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The People’s Pension SchemeAnnual report and financial statementsFor the year ended 31 March 2015

For people, not profit

For the people, for life

The People’s Pension SchemeAnnual Report and Accounts28 June 2012 to 31 March 2013

1

The People’s Pension SchemeAnnual report and financial statementsFor the year ended 31 March 2015

At a glance 1

Chairman’s statement 2

Trustee, Directors and advisers 4

Trustee’s annual report 6

Governance Statement for The People’s Pension Scheme 10

Investments 11

Further information 14

Independent auditors’ statement about contributions to the Trustee of The People’s Pension Scheme 15

The People’s Pension Scheme summary of contributions for the year ended 31 March 2015 16

Independent auditors’ report to the Trustee of The People’s Pension Scheme 17

Fund account for the year ended 31 March 2015 19

Net assets statement as at 31 March 2015 20

Notes to the financial statements 21

Contents

The People’s Pension Scheme 1

At a glance

Award winningThe People’s Pension added a 5 Star Defaqto Rating to its list of awards, an award that recognised it as a quality automatic enrolment pension scheme.

Previous accolades for The People’s Pension and B&CE include ‘DC Provider of the Year’ and ‘Auto-Enrolment Provider of the Year’ at the UK Pensions Awards, ‘Best Master Trust Provider’ and ‘Best DC Master Trust Services’ at the Pension and Investment Provider Awards.

At the end of the financial year there were 1,315,517 members (2014 – 581,345) and 5,224 employer sections (2014 – 1,021) within the Scheme.

1,315,517members

5,224employer sections

£464.9m value of assets

At the end of the financial year, the Scheme had net assets with a total value of £464.9m (2014 – £86.5m). Contributions into the Scheme totalled £295.8m during the financial year (2014 – £76.1m).

1,398,235 workers enrolled

In total 1,398,235 workers had been enrolled into the Scheme since its inception (2014 – 614,691), of whom 5.6% (2014 – 5.9%) chose to opt out.

5.6%opt-out rate

Winner of Mastertrust Provider of the Year 2014

Winner of Best DC Mastertrust/Bundled Services 2013

Winner of DC Provider of the Year 2014

Winner of Auto-Enrolment Provider of the Year 2013

Awarded 5 Star Defaqto Rating for Auto-Enroment 2015

AUTO-ENROLMENT

STAR RATINGS

Annual report and financial statements for the year ended 31 March 2015 2

Welcome to the annual report and financial statements for The People’s Pension Scheme (’the Scheme’), which I am pleased to present on behalf of The People’s Pension Trustee Limited (’the Trustee’). The report covers the year to 31 March 2015, and is the Scheme’s third annual report following its launch in October 2012.

We have had another successful year – membership continues to increase and, to add to the industry recognition we earned last year*, we are proud to have received a 5 Star Defaqto Rating. The Scheme is now, measured by membership, the largest independent Master Trust in the UK.

Looking forward, pensions are now squarely in the public eye and will remain there for some time. The new freedom and flexibilities introduced by the Government’s March 2014 budget are now a reality and State pension reform completes with the launch of the new single tier State pension in April 2016. Auto-enrolment then enters its next phase and membership of The People’s Pension is set to continue to increase, as smaller employers start fulfilling their duties under the auto-enrolment regime. The increase in membership numbers will not be as rapid as we have seen, given that the majority of the national workforce has already been auto-enrolled. However, the increase in employers, many employing only small numbers, will be significant. That brings with it another set of administrative and governance challenges for the Trustee and the Scheme.

The People’s Pension has proved itself to be a cost efficient, simple, easy to use, quality solution to auto-enrolment. These characteristics have made it not only the provider of choice for the construction industry, but a whole spectrum of different industries and professions. I believe there are two key reasons for its success: excellent customer service, and the strength of our governance arrangements.

B&CE maintained very high standards of customer service during the year, including during critical points where auto-enrolment staging resulted in major surges in employers joining the Scheme. Since April 2015, there has also been considerable new activity with members looking to take advantage of the new pension freedoms. I was delighted to see that B&CE have been able to absorb this new activity without any detrimental impact on ‘business as usual’ activities.

Our strong trusteeship infrastructure is invariably attractive to employers, who are reassured by our independence and expertise, and by our commitment to high standards of governance. We are proud of being the first Master Trust to report on its governance and administration arrangements in accordance with the Institute of Chartered Accountants of England and Wales’ (ICAEW) new assurance framework for Master Trusts. We believed that The Pensions Regulator initiative was a positive thing for Master Trusts generally and we allocated resource to this project at the earliest possible opportunity.

