New Enhancements to Scottish Widows Corporate Pensions Proposition

Scottish Widows is launching two new enhancements to its Corporate Pensions proposition, allowing for improved variety and versatility, and giving advisers and employers the possibility of offering tailored pension solutions designed to meet the needs of individuals.

Scottish Widows's Salary Exchange tool is the only one in the marketplace to offer scheme specific bulk calculations. Specifically designed for the Corporate Pensions market, the tool aids advisers and employers to communicate the benefits of salary exchange, and demonstrate the different ways available to take advantage of the employer and employee National Insurance contribution savings which result from a Salary Exchange agreement. In addition to its bulk calculation functionality, our calculator can produce pre-populated letters for each individual employee. These letters, which are scheme specific and detail exactly how salaries will change, can be used to allow employees to opt-in to the exchange, and act as the change to their contract of employment.

John Taylor, Market Director, Corporate Pensions at Scottish Widows, says In the current economic climate, Salary Exchange can be a cost-saving option for both employers and employees. It allows employees to save towards their pension with little impact on their take-home salary, which should provide that extra incentive to save. The addition of the Salary Exchange tool further strengthens our overall Corporate Pensions proposition, and allows us to demonstrate once again that Scottish Widows is constantly evolving and bringing to market new propositions for the benefits of advisers, employers, and employees.

The addition of share dealing to the Scottish Widows Self Investment Option, and the option to roll over shares from SAYE schemes and share incentive plans and transfer non-monetary assets, allows members of Scottish Widows company pension schemes greater investment choice and control when it comes to managing their pension. Provided through the Scottish Widows Retirement Account*, the Self-Investment Option is available as an add-on to the member'ss group pension, and users can continue to use their standard group pension and contribute towards their Self Investment Option when they wish. Other features of the Scottish Widows's Self Investment Option include access to an extended fund range and to a panel of discretionary fund managers as well as the option to invest directly in UK commercial property.

John Taylor, Market Director, Corporate Pensions at Scottish Widows, continues The addition of new Self Investment Option features to our overall Corporate Pensions proposition demonstrates that we are committed to strengthening and maintaining our competitive position in the market. With new benefits such as a share dealing platform and the ability to make in-specie contributions, members that make use of the Self Investment Option will find that they have greater control, choice and freedom than with a standard company pension. Our Corporate Pensions customers require a greater degree of customisation from their provider, and our Self Investment Option can be tailored to meet their needs exactly.

Visit Scottish Widows now to find out more about our pensions, life insurance (http://www.scottishwidows.co.uk/), pension calculator (http://www.scottishwidows.co.uk/individual_pensions/guides_and_tools/pension_calculator.html), retirement accounts (http://www.scottishwidows.co.uk/extranet/retirement/retirement_account.html) and individual savings accounts (ISAs) (http://www.scottishwidows.co.uk/investments/individual_saving_accounts/index.html)

Notes to editors:

This item is for professional adviser use only and should not be relied upon by any other person.

* Scottish Widows Retirement Account won five-star Defaqto awards in 2007, 2008 and 2009 for SIPPS.

Scottish Widows Self Investment Option Features:

A leading fund supermarket

A panel of select discretionary fund managers,

Direct investment in a UK commercial property.

From Q1 - Execution Only share dealing platform

From Q1 - In specie contributions

Once the Self Investment Option has been set up, it offers the following benefits:

Good online functionality

Transparency of charges.

Member confidentiality - employer does not have access to Self Investment Option

Flexibility - Customers continue to use their standard group pension (e.g. GPP) and pay into Self Investment

Option any time they like as and when required.

Greater control, choice and freedom than standard company pension

Salary Exchange Options

An employer can set up a salary exchange arrangement in a number of ways, however reinvesting the employer National Insurance Contribution savings will give the employee the most benefit and may encourage scheme take-up. The 4 main options are detailed below:

Option 1 - Employer costs stay the same, employee'ss take home pay stays the same and the pension contribution increases. With this option, the position remains cost neutral for both parties and all the employer'ss and employee'ss NIC savings are reinvested into the pension scheme so the overall contributions are increased.

Option 2 - Employer reduces cost, the employee'ss take home pay increases and pension contributions remain at same level. With this option, none of the employer'ss or employee'ss NIC savings are reinvested in the pension scheme, but the employee pays less NIC on a reduced salary, which increases their take home net pay.

Option 3 - Employer reduces cost, the employee'ss take home pay stays the same and pension contributions increase. With this option, the employee sacrifices a slightly higher amount to produce exactly the same take home pay. Because they'sve exchanged slightly more, their pension contribution increases. In this example none of the employer NIC savings are reinvested

Option 4 - Employer costs stay the same, the employee'ss take home pay increases and the pension contribution increases. In this option, only the employer'ss NIC saving is reinvested, resulting in a higher pension contribution. The employee'ss take home pay increases as they are paying less NIC on a reduced salary.

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