Taking a flexible income from your pension

Legal & General’s Mastertrust Pension Access Scheme (“Legal & General’s Mastertrust”) is a UK registered pension scheme. It’s sponsored by Legal & General and run by the Legal & General Mastertrust Trustees. The scheme is a trust based pension regulated by The Pensions Regulator and subject to HMRC tax laws. Legal & General’s Mastertrust is independent from your GSK pension. It's designed for members who may want to flexibly access their pension savings. Further information on the scheme is available on the Legal & General Mastertrust website.

The GSK Pension Plans Trustee has partnered with Legal & General to offer members a drawdown option at retirement. Based on the GSK pension, this option offers a low Annual Management Charge (AMC) of 0.05% a year (or £5 per every £10,000 invested every year), plus fund charges, which for the default fund with Legal & General’s Mastertrust is the Legal & General (PMC) Retirement Income Multi-Asset Fund at 0.31%.

If you’re invested in the GSK Lifecycle Drawdown option (the default option in the GSK Pension Plan), as you reach the end of this lifecycle your savings will move into the GSK Retirement Income Fund / GSK Cash Fund. See the GSK member booklet (pages 10-15) for details.

The GSK Retirement Income Fund invests in the same underlying assets as the Legal & General (PMC) Retirement Income Multi Asset Fund 3. So, the mix of funds that you're invested in if you transfer to Legal & General’s Mastertrust at that time will be the same.

For more on the investment options in Legal & General’s Mastertrust please read their Investment guide.

Please note if you transfer you may lose any protections you have with your GSK pension. You should speak to an independent financial adviser if you have any concerns. Advisers may charge for the advice they give.

If you decide to transfer your GSK pension savings to Legal & General’s Mastertrust you can:

• Take your pension savings as a lump sum. 25% of this is tax-free and the rest will be taxable as earned income.
• Take up to 25% of your pension savings as a tax-free lump sum, leaving the rest invested to use later.
• Take up to 25% of your pension savings as a tax-free lump sum, and at the same time, take an income or lump sums from the rest of your pot. Income or lump sums are taxable at your marginal income tax rate.
• If you have some savings left, you can use this to buy an annuity. This is a guaranteed income, paid to you for life or a fixed term.

For further detail on the investment options available to you in Legal & General’s Mastertrust please read their Investment guide.

Please note if you transfer you may lose any protections you have with your GSK pension. You should speak to an independent financial adviser if you have any concerns. Advisers may charge for the advice they give.

Unless you tell Legal & General otherwise, your pension savings will be placed into the Legal & General (PMC) Retirement Income Multi-Asset Fund 3 (the default option). This fund is designed for members wishing to drawdown an income from their pension. Once you’ve joined the scheme, you can change your investments at any time either online or over the phone. If you choose to change funds, then transaction costs may apply.

If you transfer, you should be aware of two charges that’ll apply:

1. Annual management charge (AMC): covers the cost of running your pension. It’s calculated daily and deducted once a month by selling units in your pension. The charge for this is 0.05% a year (or £5 per every £10,000 invested every year).
2. Fund management charge (FMC): covers the cost of managing the fund or funds you’re invested in. This charge is included in the unit price. Unit prices are calculated daily, and the charge is reflected in the value of your pension. The FMC you’ll pay depends on the fund you select. You can find a list of the charges for each of the funds available in Legal & General’s Mastertrust Investment guide.

All members, including those who've left GSK and who still have their GSK pension, can transfer their savings. This is a special arrangement as individual members aren’t usually able to join a Mastertrust scheme.

No.

Before transferring, you should read through the Frequently Asked Questions and visit Legal & General’s Mastertrust website for more information.

To start your transfer, you’ll first need to complete an online quote request form.

Once you’ve completed your online quote request form, Legal & General will send you an illustration and application form.

If at this stage you’d like to continue, you can then complete the application form and return this to Legal & General.

Legal & General will then begin the process of transferring your GSK pension savings across.

No. The GSK Pension Plan does not allow members to transfer part of their savings to another scheme and leave some behind.

Yes. You can transfer from Legal & General’s Mastertrust to another suitable registered pension scheme, but you cannot transfer back into the GSK Pension Plan, nor can you transfer back into the Legal & General’s Mastertrust if you leave.

No. Once you’ve transferred your savings out of your GSK pension, you cannot transfer back.

Yes, once you have joined and transferred your GSK pension savings to Legal & General’s Mastertrust you can then transfer other pension savings from elsewhere too. Before transferring you should consider taking financial advice.

No, but you cannot take more than what is available in your pension account.

Yes, so long as the amount of tax-free cash you take does not exceed your 25% cap. With drawdown, you can take a tax-free lump sum of up to 25% of the amount within your pension. You can take this as either as a full lump sum or smaller lump sums.

No. If you transfer across to Legal & General’s Mastertrust and want to take your 25% tax-free cash straight away, you’ll need to request this on your application form.

If you have any protected benefits, they could be lost if you transfer to Legal & General’s Mastertrust. You should speak to an independent financial adviser if you have any concerns. Advisers may charge for the advice they give.

Yes. Only 25% of your pension savings are payable to you tax-free. When you take further cash sums they are treated as income and will be taxed at your marginal rate of income tax.

For more information on tax, see Legal & General’s Mastertrust Member booklet.

Drawdown is an option that’s already available to you if you have a SIPP with Legal & General, but the fees and charges are different.

If you have a Legal & General SIPP you can sell your shares and transfer the proceeds across into Legal & General’s Mastertrust, combining all your savings into one place. Please note, the SIPP has a different range of investments when compared with the Mastertrust. You can refer to the GSK Pension member booklet for more about the SIPP and your options within the GSK Pension Plan.

The Trustees of Legal & General’s Mastertrust have discretion on who to pay the value of your pension savings to when you die. However, you can complete a nomination of beneficiary form to tell the Trustees who you’d like any money to go to. However, the Trustees aren’t bound by this. A nomination of beneficiary for the Legal & General Mastertrust will be different to any nominations you’ve made for your GSK pension. There may be tax implications and the value of your pension will depend on your age at death and how you have chosen to take your benefits.

Legal & General’s Mastertrust may not be suitable:

• If you’re not ready to retire yet. Drawdown is for members who are ready to retire and would like to take their pension as a flexible income (also known as flexi-access drawdown).
• If you have other contractual benefits, that you’re not able to transfer across, such as the right to protected tax-free cash or a protected retirement age. You should speak to an independent financial adviser if you have any concerns. Advisers may charge for the advice they give.

Deciding how and when you’d like to take your pension is one of the biggest financial decisions you can make. It’s important to consider if you need financial guidance and advice.

Pension guidance

If you’re 50 or older, free and impartial pension guidance is available from Pension Wise as part of MoneyHelper, provided by the Government. Guidance is available online or over the phone.

Financial advice

If you need personalised advice from a financial adviser, you can find a list of advisers from:

• MoneyHelper
• Unbiased

No. The GSK Pension Plans Trustee is not suggesting that drawdown is suitable for members, nor is it recommending this scheme specifically with Legal & General. Drawdown is one option available at retirement. There are many pension providers offering drawdown. You can transfer your GSK pension savings to a suitable pension provider of your choice. Please refer to the GSK Pension member booklet to read more about the GSK Pension Plan.