The 5 star rating from Defaqto was, I feel, testimony to the hard work put in on The People’s Pension and the robustness of our approach. Defaqto is an independent financial research company focused on supporting better financial decision-making. Achievement of the highest rating indicates that The People’s Pension provides one of the highest quality offerings in the market.

Chairman’s statement

* DC Provider of the Year at the Professional Pensions UK Pensions Awards 2014. Best Master Trust Provider at the Pension Expert Pensions and Investment Provider awards 2014.

“We are proud to be the largest private sector Master Trust in the UK, providing pensions to people from all walks of life.”

Steve Delo


Auto-enrolment has become routine for the larger companies. It has been a nationwide success at this level and now the pensions industry and regulators/legislators want to make it a success for smaller employers, many of whom will never have touched pensions issues before. We are well placed to help them meet the challenges. In particular, we will be concentrating our efforts on developing new ways for members to engage with their pensions, and improving our existing communication channels. For employers and employees new to the concept of workplace pensions, strong support and excellent, instantly compelling communications will differentiate auto-enrolment solutions.

The Government’s overhaul of the pension taxation rules has now been introduced and we have already made changes to adapt to the new flexibilities and allow members greater choice as to how they access their funds. There is however more for us to do in the coming months. We have wanted to proceed at a sensible pace to ensure that all options we put forward are thought through and administratively reliable. As a Trustee Board we will be keeping a close eye on member behaviour in the new world and we will endeavour to make sure that members have the necessary options available to them to access their fund in ways that best suit their needs. It will also be a priority to implement our first full investment strategy review, which takes into account the changed pensions landscape. Our vision is for members having greater freedom whilst remaining consistent with our over-arching principles of value for money, simplicity and ease of communication.

Of course, with a new Government other policy changes may be made. We will ensure that, together with B&CE, we are flexible and agile enough to adapt quickly to any future changes, whatever they might be.

As we go from strength to strength, I would like to thank the staff at B&CE who administer The People’s Pension, for their continued hard work and dedication. The Trustee Board have seen first-hand that they put our members first in everything they do, maintaining exceptionally high levels of customer service. Without them, we would not be so strong.

Finally, I would like to thank my colleagues on the Board, Alan Pickering and Andrew Cheeseman. Between them, they have an unparalleled understanding of pensions and a knack for knowing what our employers and members want and need. They challenge everybody involved in The People’s Pension to do their very best and that sets a high bar. Over the next year, we want to push that bar even higher.

Steve Delo Chairman of The People’s Pension Trustee Limited

26 October 2015

Chairman’s statement (continued)


Trustee, Directors and advisers

Trustee

The People’s Pension Trustee Limited acts as corporate Trustee of the Scheme.

Directors of The People’s Pension Trustee Limited

The Directors of the Trustee are Steve Delo, Andrew Cheeseman and Alan Pickering.

Until 31 March 2015, PAN Governance LLP acted as corporate Director and was represented on the Board by Steve Delo and Andrew Cheeseman. This change was the first step in increasing the size of the Trustee Board – the intention is that the number of Trustee Directors will be increased to five later in 2015 in line with best practice for governance of Master Trust schemes. There have been no other changes to the Directors since the Trustee was incorporated.

Steve Delo Chairman

Steve Delo is Chief Executive of PAN Governance LLP and a former President of the Pensions Management Institute. His experience includes senior roles in consulting and asset management. Prior to joining PAN in 2008, he was co-founding Managing Director of an award-winning asset manager, where he pioneered manager selection and monitoring techniques and developed innovative governance frameworks for DC schemes.

He is a popular conference speaker and writes extensively on pensions matters, including the influential trustee opinion column in Engaged Investor, which he has written for the last seven years. During his career, Steve has won several individual professional awards – Business Presenter of the Year, Pensions Personality of the Year and Independent Trustee of the Year (twice – in 2010 and 2014).

Andrew Cheeseman

Andrew Cheeseman is founder and Chairman of the PAN Group and has been described in the press as ’a hugely effective, no nonsense independent trustee’. A prominent industry figure, he founded PAN in 1993, having previously held senior management and consulting roles in various major pensions businesses. PAN Group were named Independent Trustee of the Year at the 2013 and 2015 Professional Pensions UK Pensions Awards.

Andrew is also one of the few trustees in the UK who is regulated for the conduct of investment business by the Financial Conduct Authority.

Alan Pickering CBE

Alan Pickering has over 40 years’ experience across a wide variety of pension industry areas. He has sat on the board of a number of important industry bodies, including serving as chair of the National Association of Pension Funds (NAPF) and European Federation for Retirement Provision and, since 2005, has been a Board Member of The Pensions Regulator.

