Lewis Workplace Pension Scheme Additional Information

Please find below detailed information covering all aspects of your Lewis Workplace Pension Scheme.  Please click on the buttons below to access the information.

Key Investor Documents

To access the key investor documents for your scheme profile, please click the appropriate link below:

Auto Enrolment Default Portfolio

Auto Enrolment Cautious Portfolio

Auto Enrolment Moderate Portfolio

Auto Enrolment Speculative Portfolio

Product Description - Lewis Workplace Pension Scheme

Lewis Investment is proud to offer a modern and competitively costed, Master Trust, with advice.

A Master Trust is an occupational pension scheme where each employer has its own division within the master arrangement. There is one legal trust and, one trustee board. The trustee retains decision making independence for each division on things such as investment funds and service providers under a trust wide governance structure. The decisions over contribution levels typically reside with the employer.

There is one legal trust and, therefore, one Trustee Board. The Trustee retains decision making independence for each division on things such, investment funds and service providers under a trust-wide governance structure. The decisions over contribution levels typically reside with the employer. The original trust-based schemes were developed in the 1950’s. At this time, a number of insurance companies set up schemes allowing any number of employers to participate, avoiding the costs associated with an employer running its own trust-based scheme.

Product Description - Unit Trusts / OEICs / ICVCs

Unit Trusts/Open Ended Investment Companies (OEICs)/ICVCs allow the individual investor to participate in a professionally managed portfolio of securities or other assets with many other investors. Through the pooling of resources, monies can be invested in a wide spread of investments at a lower cost than could have been achieved by individuals acting on their own. Professional investment management provides two further benefits: specialist expertise that should achieve better performance and a reduction in the administrative burden of looking after individual holdings.

Definition of Unit Trusts

A unit trust is an investment fund divided into equal portions called units. Unit prices are calculated regularly - normally on a daily basis. Usually two prices are quoted: the higher - the offer or buying price - is the price the investor pays to buy units. The lower - the bid or selling price - is the price that the investor will receive on selling units. Unit trusts normally pay dividends to investors twice a year, although some funds pay dividends more regularly.

The price of units is governed by the value of the underlying securities in the fund. This price will rise and fall in line with movements in the price of the assets in which the unit trust is invested. The value of a unit trust investment and the income from it can therefore go down as well as up. Unit Trusts are gradually being replaced by OEICs.

Definition of OEICS

Open Ended Investment Companies (OEICs) are similar to unit trusts. OEICs invest in the shares of other companies and are managed in the same way as unit trusts. Instead of buying units, the investor buys shares in the Open-Ended Investment Company. These shares are usually priced daily. Investors who buy shares in an OEIC pay the published share price plus an initial purchase charge. Sellers of shares receive the published price.

Definition of ICVCS

ICVC stands for Investment Company with Variable Capital. Many fund managers have established ICVCs which enables them to market funds across the European Union. Effectively, they offer the same features as OEICs. An advantage over the more traditional OEIC is that they enable fund managers to launch new funds more cost effectively as they are treated as sub-funds of the original umbrella ICVC Company.

 Investment Powers & Restrictions

The Financial Services Authority (FSA) authorises all unit trusts and OEICs which have to comply with strict rules. These stipulate that:

  • An independent trustee, or depository in the case of an OEIC, (normally a large bank or one of the major insurance companies) must oversee all transactions and provide safe custody for the securities and cash held by the unit trust/OEIC.
  • The general limits for an individual fund are laid out in the trust deed of a unit trust, to be monitored by the trustees and in the instrument of incorporation of an OEIC, to be monitored by the depository.
  • No more than 10% of the total value of the fund can be invested in the shares of any one company.
  • There must be a minimum of sixteen holdings (although in reality, between fifty and one hundred is more typical).
  • At least 90% of the holdings within the fund must be invested in approved securities.

Investment Options

A wide range of funds are available from a large number of unit trust and OEIC providers. Some may aim to generate higher than average income; others are expected to generate longer term growth, possibly with less income. Some unit trusts and OEICs cover the whole of the UK market; others specialise in particular areas. Unit trusts and OEICs can be an excellent way to invest overseas - either through funds which concentrate on particular markets such as Europe, the Far East and North America, or general international funds.

Income

Many funds offer the choice between accumulation and income units/shares. Income units/shares pay income either half yearly or quarterly. A limited number of funds provide a monthly income option. Reinvestment/accumulation units/shares reinvest the underlying income to help boost capital growth.

Repayment

Units/shares can be encashed at any time and the proceeds are usually available within seven to ten days.

Situation on Death

Investment funds do not have to be encashed on death but treatment does vary between fund providers. Where they are not automatically encashed, funds may be passed on as an asset of the estate and can be re-registered accordingly.

Who May Invest

  • Anyone aged over 18.
  • Investments may be held on a designated account on behalf of minors.
  • Investments may be made by trustees where the trust deed permits.

Comment

Unit trusts/OEICs are a tax efficient and cost-effective way of benefiting from professional investment management. Investments can be tailored to suit the needs of the individual investor, with the flexibility to change fund selections and to provide income, capital growth or a combination of both.

UCITS III

UCITS stands for Undertakings for Collective Investments in Transferable Securities and are a set of European Union Regulations. In order for a collective investment fund such as a Unit Trust or OEIC to be marketed freely across the EU, it must apply for UCITS status. The advantage for the investment funds is that with a larger potential market economies of scale will reduce costs which can then be passed on to investors.

