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Your guide to investment choicesBabcock Retirement Savings Scheme (BRSS)Part of the Babcock International Group Pension Scheme

Looking after your future, today.

As a member of the Scheme you can choose where your contributions are invested.

This guide sets out the options available to you and points you should consider.

As your circumstances change, your priorities and views may change as well so you should regularly review where your contributions are invested and whether you are still on target to attain your goals. You will receive a statement each year to help you do this and you can access your savings fund online at any time and model different assumptions, such as changing your contribution rate or changing your target retirement age.

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Contents

Overview 4

Planning for Retirement 5

Lifestyle Strategy Funds 6

Self Select Funds 8

What else do I need to consider? 11

More details are available at www.myoneday.co.uk

My guide to InvestmentsLooking after your future, today 3

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Your Pension Pot

Target Flexibility

Self Select Funds

Target Lump Sum

Default

Option 4

Option 2 Option 3

Target Annuity

Overview

The investment options available are designed to give you a range of choice and flexibility. If you only want to make limited decisions about your investments, there are a number of ready-made strategies for you to consider.

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Planning for Retirement

But you don’t have to take a pension at retirement…

From April 2015 the government allows members aged 55 or over to take their benefits in a number of ways:

With all this flexibility you need to consider what you want to do in retirement and how you aim to achieve it.

The first step is always to make sure you are paying the right amount of contributions to balance what you can afford now and what the size of your potential savings fund may be at retirement. The online planner will help you with this.

But then how do you invest your contributions? The Scheme provides you with different fund options but you can also change your investments at any time.

The following pages give you a summary of the funds available and their aims.

To help you make plans for your savings there is an online planner available and you’ll also receive a statement every year so you know how much you have saved and what your estimated pension at retirement may be.

Option Description

Pension Purchase

At retirement you can take your fund and purchase a guaranteed, regular income from an insurance company. You can also take up to 25% of your fund tax free before purchasing the annuity.

Single cash lump sum

You can take your entire fund as a lump sum, the first 25% of which is tax free, with the remainder being taxed at your marginal rate of income tax.

Ad Hoc or regular lump sums

You can take a series of lump sums (at a time to suit you). The first 25% of each lump sum is tax free, with the remainder being taxed at your marginal rate of income tax. The remainder of your fund will continue to be invested until you have withdrawn all your funds.

The above options are available from this Scheme (although you can transfer your fund to another provider before making these choices if you wish).

Lump sum and flexible drawdown

You can take up to 25% of your fund as tax free cash at retirement and then the remainder can remain invested and be drawn as and when required. However, each withdrawal is subject to tax at your marginal rate of income tax.

This option is only available if you transfer your fund to another provider. A financial adviser will be able to help or you can speak to Aviva.

Lifestyle Strategy Funds

Lifestyle funds aim for a good level of growth in the early to mid-stages of saving for retirement, e.g. from joining BRSS to around 10 to 15 years before retirement. As you approach your target retirement age (which you can change at any time) your investments will gradually be moved automatically from growth type funds to other funds to help protect your money, reduce volatility and closely match how you want to take your benefit at retirement.

Normally we will assume your target retirement age is 65 unless you tell us otherwise.

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Why would I choose a Lifestyle Strategy Fund?Lifestyle helps to take the time and effort out of managing your investments because your savings fund automatically invests in growth funds when you are younger and then switches to less risky funds as you approach retirement. If you feel uncomfortable managing your own investments or don’t have the time then a Lifestyle Strategy Fund may suit you.

There are three Lifestyle Strategy funds available depending on how you are likely to want to access your money at retirement. You can only invest in one Lifestyle Strategy at a time:

How your funds are invested in this ‘lifestyle’ option

100%

75 %

50 %

45 35 25 15 5 0

25 %

0 %

Target Lump Sum

FL Global Equity (BIGPS) FL Diversified Growth (BIGPS) FL Money Market (BIGPS)

100%

75 %

50 %

45 35 25 15 5 0

25 %

0 %

Target Flexibility

FL Global Equity (BIGPS) FL Diversified Growth (BIGPS)FL Target Level Annuity (BIGPS) FL Money Market (BIGPS)

100%

75 %

50 %

45 35 25 15 5 0

25 %

0 %

Target Annuity

FL Global Equity (BIGPS) FL Diversified Growth (BIGPS)FL Target Level Annuity (BIGPS) FL Money Market (BIGPS)

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Lifestyle Strategy funds

Target Lump Sum Target Flexibility Target Annuity

Characteristics This will initially invest in the Global Equity Fund before gradually switching to the Diversified Growth Fund 20 years before your target retirement date.