In 2002, Alan was appointed by the then work and pensions secretary Alastair Darling, to lead a review into simplifying the rules surrounding private pensions. The recommendations of his report, ‘A Simpler Way to Better Pensions’, formed an integral part of the Government’s 2002 Green Paper on pension reform.


Advisers and company information

Senior Management Team The day-to-day operation of the Scheme is the responsibility of the B&CE (see page 6).

Those currently serving on the senior management team at the signing date are:

Patrick Heath-Lay Chief Executive Officer Jamie Fiveash Chief Operating Officer Sam Stedman Director of Finance Rick Cole Director of IT Matthew Phillips Director of Risk and Regulatory Compliance Mark Plant Director of Strategic Delivery Michael Mann Director of Operations Zoe Wright Director of People and Premises Darren Philp Director of Policy and Market Engagement Roy Porter Director of Business Development

Secretary and registered office Paul Forster* The People’s Pension Trustee Limited, Manor Royal, Crawley, West Sussex, RH10 9QP

Scheme administrator B & C E Financial Services Limited

Bank HSBC Bank plc. 9 The Boulevard, Crawley, West Sussex, RH10 1UT

Independent auditors PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors, 7 More London Riverside, London, SE1 2RT

Investment managers Legal and General Investment Management Limited, One Coleman Street, London, EC2R 5AA

HSBC Global Asset Management (UK) Limited, 8 Canada Square, London, E14 5HQ

Investment advisers Barnett Waddingham LLP, Cheapside House, 138 Cheapside, London, EC2V 6BW

Solicitors Eversheds LLP, 1 Wood Street, London, EC2V 7WS

Trustee, Directors and advisers (continued)

* Replaced Sally Williams from 10 August 2015.


Trustee’s annual report

Introduction

The Trustee presents its third annual report on the Scheme, together with the audited financial statements of the Scheme for the year ended 31 March 2015.

Structure and governance

Building and Civil Engineering Holidays Scheme Management Limited (‘the Founder’) established the Scheme on 28 June 2012 to provide relevant benefits for such employees and connected persons of the Founder and other employers and such persons as may be permitted by HM Revenue and Customs (’HMRC’). The Scheme is a registered pension scheme for tax purposes under the Finance Act 2004.

The Founder is a company limited by guarantee and was incorporated on 21 November 1942. It has two subsidiaries, B & C E Insurance Limited and B & C E Financial Services Limited, which are collectively referred to throughout this document as ‘B&CE’. B&CE is the UK’s largest provider of financial benefits to the construction industry and has over 30 years’ experience in providing workplace pensions.

The Trustee was incorporated on 30 May 2012 (company number 08089267) and agreed to be the first trustee of the Scheme. The Trustee oversees the operation of the Scheme with a fiduciary duty to act in the interests of the Scheme’s members. In particular, the Trustee has a remit of safeguarding the Scheme’s funds and ensuring that the Scheme delivers good value for members. The Trustee has three Directors, as described on page 4.

Directors of the Trustee are appointed by the Founder for a term of up to 12 months. The Founder agreed to appoint the Directors for 12 months from 31 March 2015 at its meeting on 26 March 2015. The Directors have regular meetings to oversee the operation of the Scheme – including oversight of the Scheme’s investments and administration. The Trustee had four meetings during the 12 months to 31 March 2015. The meetings were attended by all Directors.

The Trustee appointed B & C E Financial Services Limited (‘the Administrator’) as administrator of the Scheme on 18 December 2012. The Administrator is responsible for the day-to-day operation of the Scheme including communication with members and processing contributions and allocations to members’ pension funds. A Service Level Agreement (’SLA’) is in place with the Administrator and a quarterly service report is provided to the Trustee, which includes details of whether these levels have been attained. The Administrator has agreed to pay all fees and expenses payable by the Scheme (excluding investment management fees) and receives an administration fee from the Scheme in respect of the services that it provides.

The Trustee uses a range of professional advisers to help support its activities. The Trustee periodically reviews its arrangements with advisers. There were no changes to the advisers during the year which are listed on page 5.

Audit and Risk

B&CE has an established Group Audit and Risk Committee, which reviews the effectiveness of all of B&CE’s systems and controls on behalf of the Founder’s board, including the operation of the Scheme. The Group Audit and Risk Committee’s work during the year has included:

• Reviewing reports from B&CE’s risk management function on the risks facing the business, along with any related, agreed actions,

• Reviewing internal audit work plan and reports,

• Meeting with B&CE’s Chief Executive Officer, internal auditors and external auditors to discuss systems and controls and any material weaknesses reported,

• Reviewing the effectiveness of risk management processes.

