporary, the website aims speeds – the sky’s the limit. The UKPD to give those with Internet facilities 24-hour web team is currently looking into ways access to basic information about the Fund. of allowing you more access to the data An interactive benefit calculator included in we hold on you and giving you the the menu gives you a rough estimate of opportunity to do more modelling of your pension payable at retirement age, and your benefits using different assumptions this calculation can also reflect the impact about retirement date, salary etc. of Additional Voluntary Contributions (AVCs) where relevant. This on-line facility is an exciting step forward for the pension fund – but it is The next phase of the website is about to go only one part of our communication live and will allow you to download an on strategy. We do not intend it to replace our demand benefit statement – an electronic written material as not all members of the version of the statement which will be Fund are able, or want, to access automatically issued by UKPD on paper information in this way. For example, from time to time. This part of the website although Your Fund will be pasted up on is strictly controlled by passwords for the website, it will still be distributed in security reasons. On the website there will print format to all employee members. be an electronic form for you to register So don’t worry if you do not have access to your wish to be issued with a password to the Internet – you won’t miss out. Stakeholder pensions . . . explained Just when you think you know where you are with your pension, some new scheme or product comes out that leaves you back at square one – trying to work out if you have the pension that’s right for you or if these new developments will affect your pension in the future. Here at UKPD we know how confusing these changes are for our members and we aim to keep you informed of the latest developments as they happen.

The latest news on pensions comes in the form of the soon-to-be introduced stakeholder pensions. The Government has unveiled further details of the new stakeholder pension plans – available from April 2001 – that are designed to make pension ownership more widespread and reduce the dependency on the State.

Stakeholder pensions aim to increase the spread of private pensions by offering low-cost flexible plans to people – mostly with earnings between £10,000 and £30,000 – who are not currently able to join pension schemes or who don’t have a personal pension of their own. These schemes can be independent of individual employers, being set up by trade unions, trade associations, local chambers of commerce or pension providers.

The main benefit of stakeholder pensions is that they provide total flexibility, allowing the ‘stop and start’ option that many people rely on because of a change in working circumstances. The difference is that the provider won’t impose penalties for offering this service.

6 Stakeholder pensions are Unilever is considering its position regarding the new aimed at those who do not stakeholder pensions, as details surrounding the schemes are belong to an occupational still unfolding. As soon as decisions have been made we will scheme. However, as a let you know. member of UPF you may It may be possible for some people to hold a stakeholder consider taking one out in pension without disrupting their existing pension addition to your UPF arrangements. membership. FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS . FOCUS Your essential guide to stakeholder pensions:

What is a stakeholder pension? Where is the money invested? What about me? I am already a member of an occupational scheme – A stakeholder pension is a new, low- The money will be invested in shares and the UPF cost, flexible method of saving for other deposits, fixed interest securities etc. retirement which is available from 1 The accumulated sum will be converted Your membership of the UPF will not April 2001. They are more portable into a pension on retirement. be affected by the introduction of than personal pensions or stakeholder pensions. However, if you occupational schemes. The How can people save without earnings? earn less than £30,000 a year, you are providers of these pensions cannot able to take out a stakeholder pension charge savers more than 1% a year Money can be paid into a stakeholder at the same time as being in the UPF. of their total savings to run them. pension by someone else on their behalf It is not clear whether this would or They must let savers stop, start, or they can use existing savings. would not be better than paying AVCs. increase and reduce payments with no penalties. The minimum How will stakeholder schemes be Stakeholder schemes will have to meet contribution is £20 a month. made available? certain minimum standards to count as stakeholder pensions and be granted Savers will benefit from tax relief on Those people in employment who are not approval and a number of schemes have their contributions, even if they don’t able to join an occupational scheme will already passed through the three-part pay tax. This will be added to their have to be offered a stakeholder pension registration process. The first firms to stakeholder fund by the Government. by their employer. This could be one it register as stakeholder providers were has arranged or one provided by an Norwich Union, Nat West Life, Royal & Why have they been introduced? associated group such as a trade SunAlliance and Britannic. association or trade union. Alternatively, To enable people not in an a saver can join a stakeholder scheme set occupational pension to save into a up by an insurance company. Pensions minister Jeff Rooker has pension scheme that is similar to a launched a helpline for members of personal pension. Examples of those Do all employers have to provide the public seeking answers to who may benefit from these new style access to a stakeholder scheme? questions on stakeholder pensions. pensions are individuals who are The helpline is run by OPAS – the likely to encounter periods of Yes, except those with fewer than five Pensions Advisory Service – and unemployment during their working workers. The employees in this case will funded by the Department of Social lives or people who take career not have access via their employers. Also, Security, and the Financial Services breaks. The idea is that these employers will not have to provide access Authority. individuals can carry on contributing to a stakeholder scheme if all their Stakeholder pensions hotline: even when they do not have fixed employees have access to a company 0845 601 2923 earnings. pension scheme. 7 Eagle Star comes on board – as a new AVC provider for UPF

Eagle Star, a new Additional investigating the setting-up of an members an alternative to Equitable Voluntary Contributions (AVC) additional AVC provider to offer AVC Life and we will be explaining these provider, has been appointed by the payers more choice, and in options early in the New Year at a UPF trustees to operate an AVC September they appointed Eagle Star. series of on-site presentations.” scheme open to all members of the You may have read in the last edition UPF. It will run in parallel with the of Your Fund that Equitable Life had What do I need to know? existing Equitable Life to make some changes to the bonuses If you are interested in joining the arrangements and, subject to the they grant for with-profits policies, AVC scheme – or making changes to finalisation of some legal details, with the result that they put your future contributions or existing will be available to members from themselves up for sale. At the time balances – you might like to read the 1 January 2001. this issue of Your Fund went to press, enclosed leaflets and then attend they had failed to find a buyer and your local road show. From January, therefore, you will had decided not to accept any new have a wider choice for future AVC business. Although they will still contributions. You will also have the accept future contributions from UPF How can I find out more? opportunity to switch any existing members, including new AVC payers, AVC funds, but this will be subject to the expected levels of bonus from the Information on AVC’s in a penalty charge in the case of the with-profits fund are likely to be general, the Equitable Life, Equitable’s With-Profits Fund. reduced. and Eagle Star can be found on our website: Why is there a new provider? As Chris Lewin explained, “the www.myupfpension.co.uk or For some time the Trustees had been appointment of Eagle Star will give from UKPD direct.

countdown to excellence . . . UPF roadshows in customer service – what next? Your personnel officer Our goal at UKPD is to provide superb customer service and – should be able to provide to help you to see what we mean by that – we have drawn up more information and will a draft customer charter to show you the standards we aim to achieve. be helping us to run an AVC roadshow in the 1 Every enquiry including email will be dealt with within 10 working days (with the exception of Internal Dispute Resolution Procedures). coming months when you 2 We always answer your questions within this deadline unless we are will have an opportunity waiting for important information on your case. to put your questions to 3 We will request any missing information and inform you of the situation within the deadline. representatives from 4 We will send out figures which are clear, helpful and accurate first time. UKPD, Equitable Life, 5 We will try to obtain the same standards from our providers. Eagle Star and, hopefully, 6 We will answer the telephone within 4 rings. 7 We will publicise our enquiry telephone numbers. an independent Financial 8 Where we have voicemail, we will leave clear messages giving details of Adviser. how and when we can be contacted. 9 We will continually review our correspondence and evaluate our UK Pensions Department, performance generally. Unilever House, 10 We will continually keep our website (www.myupfpension.co.uk) up to date Blackfriars, with current news and details of your benefits. London EC4P 4BQ

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