Investments
Investments
You may wonder what investments have to do with your pension and the answer is, a lot!
You pay money into your pension each month, along with contributions from Kraft Heinz. This money is then taken and invested into different funds, with the aim that your total Account will grow over time ready for when you want to retire.
The Trustees continually work with their advisers to decide which funds should be available to invest in. They take many things into account including, how risky the funds might be, the level of returns they could provide, the cost to invest in those funds and where those funds are investing their money to name just a few.
Retirement may seem a long way off, but it’s important to consider; when you think you might want to retire, how you might want to access your funds when you do and how much you think you might need to live off when retired, as these will all affect the investment decisions made.
You should ask yourself the following questions:
How do you want to access your Account when you retire?
When it comes to accessing your Account at retirement there are different options for you to consider. The main ones are:
At retirement you can transfer your Account to
a specialist drawdown arrangement and then take (i.e. ‘draw down’) as much as
you want from that arrangement whenever you want.
Or, you can take up to 25% of your fund as cash on a tax-free basis (under current
law), before taking the remainder as income which will be taxable at your
highest rate of income tax. Bear in mind though, if you choose to take a cash
sum, this will reduce the value of your retirement income.
If you transfer assets to a drawdown
arrangement, your funds remain invested which means that they have the
potential to continue to grow in value. This might be of benefit to you if your
chosen investments perform well, though you’ll need to think carefully about
how you invest your Account.
Drawdown puts you in control of your
retirement income so it’s important that you’re comfortable with the idea of
managing your money and deciding how much and when to draw down from your
Account.
You should also be aware of and accept the
risks that come with being in full control of your retirement income.
This option allows you to buy a guaranteed income (an annuity) with your Account. An annuity is a type of insurance policy and there are lots to choose from. You can invest in one or more types of annuities, so there is a lot to think about if you decide to go down this route. If you do, you’ll be offered free support as you approach retirement to help you decide what form to take it in.
You can also take up to 25% of the value of your Account as a tax-free cash sum and buy an annuity with the balance. Bear in mind though, if you choose to take a cash sum, this will reduce the value of your retirement income.
You can take all of your Account directly from the Plan as cash in one go. The first 25% will be tax-free (under current law) and the rest will be taxed at your marginal rate.
Be aware that the amount of cash you take may itself increase your marginal tax rate and, importantly, if you choose to take your full Account as a cash sum, you’ll need to find another source of income to fund your retirement.
With any of these options we strongly recommend that you take independent financial advice to help you make the right choice. Go to www.gov.uk/plan-retirement-income/get-financial-advice to get started.
Do you want to manage your investments yourself?
Once you’ve decided how you think you might want to access your Account at retirement, you need to consider how much responsibility you want to take for managing your investments yourself or if you feel more comfortable with these being managed on your behalf.
Retirement Pathways are pre-set investment strategies which automatically switch investments for you as you approach retirement, if you’re not comfortable doing this yourself.
There are 3 Retirement Pathways to choose from, based on how you think you want to access your Account at retirement:
- Retirement Pathway to Annuity
- Retirement Pathway to Cash
- Retirement Pathway to Drawdown
They initially aim to maximise growth in your Account while you’re a long way from retirement and as you get closer to your retirement age, moves your Account automatically from higher-risk growth investments into more ‘protective’ investments. The most appropriate investments will differ, depending on how you plan to take your benefits, and accordingly we will contact you five years before your chosen target retirement age to ask how you expect to take them in case this has changed.
If you don’t choose a specific option, you’ll automatically be invested in the Plan’s ‘default’ option, which is the Retirement Pathway to Drawdown.
The Self Select approach gives you ‘free rein’ over which funds you choose to invest in, from those made available by the Trustees. There are a number of Self Select funds to choose from. You can invest all of your Account in one fund or spread your investments across multiple funds. It’s up to you. You don’t need to be an expert on investments, but you should be comfortable making investment decisions. You should be prepared to keep a close eye on how your chosen investments are performing, as you may want to make a change if a particular fund isn’t performing as you expected.
For more information about investments and your options as part of the Plan, you can read our investment guide here.
We also produce an investment update each quarter, which shows you how each of the funds have performed in the previous quarter. Remember this is showing all the funds available and not just the ones you may personally be invested in.
You can view the latest investment report here.
The reports from previous quarters are also available:
When do you want to retire?
When you join the Plan, your policy will be set up with a target retirement age of 65, though you can change this if you wish.
Your target retirement age is only an indication of when you intend to retire. This information does not represent an undertaking by you and is strictly confidential.
If you’re invested in a Retirement Pathway, it’s important that you review your target retirement age from time to time and notify the Plan administrators as soon as possible if you want to change it.
Otherwise, the automatic fund switching that is a feature of the Retirement Pathways may start at the wrong time - too late, and you could end up being exposed to unnecessary risk or too early, and your investments may miss out on potential higher returns.
To check or update your target retirement age, you can log in to the member portal at portal.hartlinkonline.co.uk/heinzpensions
Keep up to date with your Account
Once your Account is being invested, whether you’re choosing your own investments options or have chosen a Retirement Pathway, it’s important to understand how your Account is performing and if you’re on track to receive the level of income you want at retirement.
Each year we send you a benefit statement. You’ll be notified when this is available to view in the online portal. This document is specific to you and your Account and shows you how your Account has performed over the year, and your projected income at retirement. We recommend you view this document when it becomes available and decide if you need to make any adjustments to your Account.
If you’re not already registered on the online portal, we recommend registering. You’ll be able to view and update your investments as well as update your contributions or contact details.
To register go to portal.hartlinkonline.co.uk/heinzpensions, click ‘Register’ and follow the instructions on screen.
Help and support
Investments and the decisions you need to make around them may seem daunting, but there is guidance and support available to help you make the right choices.
Visit our external sources of information page for a list of helpful sites that can provide you with more information about pensions and financial advice.