On 1 May 2014, the Institute of Chartered Accountants in England and Wales (‘ICAEW’) and The Pensions Regulator (‘TPR’) jointly issued good practice statements in relation to TPR’s 31 Defined Contribution quality features for Master Trusts. The standards are in the form of a controls report made by trustees, which will be independently verified by an ICAEW reporting accountant.

In September 2014, the Trustee published a report covering the description and design of its control procedures, meeting the 38 control objectives described in the standards. The People’s Pension was the first Master Trust to publish such a report and demonstrate that it met the standards.

The financial statements have been prepared and audited in accordance with regulations made under Section 41(1) and (6) of the Pensions Act 1995.


Membership

The Scheme’s first participating employer commenced their auto-enrolment duties in October 2012. A large number of employers have followed, both large and small, from a variety of sectors. At the end of the year there were 5,224 employer sections in the Scheme (2014 – 1,021).

The membership in the year from 1 April 2014 to 31 March 2015 was:

Members

Members as at 1 April 2014 581,345

- New members joining 782,759

- Members opting out (42,327)

1,321,777

Less

- Members transferred out (628)

- Members taking short service refunds (3,517)

- Cancellation of duplicate accounts (413)

- Claims (1,312)

- Members deceased / terminal illness (390)

Members as at 31 March 2015 1,315,517

- Active members 891,119

- Deferred members 424,398

Members as at 31 March 2015 1,315,517

In total 1,398,450 individuals have been enrolled into the Scheme since October 2012. Of the individuals who have been enrolled, 5.6% have chosen to opt out of the Scheme.

Financial summary

The financial summary for the year ended 31 March 2015 is provided in detail in the fund account shown on page 19.

Where an active member has an employer, both the employer and member are required to pay contributions for that member at a rate in accordance with the appropriate Deed of Participation. A payment schedule is prepared in respect of each employer’s section of the Scheme. The contributions paid by the employer in accordance with this rule must be paid by the due date specified in that schedule. The employer remits their contributions by submitting a contributions schedule to B&CE. If the Scheme is not in receipt of a contributions schedule and payment by the due date then the Trustee is required to consider reporting the breach to TPR. Members may make additional voluntary contributions to the Scheme if they so wish.

Contributions totalled £297.5m for the year (2014 – £77.0m). From these contributions, a total of £1.7m was refunded following members opting out of auto-enrolment (2014 – £0.9m). The net amount of £295.8m is shown in the fund account on page 19 (2014 – £76.1m). The Scheme can also accept transfers in from other schemes. A total of £45.9m was transferred into the Scheme during the year (2014 – £9.1m).

Trustee’s annual report (continued)



Member funds can currently be taken out of the Scheme in the following ways:

Retirement Members aged 55 or over can generally choose from the following options:

• Open market option: Up to 25% of the fund can be paid out as tax-free cash while the remainder is used to either purchase an annuity with an insurer to provide a guaranteed level of income for life, or enter into a flexi-access drawdown facility offered by a pension provider or insurer.

• Small pot withdrawal: Members with less than £10,000 can withdraw the entire fund as a small pot withdrawal. 25% of the withdrawal is tax-free and the remainder will be taxed at the member’s marginal rate.

• Flexible lump sums: The technical name for this option is an ‘uncrystallised funds pension lump sum’ and it allows members to withdraw all or part of their fund. The minimum flexible lump sum that can be taken is £2,000 and a partial withdrawal can only be taken when more than £10,000 will be left in the member’s account. 25% of the withdrawal is tax-free and the remainder will be taxed at the member’s marginal rate.

Prior to 6 April 2015 members were generally required to purchase an annuity in order to access their pension fund.

Transfers The Scheme can pay transfers out to other HMRC registered schemes which are able to accept a transfer in.

Deaths The Trustee will pay benefits to one or more persons in the event that a member dies before taking their money out of the Scheme. The Trustee can pay funds to a number of persons including relatives, dependants and member nominated beneficiaries.

The decision on the recipients is at the Trustee’s discretion but members are encouraged to complete an expression of wishes nomination.

Short service refunds Where an employer’s Deed of Participation allows it, a member can choose to take a refund of contributions in the event that they leave within two years of joining the Scheme.

Benefit payments out of the Scheme totalled £2.6m during the year (2014 – £0.2m).

For details of the Scheme’s investment performance, please see page 12. The increase in the market value of the investments for the year was £40.4m (2014 – £1.1m).

