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Gedling, Nottingham, NG4 4HF"},{"DocumentName":"Hedgerows, Bolsover","DocumentUrlPath":"/hedgerows-bolsover","Address":"Mooracre Lane, Bolsover, S44 6ER"},{"DocumentName":"Meadow View, Shirebrook","DocumentUrlPath":"/meadow-view-shirebrook","Address":"Meadow Lane, Shirebrook, NG20 8RY"},{"DocumentName":"The Parade, Bridgwater","DocumentUrlPath":"/the-parade-bridgwater","Address":"Bristol Road, Bridgwater, Somerset, TA6 4BP"},{"DocumentName":"Spirit Quarters, Coventry","DocumentUrlPath":"/spirit-quarters-phase-4-coventry","Address":"Milverton Road, Coventry, CV2 1GS"},{"DocumentName":"The Paddocks, Lightmoor Village","DocumentUrlPath":"/the-paddocks-telford","Address":"Lightmoor Village, Telford, TF4 3FQ"},{"DocumentName":"Central Park, Darlington","DocumentUrlPath":"/central-park-darlington","Address":"Haughton Road, Darlington, DL1 1DR"},{"DocumentName":"Elder Gardens, Newton Aycliffe","DocumentUrlPath":"/elder-gardens-newton-aycliffe","Address":"Off Middridge Road, Newton Aycliffe, County Durham, DL5 7BF"},{"DocumentName":"Lyme Gardens Phase 2, Stoke On Trent","DocumentUrlPath":"/lyme-gardens-phase-2-stoke-on-trent","Address":"Wellington Road, Stoke on Trent, Staffordshire, ST1 3QH"},{"DocumentName":"NorthBridge, Glasgow","DocumentUrlPath":"/northbridge","Address":"Pinkston Road, Glasgow, G4 0DD"},{"DocumentName":"Dominion, Doncaster","DocumentUrlPath":"/dominion","Address":"Woodfield Way, Doncaster, DN4 8FE"},{"DocumentName":"Suthers Court Phase 3","DocumentUrlPath":"/suthers-court-phase-3","Address":"Suthers Street, Oldham, Manchester , OL9 7EQ"},{"DocumentName":"Jessop Park, Bristol","DocumentUrlPath":"/jessop-park-bristol","Address":"William Jessop Way, Hartcliffe, Bristol, BS13 0RL"},{"DocumentName":"Oswald Place, Cheadle","DocumentUrlPath":"/oswald-place-cheadle","Address":"Ashbourne Road, Cheadle, ST10 1SA"},{"DocumentName":"Gynsill Gate, Anstey","DocumentUrlPath":"/gynsill-gate-anstey","Address":"Gynsill Lane, Anstey, Leicestershire , LE7 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Wakefield","DocumentUrlPath":"/evolve-wakefield","Address":"Cross Street, Hemsworth, Wakefield, WF9 4QP"},{"DocumentName":"Brearley Forge, Sheffield","DocumentUrlPath":"/brearley-forge-sheffield","Address":"Adrian Crescent, Sheffield, S5 8DL"},{"DocumentName":"The Sycamores, Stockton-on-Tees","DocumentUrlPath":"/the-sycamores","Address":"Off Bath Lane, Stockton-on-Tees, TS18 2DX"},{"DocumentName":"Liberty Glade, Houghton-le-Spring","DocumentUrlPath":"/liberty-glade","Address":"Off Blackthorn Way, Houghton le Spring, DH4 6JW"},{"DocumentName":"The Rise, Newcastle Upon Tyne","DocumentUrlPath":"/the-rise","Address":"Off Whitehouse Road, Newcastle upon Tyne, NE15 6EP"},{"DocumentName":"High View, Blaydon","DocumentUrlPath":"/high-view-blaydon","Address":"Off Elm Road, Blaydon-on-Tyne, NE21 5AW"},{"DocumentName":"Belgrave Place, Minster-on-Sea","DocumentUrlPath":"/belgrave-place-minster-on-sea","Address":"Belgrave Road, Minster-on-Sea, ME12 3EB"},{"DocumentName":"City's Reach, Hull","DocumentUrlPath":"/citys-reach-hull","Address":"Grange Road, Hull, HU9 4LQ"},{"DocumentName":"Riverbank View Phase 3, Salford","DocumentUrlPath":"/riverbank-view-phase-3-salford","Address":"Littleton Road, Salford, M6 6HX"},{"DocumentName":"Kestrel Gardens, Barnsley","DocumentUrlPath":"/Kestrel-Gardens","Address":"Off Carlton Road, Barnsley, S71 2AY"},{"DocumentName":"Millfields Park, Scarborough","DocumentUrlPath":"/millfields-park","Address":"Field Lane, Scalby, Scarborough, YO13 0QG"},{"DocumentName":"Cable Wharf, Northfleet","DocumentUrlPath":"/cable-wharf","Address":"Cable Wharf, Northfleet, DA11 9AA"},{"DocumentName":"Hoddings Meadow, Hodthorpe","DocumentUrlPath":"/Our-developments/Midlands-2/Hoddings-Meadow-Hodthorpe","Address":"Broad Lane, Hodthorpe, S80 4XD"},{"DocumentName":"Lyle Place, Bury St Edmunds","DocumentUrlPath":"/Lyle-Place-Bury-St-Edmunds","Address":"St Olaves Road, Bury St Edmunds, IP32 6RW"},{"DocumentName":"The Hawthorns, 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Keepmoat Pension Plan (“the Plan”) - Governance statement for defined contribution pension arrangements and Statement of investment principles