5 years before your target retirement date your fund will start to switch some contributions into the Money Market Fund so at retirement you are invested in the Money Market Fund and the Diversified Growth Fund.

This will initially invest in the Global Equity Fund before gradually switching to the Diversified Growth Fund 20 years before your target retirement date.

5 years before your target retirement date your fund will start to be switched into the Money Market Fund, the Diversified Growth Fund and the Target Level Annuity Fund.

This will initially invest in the Global Equity Fund before gradually switching to the Diversified Growth Fund 20 years before your target retirement date.

5 years before your target retirement date your fund will start to be switched into the Money Market Fund and the Target Level Annuity Fund.

Aims The overriding aim is to build up a suitable sized fund for those members who are likely to want to take all their benefits as a cash lump sum at retirement.

The overriding aim is to build up a suitable sized fund for those members who are likely to want to gradually draw down their benefits over a long period during retirement whilst keeping their funds invested. Some of the fund can be taken as a cash lump sum before doing this.

The overriding aim is to build up a suitable sized fund for those members who are likely to want to purchase an annuity at retirement. Some of the fund can be taken as a cash lump sum before doing this.

Who is it likely to be suitable for?

If you invest in this fund there is an assumption that you will take all your money as a cash lump sum at retirement.

If you invest in this fund there is an assumption that you will draw down on your investments over your retirement in a flexible way to suit your circumstances.

If you invest in this fund there is an assumption that you will purchase an annuity at retirement.

If you do not choose a fund your money will be invested in the Target Lump Sum Lifestyle fund. You can change this at any time by logging onto the website and changing your investments or by contacting the Scheme Administrator.

If the Lifestyle Strategy funds don’t quite meet your requirements, or you want to take more control of your investments, you may be interested in the Self-Select funds available within the scheme.If you decide to invest in one of the Lifestyle funds you can’t invest in self-select funds at the same time.

Self-Select Funds

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How does it work?Self-Select allows you to invest in any combination of the available funds below. This approach is more suited to confident investors and you should be aware of the investment risks involved in the different funds and seek independent financial advice if you are unsure.

Why would I choose Self-Select?Self-Select gives you more control and allows you to choose from any combination of the available funds. You can also choose how much of your existing fund and future contributions you want to allocate to each fund.

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Name of Fund Characteristics Aim Who is it likely to be suitable for? Volatility

Growth Funds

FL Emerging Market Equity (BIGPS)

This fund is wholly invested in shares of companies which operate in emerging market economies. It has the potential to produce strong returns but can also be volatile – more so than the Global Equity fund. Investments are spread over a range of underlying funds and countries so performance should be less volatile than that of a fund invested in a single country.

To produce strong long-term returns by investing in emerging market equity funds.

Typically members who have some way to go before retirement (at least 10 years) and can therefore absorb the risks of equity market volatility.

Members who are willing to accept more investment risk in the anticipation of receiving strong long- term returns may find this fund attractive.

It is not usually considered suitable for those members approaching retirement because investing equities can be volatile in short periods and your fund may increase or decrease sharply.

Highest

FL Global Equity (BIGPS)

This fund is wholly invested in shares of companies across the globe and has the potential to produce strong returns but can also be volatile. Investments are spread over a range of company shares and countries so performance should be less volatile than that of a fund invested in a single country or company.

To produce strong long-term returns by investing in global equity markets.

Typically members who have some way to go before retirement (at least 10 years) and can therefore absorb the risks of equity market volatility.

Members who are willing to accept more investment risk, in the anticipation of receiving strong long- term returns may find this fund attractive.

It is not usually considered suitable for those members approaching retirement because investing equities can be volatile in short periods and your fund may increase or decrease sharply.

Medium to High

FL Stewardship The fund aims to provide exposure to an ethically screened portfolio of assets whilst growing the value of your account.

It will mainly be invested in the shares of UK companies. The ethical screening criteria of the fund will mean that its investments are more restricted than a non-ethical fund.

The objective of the fund is to generate long term capital growth.

Typically members who have some way to go before retirement (at least 10 years) and can therefore absorb the risks of performance volatility.

Members who want to invest in a range of company shares which have been selected for their sustainable business approaches and ethical criteria may find this fund suitable

It is not usually considered suitable for those members approaching retirement.