The Scheme levies a 0.5% annual management charge (’AMC’) on members’ total funds under management. This charge (less any investment management fees paid by the Scheme) is paid to the Administrator in respect of its services.

The AMC is waived for an introductory period for members enrolled by employers who were B&CE customers prior to 31 January 2012.

The Scheme’s assets as at 31 March 2015 were £464.9m (2014 – £86.5m).

Looking ahead

Over the coming year, new employers will continue to join the Scheme and enrol their employees as they reach their auto-enrolment staging date. The volume of employers joining the Scheme is likely to increase, potentially very significantly given the number of small employers that are due to stage in the final two years of the auto-enrolment timetable. The number of members joining will continue to grow significantly, albeit at slower rate given the size of the employers yet to stage.

B&CE will regularly review and look to improve the Scheme’s offering. In addition, the Trustee will continue to monitor the Scheme to ensure that members are receiving the highest levels of service and that their funds are sufficiently safeguarded and invested appropriately.

The Scheme has introduced additional options to allow members to access their funds from age 55 in April 2015 when the Government removed the requirement to purchase an annuity. B&CE and the Trustee will continue to review the options available for members and intend to provide a wider range of options to ensure that members can access their funds in a way that best suits their needs.


The priority for the Trustee in the coming months is to implement a new investment strategy following the introduction of the new flexibilities. The Trustee has been working with the investment adviser for a number of months to review the Scheme’s investment strategy. As the Scheme is relatively new, this means that the membership is relatively young and fund sizes are small. Given this, the Trustee felt it appropriate to take some time to carefully consider the likely impact of the changes and consult with key stakeholders.

The review has focussed on the suitability of the default strategy, and the ‘glidepath’ phase in particular. The intention is that the new strategy will be implemented in early 2016.

Trustee’s responsibilities in respect of the financial statements

The financial statements, which are prepared in accordance with UK Generally Accepted Accounting Practice, are the responsibility of the Trustee. Pension scheme regulations require the Trustee to make available to Scheme members, beneficiaries and certain other parties, audited financial statements for each Scheme year which:

• show a true and fair view of the financial transactions of the Scheme during the Scheme year and of the amount and disposition at the end of the Scheme year of its assets and liabilities, other than liabilities to pay pensions and benefits after the end of the Scheme year; and

• contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996.

The Trustee is responsible for supervising the preparation of the financial statements and for agreeing suitable accounting policies, to be applied consistently, making any estimates and judgements on a prudent and reasonable basis.

The Trustee is also responsible for making available certain other information about the Scheme in the form of an annual report.

The Trustee also has a general responsibility for ensuring that adequate accounting records are kept and for taking such steps as are reasonably open to it to safeguard the assets of the Scheme and to prevent and detect fraud and other irregularities, including the maintenance of an appropriate system of internal control.

Trustee’s responsibilities in respect of contributions

The Trustee is responsible under pensions legislation for securing that a payment schedule is prepared, maintained and from time to time revised showing the rates of contributions payable towards the Scheme by or on behalf of the employer and the active members of the Scheme and the dates on or before which such contributions are to be paid.

The Trustee is also responsible for keeping records in respect of contributions received in respect of any active member of the Scheme and for adopting risk-based processes to monitor whether contributions that fall due to be paid are paid into the Scheme in accordance with the payment schedule.

Where breaches of the schedule occur, the Trustee is required by the Pensions Acts 1995 and 2004 to consider making reports to the Pensions Regulator and to members.

Signed on behalf of the Trustee:

Steve Delo Chairman of The People’s Pension Trustee Limited 26 October 2015



Governance Statement for The People’s Pension Scheme

1. As Directors of The People’s Pension Trustee Limited, we have reviewed and assessed that our systems, processes and controls across key governance functions are consistent with those set out by TPR in their:

• Code of practice 13: Governance and administration of occupational defined contribution trust-based schemes

• Regulatory guidance for defined contribution schemes.

These are underpinned by the DC quality features.

2. Based on our assessment and subject to the explanations set out in point 3 below, we believe that we have adopted the standards of practice set out in the DC code and DC regulatory guidance. These help demonstrate the presence of DC quality features, which we believe will help deliver better outcomes for members at retirement.

3. Where we are seeking to achieve or maintain ‘best practice’ level, we explain this below.

We believe that The People’s Pension Scheme meets or exceeds all 6 principles and 31 quality features that TPR stipulates in its Code of Practice 13.