The governance statement available to download on this website has been prepared by the Plan’s Trustee to report on compliance with governance standards introduced under The Occupational Pension Schemes (Charges and Governance) Regulations 2015 and amended by The Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018.

These governance standards relate to defined contribution (“DC”) benefits, also commonly referred to as money purchase benefits.

An extract of the governance statement can be found below which includes:

  • details of the Trustee’s review of the default investment arrangement
  • details of the costs and charges incurred by members under the Plan
  • example illustrations of the impact on pension pots of these costs and charges (the illustrations have been produced in line with February 2018 guidance from the Department for Work & Pensions entitled “Cost and charge reporting: guidance for trustees and managers of occupational schemes”), and
  • details of the Trustee’s assessment of the extent these costs and charges represent value to members.

Also available to download on this website is the latest Statement of Investment Principles signed on 18 June 2020, which is being published in line with The Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 as amended by The Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018.  

………………………………………………………………………………………………………………………………………………………

Keepmoat Pension Plan - Extract of governance statement - Reporting period covered - 6 April 2019 to 5 April 2020

1.Introduction

  1. This statement has been prepared by the Plan’s Trustee (“the Trustee”) and reports on how the Trustee, during the reporting period, complied with the governance standards introduced under The Occupational Pension Schemes (Charges and Governance) Regulations 2015 and amended by The Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018 (“the Regulations”). 

2.Default arrangement

2.1   Details of the current default investment arrangement are set out in Appendix 1 of the attached Statement of Investment Principles, which sets out the Trustee’s investment objectives and the strategy of the Plan.  It was prepared in accordance with regulation 2A of The Occupational Pension Schemes (Investment) Regulations 2005. The Statement of Investment Principles was further updated after the reporting period and signed on 18 June 2020.

2.2   The Plan’s default investment arrangement is managed by Legal & General Investment Management (“LGIM”).  The default investment arrangement is a Lifestyle Strategy, which targets a normal retirement age of 65 and de-risks over a 10 year switching period prior to normal retirement age.

2.3   An analysis of projected pot sizes indicated that active members of the Plan are likely to view drawdown as a suitable route for accessing their pension savings, whilst deferred members are more likely to take a cash lump sum. Therefore, whilst capital preservation is important in the design of the default investment arrangement, the Trustee decided to target inflation-protected growth as pension savings will need to extend many years into the future.

2.4   During the reporting period the Trustee, with the support of its investment adviser, monitored the performance of the default investment arrangement strategy and the individual funds which make up the default investment arrangement.  The Trustee received investment monitoring reports for the 6 month periods to 30 September 2019 and then for the 6 month period to 31 March 2020.  In other quarters the Trustee reviewed past performance data published by LGIM.

2.5   No review of the structure of the default investment arrangement was undertaken during the reporting period.  The Trustee last undertook a comprehensive review of the structure of the default in December 2016.  This review took into account the profile and needs of the membership and led to the default investment arrangement being amended with effect from 20 June 2017.

2.6   After the reporting period the Trustee undertook a review of the default investment arrangement, during June 2020.  This review was completed in conjunction with the Trustee’s investment adviser and focussed on the degree to which the default investment arrangement and the range of alternative investment options remain suitable for the needs of members. As part of this review, the Trustee considered the membership profile of the Plan and undertook analysis to ascertain the potential needs of members. This analysis encompassed a review of the demographics of members (for example term to NRA and current investment choice), consideration of current and projected pension account values of members and what these factors may mean for the retirement income options selected by members. The review also considered the degree to which the investment options provided through the Plan had performed in line with their stated objectives.