Medium to High

Self-Select Funds continued

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Name of Fund Characteristics Aim Who is it likely to be suitable for? Volatility

Growth Funds

FL Diversified Growth (BIGPS)

This fund invests in a diversified range of asset classes such as equities, property, commodities and fixed interest securities.

The different mix of investments means your investment is spread across assets that are expected to behave differently from each other with the aim of reducing overall volatility.

Long term growth may not be as high as the global equity and emerging market funds but returns should be less volatile.

emerging market funds but returns should be less volatile.

It is most likely to be suitable for members who are prepared to sacrifice some long term expected return when compared with the equity funds in exchange for smoother year on year performance.

Medium

Approaching Retirement Funds

FL Target Increasing Annuity (BIGPS)

The fund invests in UK Index-Linked Gilts.

This fund aims to generate a return which is consistent with the changing cost of purchasing an annuity at retirement which increases each year in line with inflation.

This fund is likely to be suitable for members who are planning to purchase an increasing annuity at retirement.

Typically members would invest for the long term in one of the growth funds and then switch gradually to this fund as they approach retirement – say 5 to 10 years before.

Low to Medium

FL Target Level Annuity (BIGPS)

The fund may invest in fixed-income securities, cash, deposits and money market instruments.

This fund aims to generate a return which is consistent with the changing cost of purchasing an annuity at retirement which does not increase each year.

This fund is likely to be suitable for members who are planning to purchase a non-increasing annuity at retirement.

Typically members would invest for the long term in one of the growth funds and then switch gradually to this fund as they approach retirement – say 5 to 10 years before.

Low to Medium

FL Money Market (BIGPS)

This fund may invest in cash, cash deposits, money market instruments and fixed income securities.

The fund aims to achieve a return that is in line with short-term interest rates and to provide short-term liquidity.

This fund is unlikely to generate substantial returns but will protect your fund value. It is therefore likely to be suitable for members who are planning to take all ora portion of their benefits as cash at retirement.

Typically members would invest for the long term in one of the Growth funds and then switch gradually to this fund as they approach retirement – say 5 to 10 years before

Lowest

* the annual management charges for these funds are available on the scheme website.

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What else do I need to consider?

Charges

As a member of BRSS an amount will be deducted from your account over the year to pay for administration, investment management and the running of the Scheme. The amount deducted depends on which funds your contributions are invested in and can change but details of the current charges are available on the Scheme website.

Next stepsNow you’ve read this guide think through the following points:

• How much am I currently paying?

• Can I afford to pay more? – do I need to pay more?

• Log online to see your account and model what age you’d like to retire and how much you need to contribute

• Have you a target retirement age in mind?

• At retirement are you likely to take all your benefits as cash? Purchase an annuity or gradually drawdown on your account as and when you like?

If you start to answer these questions you can begin to plan:

• When to retire

• How much to contribute

• Where to invest your contributions

Risk and Return

Investing for a pension in the future is all about seeking to obtain the highest returns in the long term but you need to decide how much risk you are willing to take to get there. Funds with low levels of volatility, like the approaching retirement funds, are usually associated with low potential returns whereas funds with higher levels of volatility, such as the growth funds, are usually associated with higher potential returns.There are various risks associated with investment. For example if you invest in overseas shares but the value of the overseas currency falls against the pound this may affect the return on investment.

The two key risks though are capital preservation i.e. trying to make sure your personal fund doesn’t decrease too much if investments fall and inflation risk i.e. trying to make sure your investments grow faster than the rate of inflation so their value increases in real terms.

The range of funds available under the Scheme is designed to mitigate these risks.

Changing your investmentsOnce you’ve made a decision you aren’t stuck with it. You can change your investment choices at any time by logging onto your account and following the instructions or contacting the Scheme Administrator. From time to time the Scheme may introduce or change investment choices and you may wish to change your choices then.

There is no charge for changing your investments.

Please note that the Trustee will regularly review the investment choices available to members and has the ability to change the underlying managers, structure, operation and charges of each fund. Any changes can be made without prior notice but you will always be informed if you are affected.

Financial adviceThe Trustee of the Scheme, your employer and the Scheme administrator are not allowed to give you financial advice by law. If you are unsure about the investment decisions you may make you should speak to an independent financial advisor (IFA). You can find details of IFAs in your area by visiting www.unbiased.co.uk.

Produced by the Trustee of the Babcock International Group Pension Scheme

Date: November 2017

Contact Details

Aviva Pixham End Dorking Surrey RH4 1QA Email: babcock@aviva.co.uk

Telephone: 0345 604 4463

The helpline is open from 8:30 to 17:30, Monday to Friday.