Transfer of Selected Benefit Scheme Funds
In June 2007, the Trustee of the G.E.C. 1972 Plan informed members of a proposal to transfer all funds held in the Selected Benefit Scheme (SBS) to the BlackRock Pensions Limited DC Cash Fund. Members were also reminded of the option to transfer their SBS balances at any time to other BlackRock or Standard Life funds.
The purpose of the proposal is to enable members to obtain a low risk rate of return likely to be in excess of the 2.5% expected from SBS in the foreseeable future.
Members were given the opportunity to comment upon / ask questions about this proposal during a consultation period. During this time, the Trustee received and responded directly to a small number of members who raised concerns and/or sought further clarification. One of these was from a member who expressed concern that the returns on the DC cash fund shown in the newsletter were before the deduction of management fees and that attention had not been drawn to this fact. It should be noted that:
- At the time the newsletter was issued management fees were 0.65%
- In the intervening period a reduced fee of 0.4% for the DC cash fund has been agreed.
- Even taking the higher management fee into account, past returns have been comfortably higher than credited interest of 2.5%.
- After deduction of the new reduced management fee, projected future returns continue to exceed the expected level of credited interest.
Following the completion of the consultation period, and after further consideration, the Trustee has decided to proceed with the transfer of SBS funds as being in the best interest of members.
If you are a SBS member, you should now do the following:
- Complete form SBST and return it to the telent Pensions Office by 30 September 2007. This form confirms to which fund(s) you wish your SBS balance to be transferred.
- If you are currently contributing to SBS, you should also complete and return form(s) ML1 and / or SL1 and return to the telent Payroll Department by 30 September 2007. These forms confirm where you wish your future contributions to be invested.
Where completed forms have not been received, and in the absence of specific instructions, both SBS balances and future contributions will be placed against the default fund, i.e. the BlackRock Pensions Limited DC Cash Fund. Transfers will be made within a six months period commencing 1st October 2007 and following the transfer, members will receive statement(s) from the new fund manager(s).
SBS members are encouraged to carefully consider their personal position, seeking independent financial advice if necessary.