In practice, where funds apply for and achieve UCITS status, the most significant change will be the freedom to invest in a wider range of asset classes, including derivatives, in addition to the standard shares, bonds and cash. This should enable fund managers to take a more pragmatic approach to investment and has led to a rise in “absolute return funds”. These funds aim to achieve positive returns for clients in all market conditions.

By February 2007 under the new FSA rules all authorised funds must be either UCITS III or NURS (non-UCITS retail scheme). All UCITS III funds will be FSA regulated in contrast to existing traditional hedge type funds which use similar wider investment powers. Overall, we believe that this legislation is generally positive for the fund management industry and will help fund managers to meet investors’ expectations.

Provider Information

Carey Pensions UK LLP and Carey Pension Trustees UK Limited, will provide the administration and governance of the trust.

The Carey Group is a series of financial services companies established in the financial centres of Guernsey, Isle of Man, Cyprus, Geneva, Luxembourg, Monaco and Zurich. Each company employs professional teams that provide technical support and administration services to commercial and institutional business and organisations, pensions and employee benefits and international private clients. Services include the formation of trusts and companies in various jurisdictions, the setting up and administration of personal pensions and employee benefit trusts or share option plans.

Their affiliation to Carey Olsen, the largest law firm in the Channel Islands, means that they have the ability and financial stability that we look for in a SIPP provider. We have also been able to negotiate favourable fees for our clients ensuring that the SIPPs are extremely competitive.

Pershing Securities, a subsidiary of The Bank of New York Mellon Corporation (Nominee Account) will offer the trading ability and execution services to manage the ‘Default’ fund portfolio.

Pershing Limited, an affiliate of Pershing LLC and a subsidiary of The Bank of New York Mellon Corporation, was established in London in 1987 and is a leading provider of outsourcing solutions for private client firms and institutional broker dealers in Europe.

Legal & General, (Auto Enrolment ‘Default’ Portfolio) will offer the funds for the investment funds for the pension monies.

Legal and General have been around for over 175 years, providing the best possible products, a clear, fair service and a safe pair of hands for your money.

They are recognised by three of the world's leading independent rating agencies for financial strength, Standard & Poor's, Moody's and A.M.Best. and Legal and General’s investment business is one of the biggest in the UK, £413 billion worldwide (as at 31 December 2012).

Financial strength is a major focus for L & G as a business. In December 2012 they announced an Insurance Group Directive (IGD) surplus of £4.1 billion. This is more than double the level of regulatory capital companies are required to hold. In these volatile markets they continue to believe it appropriate to maintain a prudent IGD coverage ratio. Their strong balance sheet will continue to provide a significant buffer against the uncertain global economic and regulatory environment.

Many savings, life assurance, mortgage repayment and pension plans last for 20 years or more. With such long-term financial commitments, it is vital that you invest with a company that will still be going strong when your policy matures.

Seven Investment Management (Advised Service), will offer the fund platform for each of the investment funds, with a ‘whole of market choice’ to be held on. Seven Investment Management manage money for a range of private investors, working in partnership with their professional advisers and have over £5 billion under management.

Risk Warnings for the Lewis Workplace Pension Scheme

‘Out of the market’ period

When a transfer in to a new pension takes place, there is a short period between receiving instruction and the new pension being set up. The existing investments will be sold and then if appropriate, new investments made. In this period, your funds will be ‘out of the market’ while the actual transfer is effected. Stockmarkets could rise or fall between the sale and the repurchase impacting the value of your investment.

Past fund performance versus future fund performance

The value of investments, and the income from investments, can go down as well as up and the investor may not get back the full amount. This type of investment should always be considered medium to long term (i.e. at least 5 years).

Whilst specific replacement funds may have been recommended because of their excellent past performance and strength of fund manager, there is potential for the existing fund to outperform the new fund. There is no guarantee the new fund will have better performance going forward compared to the existing fund.

Foreign exchange rate fluctuations

Some of the funds' investments might be held in foreign currency and the value of an investment can rise and fall purely on account of exchange rate fluctuations.

Product transfer value warning

There is no guarantee that the amount you get back will be greater than that which you would have received had you remained in your previous plan.

Taxation

Tax levels, bases and reliefs are subject to change. Any tax elements referred to are those currently applying and may change in line with HMRC.

Risk Warnings for Investments

Investment term: Please remember that past performance is not a guide to the future. The value of investments, and the income from investments, can go down as well as up and the investor may not get back the full amount invested. For this reason, this type of investment should always be considered medium to long term (i.e. at least 5 years).

Foreign Currency: Some of the funds' investments may be held in foreign currency and the value of an investment can rise and fall purely on account of exchange rate fluctuations.

Past Performance: Please bear in mind that whilst we have recommended the funds because of their excellent past performance and strength of the fund manager, there is potential for an existing fund to outperform the new fund. There is no guarantee a new fund will have better performance in future when compared to an existing fund.

Property Funds: Please note that in severe and difficult market conditions in respect of some Property funds, the provider might reserve the right to demand up to 180 days' notice before dealing with substantial capital encashments. However, full or part encashments otherwise are usually on demand and free from penalty.

Illustrations: Actual investment returns may be less than those shown in any illustrations.

Switches: I remind you that that there will be a short period, between the investments being sold and then reinvested, when you will be ‘out of the market’. During this period stockmarkets could rise or fall, to your advantage or disadvantage.

Affordability: If you are making regular contributions, you have confirmed that the payments are affordable now and you anticipate that they will remain so in the future.

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