We are living in extraordinary times. Coronavirus (COVID-19) is affecting every one of us and in this time of uncertainty I wanted to reassure you about your pension benefits and the Pearson Pension Plan (the Plan).
We have been closely following Government and public health recommendations regarding the outbreak of COVID-19. As a result, the pensions team office at 80 Strand is closed and the whole team is working remotely until further notice. We have robust business continuity plans in place for the pensions team and our key suppliers to minimise any impact on the Plan and its members.
I would like to specifically highlight the following points:
- If you are a Defined Benefit (DB) member of the Plan your benefits have a high degree of security due to the strong financial position of the Plan.
- If you are a pensioner member of the Plan your pension will continue to be paid to you as normal.
- If you are a Defined Contribution (DC) member of our Money Purchase 2003 or Auto Enrolment sections and are considering retiring or transferring your pension, it is business as usual. However, markets are currently volatile which means that the value of your pension can change on a daily basis.
- If you are a DC member of the Plan you can get up to date information about your pension pot, change your contributions or change your investment choices by visiting www.aviva.co.uk/membersite - This link opens in a new browser window. However, we would recommend that you take independent financial advice regarding investment decisions especially in current circumstances.
- Regardless of which Plan section you are in, more than ever it is important to be aware of pension scams. For more information, visit the Don’t get Scammed page in the Knowledge Hub. The Pensions Regulator has also issued advice regarding transfers in these unusual circumstances: https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2020-press-releases/covid-19-savers-stay-calm-and-dont-rush-financial-decisions - This link opens in a new browser window
If you need to contact us?
As you would expect, our helpline (0800 7811378) is experiencing high number of calls.
If at all possible please contact us by email firstname.lastname@example.org To help us answer your query quickly, please have your personal details to hand, including your National Insurance number.
Unfortunately, as the pensions team are not working from the office at 80 Strand, there are significant delays in us accessing our post.
The pensions team are doing all they can to provide members the support and services they require, but in these circumstances, we do expect response times to be slower than usual.
In addition, for our Pensioner members:
The vast majority of our pensioners will be able to access our secure member site. If you have a general enquiry, such as changing your address or bank details or accessing your payslip/P60, you can do this online.
If you haven’t already done so you can register at www.pearson-pensions-portal.com/Register - This link opens in a new browser window using the activation code previously issued to you. If you don’t have this, please email email@example.com, quoting your national insurance number and date of birth (so that we can verify you on our system).
We will continue to monitor the situation closely and will, if necessary, adapt our business processes as circumstances change.
Stay safe and well.
Pension Plan Funding (DB Members)
In recent days there has been quite a bit of media comment on the implications of the sharp fall in global equities and on the funding levels in UK defined benefit pension schemes. I would like to emphasise that the Plan is in a very different situation to most private sector pension schemes. Over recent years, the Trustee has adopted a strategy to de-risk the Plan’s defined benefit investment portfolio and embark on a process of insuring its pensioner liabilities. As a result:
- The Plan has no exposure at all to quoted global equity markets
- 50% of its defined benefit investments consist of insurance contracts with leading insurers that provide the income covering about 95% of the Plan pensions in payment
- The majority of the remaining assets are UK government bonds
- The Plan has more than sufficient access to liquidity across its investment portfolio for its cash needs
The combination of these factors puts the Plan in a very strong financial position, providing stability to our funding level and a high degree of security for our members. Earlier in the year the funding level was in excess of 100% on the measure we agreed with Pearson. The Trustee is continuing to monitor the COVID-19 situation and keeping a close eye on the funding position of the Plan.
Your Defined Contribution (DC) pension pot
If you are invested in one of the Lifecycle options
If your DC pension pot is invested in any of the Plan’s Lifecycle options, these use a pre-selected mix of investments which include funds that invest in global stock markets. The proportion of your DC pension pot invested in these funds depends on the time to your Selected Retirement Age (SRA). If you are further away from retirement, more of your DC pension pot will be invested in these funds. This means that changes to the value of your DC pension pot over time will continue to be linked to the highs and lows of global stock markets. As you get closer to your SRA, your DC pension pot is automatically moved into the appropriate diversified funds.
Over the longer term, the Lifecycle options are designed to provide growth for your DC pension pot. It’s important to remember that over the coming months we expect some sharp changes in the value of your DC pension pot which can be up or down.
If you are invested in the Self Select options
If your DC pension pot is invested in the Self Select fund range, you should regularly review your investment choices to ensure they are still in line with your retirement objectives and attitude to risk.
What do you need to do?
We recommend that you take financial advice before making any significant changes to your investment strategy.
If you are getting close to retirement, we would suggest that you consider your plans carefully. If you are using the Self Select range of investment funds, and are planning to retire in the near future, understanding the recent performance of your investments is particularly important before deciding how and when to withdraw your DC pension pot.
What do you need to look out for?
If you have been approached out of the blue either via social media, phone or letter to transfer your pension, ask yourself these questions, and call The Pensions Advisory Service on 0300 123 1047 if you have any doubts:
The company that contacted you:
- Did you get cold called?
- Is the firm FCA registered?
- And is it authorised to give advice on pensions?
You can check at https://register.fca.org.uk - This link opens in a new browser window.
Make sure the firm contacting you is not impersonating a genuine FCA authorised firm. Always use the contact details on the FCA Register, not the details the firm gives you.
- Have there been complaints about the adviser, firm or investment? Do a thorough internet search. Also check on forums and social media for mentions
- Is their address a PO Box or a serviced office? Again, do a thorough internet search of the address to check
- Can you contact the business at their registered office?
- Is the contact number a mobile number?
What were they offering?
- Are you being offered guaranteed returns?
- Are you being pressured into making a quick decision or under time pressure to sign documents?
- Are the investments regulated by the FCA? Check at www.fca.org.uk/scamsmart - This link opens in a new browser window
- Has a courier been involved in the process?
What you can do
Be wary of offers of free pension reviews. A free offer out of the blue (from a company you have not dealt with before) is probably a scam.
Get impartial information or advice.
You can use a financial adviser to help you make the best decision for your own personal circumstances. Make sure they are regulated by the FCA and never take investment advice from the company that contacted you. This may be part of the scam.
You can find an Independent Financial Adviser in your area at www.moneyadviceservice.org.uk - This link opens in a new browser window
If you’re over 50 and have a Defined Contribution Sections (DC) pension, Pension Wise (www.pensionwise.gov.uk - This link opens in a new browser window) offers pre-booked appointments to talk through your retirement options.
The Pensions Regulator has also issued advice regarding transfers in these unusual circumstances: https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2020-press-releases/covid-19-savers-stay-calm-and-dont-rush-financial-decisions - This link opens in a new browser window
Be very cautious. As well as losing your life savings you could also face a huge tax bill.
Remember if it sounds too good to be true it probably is.