In co-operation with Chartered Accountants Crowe Clark Whitehill LLP, we have demonstrated 28 of the 31 quality features covered by the Audit & Assurance Framework AAF 02/07 Assurance Report (Internal Controls for Master Trusts). The format of the Report was designed by the Institute of Chartered Accountants in England & Wales on behalf of TPR. Our Report is as at 5 September 2014 and can be downloaded from: http://thepeoplespension.co.uk/wp-content/uploads/2014/12/4184.0914-AAF-Assurance-Report-V5.pdf

We will update our Report as at 31 March each year.

The remaining 3 quality features are listed below. They do not need to be independently audited and can be certified by the Trustee. The Trustee discussed the statements on 2 December 2014 and agreed that these were also met by the Scheme:

a) Trustees will ensure that schemes offer flexible contribution structures that give members the option to pay more.

b) Trustees will support employers in understanding their responsibilities for providing accurate information, on a timely basis, to scheme advisers and service providers.

c) Trustees will act in the best interests of all beneficiaries:

Steve Delo Chairman of The People’s Pension Trustee Limited 26 October 2015


Investments

Scheme’s investment objective

The Trustee’s key objective is to enable members to provide adequately for their retirement via an appropriate investment of their accumulated pension contributions.

Funds and investment risk

There are currently three investment profiles for members to choose from in the Scheme:

Balanced • Medium risk

• Potential for long-term growth with some security

• Moves to lower risk investments approaching retirement

• For members who prefer to take some risk but would also like some of their investments to be secure.

Cautious • Lower risk and volatility

• Moderate growth over the long-term


• For members who are prepared to accept some degree of risk, but who look for investments with lower volatility.

Adventurous • Higher risk and increased volatility

• Aims to maximise growth in the long term


• For members who are prepared to take on more risk for the potential for increased growth.

New members are automatically placed into the Balanced Lifestyle profile unless they choose otherwise.

There are two main stages in the Lifestyle profiles. When joining the Scheme, members with more than 15 years before their selected retirement age enter a growth phase where contributions are invested in an equity based fund with the aim of maximising potential investment return for an appropriate level of risk. Members then enter a ‘glidepath’ phase where assets are switched into a Pre-Retirement fund and a Cash fund, which have lower volatility. This phase starts 15 years before their selected retirement age.

How the glidepath works

Equity Fund

Pre-Retirement Fund

Cash Fund

100%90%80%70%60%50%40%30%20%10%0%

49 57 6553 6151 5955 6350 5854 6252Age

% o

f fun

d

6056 64


If a member does not wish to select one of the above investment profiles, there are also self-select options. Members can choose from the Scheme’s fund range themselves and, for self-select options, the funds will not be automatically switched into lower risk funds approaching retirement but can be moved between the investment funds only at the member’s request.

The Scheme has a range of passive investment funds for members to choose from. These are shown on the following page. The allocations shown are as at 31 March 2015.

There were no changes made to the investment strategy during the year. However, the Trustee did commence an investment strategy review following the introduction of the increased freedoms for DC pension members (as discussed in the looking ahead section). The Trustee plans to implement a new strategy in response to the changes in early 2016.

B&CE Global Investments (up to 85% shares) Fund • Used in the Balanced investment profile

• 40% UK equity, 40% global equity, 13% corporate bonds, 7% gilts.

B&CE Global Investments (up to 60% shares) Fund • Used in the Cautious investment profile

• 30% UK equity, 30% global equity, 27% corporate bonds, 13% gilts.

B&CE Global Investments (up to 100% shares) Fund • Used in the Adventurous investment profile

• 50% UK equity, 50% global equity.

B&CE Ethical Fund • A higher risk fund available in the Self-Select option

• Invests in companies that meet FTSE4Good ethical criteria

• 100% global equity.

B&CE Shariah Fund • A higher risk fund available in the Self-Select option

• Has an investment approach based on Islamic Shariah principles

• 100% global equity.

B&CE Pre-Retirement Fund • Used in the 15 year glidepath approaching retirement

• 60% corporate bonds, 40% gilts.

B&CE Cash Fund • Used in the 15 year glidepath approaching retirement

• Invests in short-term money markets such as bank deposits and treasury bills.

Investment managers

The funds in the Scheme are built from funds offered by leading investment managers. The Trustee currently invests assets with Legal and General Investment Management, with the exception of the Shariah Fund, which is invested with HSBC Global Asset Management.

The Trustee has delegated all day-to-day decisions about the investments that fall within each mandate, including the realisation of investments, to the relevant fund manager through written contracts.

Custodians for the underlying investments are appointed by the investment managers.

Investments (continued)


Investments (continued)

Statement of Investment Principles

The Trustee has prepared a Statement of Investment Principles (’SIP’) to comply with the Pensions Act 1995 and subsequent legislation. The SIP outlines the Scheme’s investment objective and investment strategy as well as outlining the governance structure.

