Annual statement by the chair of the trustee for the year to 5th April 2023
What is this Statement for?
It is important that you, as a member of the Scheme, can feel confident that your savings in The CR Smith Retirement Benefits Scheme (“the Scheme”) are being looked after and give good value.
Under legislation, certain governance requirements apply to defined contribution pension arrangements i.e., the requirement to prepare a yearly statement which describes how these governance requirements are met. This Statement sets out how we, the Trustee have managed the Scheme in the last year and what we aim to do in the coming year.
What’s in this Statement?
We have included information on the following areas in this Statement:
What were the highlights from the last 12 months?
We can confirm to you that:
The Trustee of the Scheme is C R Smith Glaziers (Dunfermline) Limited, the sponsoring employer of the Scheme, responsible for appointing and removing trustees. The directors are GJP Eadie and HC Eadie.
The Scheme is a wholly insured Scheme through Phoenix Life Limited offering with profits policies to each member. The insurer manages the Scheme on a day-to-day basis and attends to investment and administration of the Scheme’s benefits.
The Scheme design does not include “online” services, information or daily investment analysis of the Scheme’s with profits policies.
There were no changes in the Scheme in the last 12 months.
Whilst we did not conduct a review of the investment options during the year, we remain satisfied that the default arrangement and investment options has performed in line with our objectives.
There have been no changes to the investment options in the last year.
The investment returns produced by the funds were generally in line with the Scheme’s objectives. Phoenix Life Limited are regulated by the Financial Conduct Authority and obliged to treat the members of the Scheme fairly.
The insurer’s costs in delivering the Scheme’s investment and administration are met by the insurer’s adjustment of the monies allocated to you by way of bonus and policy charges. Phoenix Life Limited are regulated by the Financial Conduct Authority and obliged to treat the members of the Scheme fairly.
The Trustee has been unable to obtain a meaningful explanation of those charges.
The Employer pays the cost of the Scheme’s other administration, governance, and communications.
Each year we look at the costs and charges you pay as well as the range and quality of the services you pay for and see how they compare with the options made available by the Employer sponsoring the Scheme.
Phoenix Life Limited are regulated by the Financial Conduct Authority and obliged to treat the members of the Scheme fairly and adhere to their Principles and Practice and with profits governance.
We found that the Scheme gave value in the last year. Although there are no additional services similar to those available through pension providers such as NEST (which the sponsoring firm uses for new employees), the costs of provision of the With Profits pension scheme appear to us to be in line with other With Profits pension schemes.
We check that the administration of the Scheme has run smoothly over the year. During the period covered by this Statement:
It is important that we as the Trustee keep our knowledge of pension and investment matters up to date and have access to sound professional advice.
Overall, we believe that we have the right skills and expertise together with access to good quality professional advice so that we can provide appropriate oversight of the management of your Scheme properly.
During the last year we:
During the next year we aim to:
9. Assessment of the Scheme – Our assessment 5 April 2023
The Scheme gave average Value for Members in the year ended 5 April 2023. The rating criteria used in the assessment were:
|Excellent||The Trustee considers the Scheme offers excellent value for members, providing services within a top 20% quality/cost range compared with typical options for similar schemes.|
|Good||The Trustee considers the Scheme offers good value for members, providing services at better quality/cost compared with typical options for similar schemes.|
|Average||The Trustee considers the Scheme offers average value for members, providing similar services at similar quality/cost compared with typical options for similar schemes.|
|Below average||The Trustee considers the Scheme offers below average value for members, providing similar services at higher cost or more limited services for similar cost compared with typical options for similar schemes.|
|Poor||The Trustee considers the Scheme offers below average value for members, providing similar services at higher cost or more limited services for similar cost compared with typical options for similar schemes.|
The rationale for the rating of each service was in outline because the Scheme is designed to provide with profits investment returns only, with limited designed features for other related services.
Phoenix Life Limited administers the scheme’s investments, and provision of pension benefits and statements for Scheme on our behalf.
Core financial transactions
It is a legal requirement that we must monitor the Scheme’s core financial transactions during the last Scheme year which includes the following:
We have no service level agreement in place with the with profits provider.
This scheme predates the administrative concept of service level agreements that insurers would agree to. Such agreements tend to include the accuracy and timeliness of all administration work such as:
The Trustee utilises the sponsoring Employer’s finance team to liaise with Phoenix to ascertain that service standards are at least adequate.
We are conscious of the growing threat of cyber-attacks on pension scheme information.
We expect that the pension provider will report any security breach immediately and ensure that members are notified as soon as possible as it is required to as it is registered with the Information Commission’s Office in relation to holding person data.
We are satisfied that during the year:
Security of assets
The situation regarding the security of where pension contributions are invested is complex. It can vary from scheme to scheme and from fund to fund within each scheme. To date there have only been a few instances where members of schemes such as ours have seen their benefits reduced due to financial failure of a provider or fund manager.
We have faith in the With Profits Pension Provider adhering to its statutory obligations.
The Trustee identified the need to keep up to date with their pension training and have put monitoring processes in place to identify any areas that need improving over time. More information on the additional training the Trustee receive in the coming months will be detailed in next year’s Chair’s Statement.
With the help of our advisers, we regularly consider training requirements to identify any knowledge gaps.
All the Trustee Directors have access to copies of and are familiar with the current governing documentation for the Scheme, including the Trust Deed and Rules (together with any amendments). Any amendments to these documents are reviewed and approved by us. We refer to the Trust Deed and Rules as part of deciding to make any changes to the Scheme.
We are not satisfied that we have obtained full information on charges and transaction costs but are satisfied that the insurer would conform to its obligations as a with profits policy provider regulated and authorised by the Financial Conduct Authority. We also note the following limitations:
We understand that these issues currently affect many pension schemes and pension providers with insurers such as Phoenix Life. We hope the amount of information available should improve.
We hope this Statement is of help to you for your future. If you have any questions, please contact the Payroll Manager at CR Smith Gardeners Street, Dunfermline KY12 0RN.