Brexit – what leaving the EU may mean for your Plan savings

For members of the defined contribution (DC) Section of the Bank of America Merrill Lynch UK Pension Plan and/or the Bank of America UK Pension Plan (the Plans).

On Friday, 24 June 2016 the United Kingdom voted to leave the European Union. The result has directly impacted financial markets and if you are invested in longer-term growth funds such as equities, you may have seen a higher level of volatility in the value of your Plan savings.

The Trustee and the bank will continue to work with their advisers over the coming weeks and months to understand the longer-term implications of Brexit for the Plans and their members. In the meantime, please consider the following important details.

What you need to consider:

If you’re a long time from retirement…

Your savings in the Plans are a long-term investment. That means you should have time to weather the ups and downs of the financial markets. Making hasty decisions now could adversely impact your pension savings over the longer term.

Saving through the Plans also continues to be a tax-efficient way of saving for the future, subject to certain limits.

If you’re closer to retirement (from around 13 years before your Target Retirement Date)…

…and are invested in one of the Lifestyle options, your savings have begun or will begin to move into the Pre-retirement phase over the next few years. This means that your investments are being periodically switched from growth funds with higher investment risk into those that take less investment risk in the years leading up to your Target Retirement Date. Therefore, volatile financial markets have less of an impact on the value of your Plan savings.

…and are invested in Freestyle, the impact of the financial markets will depend on the specific funds in which you are invested. It’s therefore important that you regularly review your investment choices and ensure that you are taking the right level of risk for your personal circumstances.

Planning for your future

We encourage all members to consider:

• when and how you plan to access your savings,
• how you are currently invested, and whether this is right for your personal circumstances and retirement plans.

To see how you are invested, log on to Orbit, the Plan administration website:

• If you are logging on from inside your employer’s network, via SSO
• If you are logging on from outside of your employer’s network, go to Orbit here

Find out more about your investment options in the Plan Handbook.

If you’re considering making changes to the way your savings are invested during this uncertain time, we strongly encourage you to seek independent professional advice. Find out more through the Money Advice Service.

Monitoring events

As mentioned above, the Trustee and the bank will continue to work with their advisers over the coming weeks and months to understand the longer-term implications of Brexit for the Plans and their members. We will keep you up to date once we know more.

If you have any questions about your savings, please contact Capita, the Plan Administrators.