2.7   The key conclusion arising from this review was that the default investment arrangement remains appropriate for the average Plan member. An investment strategy that targets inflation-protected growth is aligned to the members’ needs. The Statement of Investment Principles was updated to reflect the findings of the review and was signed on 18 June 2020.

3.Charges and transaction costs

3.1        Members bear charges deducted from the funds in which their DC benefits are invested.  The charges differ between the investment funds available.

3.2        All administration, communication and other costs associated with running the Plan are met by Keepmoat Limited.

Charges in relation to the default investment arrangement

3.3        The charges applied to members within the Plan are structured by the investment managers as an annual Total Expense Ratio (“TER”) which covers the cost of investment management.

3.4        The annual member-borne charge applicable to the default investment arrangement has been between 0.184% and 0.259%, depending on the point at which a member sits within the lifestyle strategy.  The weighting of funds held by the member are determined by the period to normal retirement age (“NRA”).

3.5        The charges for the individual investment funds used by the default investment arrangement were:

Fund

TER

LGIM Global Equity Fixed Weights (50:50) Index Fund

           0.184% p.a.

LGIM Dynamic Diversified Fund

0.392% p.a.

LGIM All Stocks Index-Linked Gilts Index Fund

0.100% p.a.

LGIM Investment Grade Corporate Bond – All Stocks – Index Fund

0.151% p.a.

LGIM Cash Fund

0.125% p.a.

 

3.6        The five LGIM funds which make up the default investment arrangement are also offered to members on a self-select basis.  There are no other investment funds offered through the Plan.

Additional transaction costs

3.7        In addition to the charges above, transaction costs are incurred in the day-to-day operation of the investment funds, e.g. in relation to an investment fund’s trades and switching between investment funds.  Transaction costs in particular will vary significantly depending on a fund’s investment remit and on the market environment. 

3.8        The Trustee approached LGIM to obtain details of any unreported costs incurred by members during the reporting period.

3.9        LGIM provided details of transaction costs incurred within the funds for the period 1 April 2019 to 31 March 2020.  It should be noted that a positive figure is where the transaction costs have been a drag on the fund and a negative figure is where transaction costs have actually resulted in a gain.  This may occur, for example, when buying an asset, the valuation price when placing the order might be higher than the actual price paid. This gain may offset other transaction costs resulting in a total negative transaction cost for the fund.

Investment fund

Transaction costs within fund (%)

LGIM Global Equity Fixed Weights (50:50) Index Fund

0.0118%

LGIM Dynamic Diversified Fund

0.1118%

LGIM All Stocks Index-Linked Gilts Index Fund

0.1099%

LGIM Investment Grade Corporate Bond – All Stocks – Index Fund

-0.0319%

LGIM Cash Fund

0.0034%

 

Notes from LGIM regarding the transaction costs:  This is the average cost incurred over the last financial year as a necessary part of buying and selling the funds' underlying investments in order to achieve the investment objectives. A proportion of these costs is recovered directly from investors joining and leaving the fund. In the case of shares, broker commissions are paid by the fund on each transaction. Transfer taxes and/or stamp duty may also be payable.  In addition, there is a dealing spread between the buying and selling prices of the underlying investments. Unlike shares, other types of investments (such as bonds, money market instruments, derivatives) have no separately identifiable transaction costs; these costs form part of the dealing spread. LGIM capture these costs using the implicit cost methodology set out in FCA rules and PRIIPs guidance. Implicit transaction costs have been calculated as the difference between the price at which a deal was struck and the mid-market price of an asset at the time the order was placed in the market.  Where the arrival price was not available, the implicit cost was calculated as the difference between the price at which a deal was struck and the mid-market opening price on the day of the trade. Where the mid-market opening price was not available, the mid-market previous closing price was used. Where the previous mid-market closing price was not available, a fixed fee was used to estimate the implicit costs of each trade.

 

For all funds which hold an investment managed by a third party, LGIM states "the transaction costs provided by the third party manager are represented in this report as an indirect external fund transaction cost. Legal & General cannot guarantee the accuracy, integrity or completeness of such third party data. The recipient understands and acknowledges that any third party data in the disclosure may contain inaccuracies and/or omission and may not be independently verified."