The Trustee monitors compliance with the SIP annually. During the year, and at the year-end, all investments were in accordance with the SIP.

The Trustee will review the SIP at least every three years and immediately following any significant change in investment policy. The SIP is available on request (see page 14 for contact details).

Fund performance

The performance of the funds (net of the 0.5% AMC) during the year is shown in the table on the following page.

Overseas equity markets produced strong returns over the year, returning approximately 15% p.a. in local currency terms. These returns were even greater in sterling terms, largely due to the weakening of sterling against the US dollar.

Bonds performance was also strong over the year, with corporate bonds, fixed interest gilts and index-linked gilts all producing returns in excess of 10% p.a. Fixed interest gilts rose by approximately 14% over the year, whilst index-linked gilts rose by approximately 19%.

The funds track a variety of indices as described on page 13. The Trustee monitored the tracking error of the funds throughout the year and were satisfied with the performance against benchmarks.

Fund Fund performance

Benchmark performance

Benchmark

B&CE Global Investments (up to 60% shares) Fund

17.7% 17.5% 30% FTSE All-Share Index,30% FTSE AW – World (ex-UK) Index, 27% iBoxx £ Non-Gilts (ex-BBB) Over 15 Year Index, 13% FTSE A Government (Over 15 Year) Index.


15.3% 15.1% 40% FTSE All-Share Index,40% FTSE AW – World (ex-UK) Index, 13% iBoxx £ Non-Gilts (ex-BBB) Over 15 Year Index, 7% FTSE A Government (Over 15 Year) Index.


12.7% 12.6% 50% FTSE All-Share Index,50% FTSE AW – World (ex-UK) Index.

B&CE Ethical Fund 20.5% 20.5% FTSE4Good Global Equity Index.

B&CE Shariah Fund 22.7% 22.3% Dow Jones Islamic Titans 100 Index.

B&CE Pre-Retirement Fund 19.4% 19.3% 11.6% Markit iBoxx £ Non-Gilts Over 15 Years Index, 14.0% Markit iBoxx £ Non-Gilts (All Stocks) Index, 16.0% FTSE A Government (Over 15 Year) Index,16.1% iBoxx £ Non-Gilts (ex-BBB) Over 15 Year Index, 12.4% FTSE A Government (All Stocks) Index,5.4% FTSE A Government (5 to 15 Year index),6.0% Markit iBoxx Sterling Non Gilts BBB Index, 1.5% Single Stock Treasury 4.75% 7 December 2038 Gilt,4.5% Single Stock Treasury 4.5% 7 December 2042 Gilt,12.5% Barclays Capital Global Agg GBP Corp 5+ year Ex BBB Index.

B&CE Cash Fund 0.4% 0.4% 7 Day LIBID.


Further information

Contact us

Further information is available at www.thepeoplespension.co.uk

You can also contact us in the following ways:

Telephone: Existing employer customers and advisers: 01293 586666

Advisers: 01293 586637

New employer customers and advisers: 0800 612 8080 or 01293 586637

Employees: 0300 2000 555 or 0300 2000 444

Email: [email protected]

Post: The People’s Pension Trustee Limited Manor Royal, Crawley, West Sussex, RH10 9QP

The Pensions Regulator

The Pensions Regulator (’TPR’) is the UK regulator of work-based pension schemes.

TPR works with trustees, employers, pension specialists and business advisers to protect members’ benefits and encourages high standards in running pension schemes.

TPR is able to intervene in the running of schemes where trustees, providers or employers have failed in the duties.

Further information is available at www.thepensionsregulator.gov.uk

Pensions Ombudsman

The Pensions Ombudsman investigates complaints against, and disputes with, occupational and personal pension schemes. The Pensions Ombudsman is completely independent and acts as an impartial adjudicator. If members have a complaint or dispute, they should first try to resolve the issue through the Scheme’s complaints process.

Further information about the Pensions Ombudsman is available at www.pensions-ombudsman.org.uk

The Pensions Ombudsman can be contacted in the following ways:

Telephone: 020 7630 2200

Fax No. 020 7821 0065


Post: The Office of the Pensions Ombudsman 11 Belgrave Road, London, SW1V 1RB

The Pensions Advisory Service (TPAS)

If members have a problem or concern with any aspect of the Scheme pension arrangements, we suggest they talk firstly to their employer and then B&CE at the address shown above.

If they are not satisfied then they can contact The Pensions Advisory Service Limited (’TPAS’) for help. TPAS is an independent non-profit organisation that provides free information, advice and guidance on pension matters.