4.Cost & Charge Illustrative Examples

4.1     The Trustee has produced illustrations in line with February 2018 guidance from the Department for Work & Pensions entitled “Cost and charge reporting: guidance for trustees and managers of occupational schemes”.  These illustrations are set out below, and are designed to cater for representative cross-sections of the membership of the Plan. For each individual illustration, each savings pot has been projected twice; firstly to allow for the assumed investment return gross of the costs and charges of the fund the member is invested in and then again, but adjusted for the cumulative effect of the costs and charges of the fund.

4.2     To determine the parameters used in these illustrations, the Trustee has analysed the Plan membership data relevant to the reporting period of this statement and ensured that the illustrations take into account the following:

  • A representative range of real terms investment returns, including the lowest, the highest and the most popular (by number of members);
  • A representative range of costs and charges, including the lowest and the highest;
  • Representative pot sizes – for the Lifestyle strategy (the default investment arrangement) the following illustrations have been provided:
    • median pot size;
    • illustrative pot size of £10,000; and
    • illustrative pot size of £100,000.
  • Representative pot sizes – given the size of the Plan the median pot size for each self-select fund illustrated is deemed appropriate; and
  • The approximate duration that the youngest member using the fund would take to reach NRA.
    1.        The Trustee has determined not to include future contributions in these illustrations as it would be disproportionately burdensome, the Plan does not levy charges on contributions, and less than 6% of the Plan’s membership are active members of the Plan.

4.4        The illustrations are presented in two different ways:

4.4.1     For the default investment arrangement (the Lifestyle Strategy), the illustrations should be read based on the number of years until the member reaches their retirement age. This is because the underlying funds used and therefore the costs and charges changes over time and this is reflected in the illustrations.

  1. For the individual self-select funds, the illustrations should be read based upon the number of future years that a member expects to be invested in those funds.

Default investment arrangement (the Lifestyle Strategy)

This is the investment strategy that is used by the largest number of members in the Plan (either because they have selected this strategy or due to it being the default investment arrangement).

Years from taking benefits

Age: 26

Starting pot size: £24,500 *

Age: 26

Starting pot size: £10,000 **

Age: 26

Starting pot size: £100,000 ***

 

Before

charges

After

charges

Before

charges

After

charges

Before

charges

After

charges

0

£24,500

£24,500

£10,000

£10,000

£100,000

£100,000

1

£24,605

£24,524

£10,043

£10,010

£100,427

£100,097

3

£24,842

£24,597

£10,140

£10,040

£101,397

£100,396

5

£25,119

£24,705

£10,253

£10,084

£102,525

£100,836

10

£27,892

£27,059

£11,384

£11,044

£113,843

£110,445

15

£34,576

£33,240

£14,113

£13,567

£141,126

£135,674

20

£42,862

£40,833

£17,495

£16,667

£174,947

£166,666

25

£53,134

£50,161

£21,687

£20,474

£216,873

£204,737

30

£65,867

£61,619

£26,885

£25,151

£268,847

£251,506

35

£81,653

£75,695

£33,328

£30,896

£333,276

£308,958

                 

* This is the median pot size for the default investment arrangement

** This pot size is provided as a guide for members whose pot size is materially lower than the median

*** This pot size is provided as a guide for members whose pot size is materially larger than the median

LGIM Dynamic Diversified Fund

This fund incurs the highest costs by members within the Plan.

Years of membership

Age: 26

Starting pot size: £87,000 *

 

Before charges

After charges

0

£87,000

£87,000

1

£89,122

£88,670

3

£93,522

£92,106

5

£98,140

£95,675

10

£110,707

£105,215

15

£124,882

£115,706

20

£140,873

£127,243

25

£158,911

£139,930

30

£179,260

£153,883

35

£202,213

£169,226

* This is the median pot size for this fund

LGIM Global Equity Fixed Weights (50:50) Index Fund

This fund is the fund anticipated to have the highest future real terms investment returns.

Years of membership

Age: 26

Starting pot size: £40,000 *

 

Before charges

After charges

0

£40,000

£40,000

1

£41,756

£41,680

3

£45,503

£45,255

5

£49,586

£49,137

10

£61,469

£60,362

15

£76,201

£74,150

20

£94,462

£91,088

25

£117,100

£111,896

30

£145,163

£137,456

35

£179,952

£168,856

* This is the median pot size for this fund

LGIM All Stocks Index-Linked Gilts Index Fund

This fund is one of the funds anticipated to have the lowest future real terms investment returns and incurs the lowest costs by members within the Plan.

Years of membership

Age: 26

Starting pot size: £4,000 *

 

Before charges

After charges

0

£4,000

£4,000

1

£3,922

£3,915

3

£3,770

£3,751

5

£3,625

£3,594

10

£3,285

£3,229

15

£2,976

£2,902

20

£2,697

£2,607

25

£2,444

£2,343

30

£2,215

£2,105

35

£2,007

£1,891

* This is the median pot size for this fund

LGIM Cash Fund

This fund is one of the funds anticipated to have the lowest future real terms investment returns.

Years of membership

Age: 26

Starting pot size: £40,000 *

 

Before charges

After charges

0

£40,000

£40,000

1

£39,220

£39,170

3

£37,704

£37,561

5

£36,247

£36,018

10

£32,846

£32,433

15

£29,764

£29,204

20

£26,971

£26,297

25

£24,441

£23,680

30

£22,148

£21,323

35

£20,070

£19,200

* This is the median pot size for this fund

Notes to costs and charge illustrative examples

  1. Projected pension pot values are shown in today’s terms, and do not need to be reduced further for the effect of future inflation.  It is for this reason some funds show negative real growth
  2. Inflation is assumed to be 2.5% each year
  3. No further contributions are assumed to be paid
  4. Values shown are estimates and are not guaranteed
  5. Charges for each fund used in the illustrations are those outlined in this statement
  6. Illustrations have not been included for the LGIM Investment Grade Corporate Bond – All Stocks – Index Fund as only a single member has selected this fund and it does not have any outlying features (in terms of it not being the highest/lowest cost fund and not being anticipated to have the highest/lowest future real terms investment returns)
  7. The projected growth rates for each fund or arrangement are in line with those produced for the Plan’s 2020 Statutory Money Purchase Illustrations , and are as follows:

 

Fund

Assumed Investment Return

LGIM Global Equity Fixed Weights (50:50) Index Fund

7.0%

LGIM Dynamic Diversified Fund

5.0%

LGIM All Stocks Index-Linked Gilts Index Fund

0.5%

LGIM Investment Grade Corporate Bond – All Stocks – Index Fund

2.0%

LGIM Cash Fund

0.5%

5       Value for members

5.1   Regulations require the Trustee to assess the extent to which the charges and transaction costs borne by members represent good value. 

5.2   The charges and transaction costs borne by members cover the costs of providing the investment management services. All other charges, including the costs of administration services and communications are met by Keepmoat Limited.

5.3   An annual value for members’ assessment was undertaken as at 5 April 2020 with the assistance of the Trustee’s advisers.  Analysis was undertaken by Barnett Waddingham LLP and the findings set out in a report dated 29 May 2020.  The Trustee considered the report and confirmed its value for members assessment at a meeting on 4 June 2020.

5.4   The assessment considered in relation to investment services:

5.4.1          the range of investment options available and the design of the default;

5.4.2          the arrangements for monitoring the performance of the investment funds; and

5.4.3          the governance arrangements.

5.5   The Trustee concluded that the Plan offers excellent value in relation to the charges and transaction costs borne by members.

5.6   In reaching this conclusion, the Trustee recognised:

5.6.1          low cost does not necessarily mean better value;

5.6.2          a default investment arrangement which includes automatic de-risking as members approach retirement based on continual analysis of the membership profile remains in effect. The de-risking phase offers protection to members’ investments, in the event of an equity market downturn, as they approach retirement, in contrast to the previous default arrangement;

5.6.3          a suitable range of self-select funds are available to members;

5.6.4          monitoring processes of the default investment arrangement strategy and fund performance continue to remain in place; and

5.6.5          the Trustee has adopted a policy around Environmental, Social & Governance (“ESG”) issues and monitors how these are implemented with the investment manager.

5.7   In relative terms, the comparative charge for the Plan (i.e. 0.184% to 0.259% p.a. depending on where in the Lifestyle Strategy a member sits) is comfortably below the average charge of 0.42% p.a. identified for unbundled trust based schemes in the 2016 Pension Charges Survey (published by The Pension Regulator and Government Social Research in October 2017).

5.8   The assessment considered just those services for which members bear or share the costs.  Factors that were not considered but that add value include:

5.8.1          the services fully paid for by Keepmoat Limited, e.g. the administration and communication services, and the services of legal advisers, consultants and auditors;

5.8.2          the operation of the professional Trustee, with a duty to act in the best interest of members, which is paid for by Keepmoat Limited;

5.8.3          the Employer contributions available through the Plan; and

5.8.4          the operation of salary sacrifice for Employee contributions.

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