Further information is available at www.pensionsadvisoryservice.org.uk

TPAS can be contacted in the following ways:

Telephone: 0300 123 1047


Post: TPAS 11 Belgrave Road, London, SW1V 1RB

Pension Wise

Pension Wise is a free and impartial Government service, providing individuals with guidance on defined contribution pensions. Individuals who are close to or over 50 can book either phone appointments (with TPAS) or face-to-face appointments (at branches of Citizens Advice services).

Further information is available at www.pensionwise.gov.uk

Telephone: 0300 330 1001


Post: Pension Wise PO Box 10404, Ashby de la Zouch, Leicestershire, LE65 9EH


Independent auditors’ statement about contributions to the Trustee of The People’s Pension Scheme

Statement about contributionsDisclaimer of opinion

Because of the significance of the matter described in the basis for disclaimer of opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an auditors’ statement about contributions. Accordingly we do not express an opinion as to whether contributions have been paid in accordance with the applicable payment schedules.

Basis for disclaimer of statement about contributions

As explained in the summary of contributions on the following page, neither the Trustee nor we have been able to access the records of the participating employers to perform tests on the calculation and payment of individuals’ contributions as defined in the payment schedules.

What we were engaged to examine

The People’s Pension Scheme’s summary of contributions for the Scheme year ended 31 March 2015 is set out on the following page.

Responsibilities for the statement about contributions

Our responsibilities and those of the Trustee

As explained more fully in the statement of Trustee’s responsibilities, the Scheme’s Trustee is responsible for securing that a payment schedule is prepared, maintained and from time to time revised and for monitoring whether contributions are made to the Scheme by the employer in accordance with relevant requirements.

It is our responsibility to provide a statement about contributions and to report our opinion to you. Because of the matter described in the basis for disclaimer or opinion paragraph above, however, we were not able to obtain sufficient appropriate evidence to provide a basis for such an opinion.

This report, including the opinion, has been prepared for and only for the Trustee as a body in accordance with section 41 of the Pensions Act 1995 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an examination of the summary of contributions involves

Our examination involves obtaining evidence sufficient to give reasonable assurance that contributions reported in the summary of contributions have, in all material respects, been paid in accordance with the relevant requirements. This includes an examination, on a test basis, of evidence relevant to the amounts of contributions payable to the Scheme under the payment schedule and the timing of those payments.

We test and examine information, using sampling and other techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsLondon26 October 2015


The People’s Pension Scheme summary of contributions for the year ended 31 March 2015

During the year, the contributions payable to the Scheme were as follows: 31 March 2015 31 March 2014 £000 £000Required by the payment schedules Member contributions 133,011 33,822Participating employer contributions 162,753 42,301 Total contributions required by the schedule 295,764 76,123 Total (as per fund account) 295,764 76,123

The Scheme is a Master Trust with multiple employers not connected with B&CE. Contributions are payable by each participating employer in accordance with the payment schedules and Deeds of Participation which set out the earnings components on which contributions are based, and the different contribution rates payable by both the members and the employer (where applicable).

It is the responsibility of the employers to ensure that the correct contributions are paid over to the Scheme within the timescales agreed between the Trustee and the employers. Whilst the Trustee monitors that contributions are received from each participating employer and allocated to members’ accounts, the Trustee does not have access to the payroll records of the participating employers, and is therefore unable to confirm with certainty that amounts have been paid in accordance with the required payment schedules for the Scheme as applicable for each participating employer. The Trustee does however carry out limited monitoring of contribution accuracy using a risk based approach in line with TPR guidance. The Trustee continues to monitor the position and will respond to any updated guidance from TPR as appropriate.

Signed on behalf of the Trustee:

Director 26 October 2015



Independent auditors’ report to the Trustee of The People’s Pension Scheme

Report on the financial statements

Our opinion

In our opinion, The People’s Pension Scheme’s financial statements:

• show a true and fair view of the financial transactions of the Scheme during the year ended 31 March 2015, and of the amount and disposition at that date of its assets and liabilities, other than liabilities to pay pensions and benefits after the end of the year;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• contain the information specified in Regulation 3 of, and the Schedule to, the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996, made under the Pensions Act 1995.

What we have audited

The People’s Pension Scheme’s financial statements comprise:

• the net assets statement as at 31 March 2015;

• the fund account for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

In applying the financial reporting framework, the Trustee has made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Responsibilities for the financial statements and the audit

Our responsibilities and those of the Trustee

As explained more fully in the statement of Trustee’s responsibilities, the Trustee is responsible for the preparation of the financial statements and being satisfied that they show a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) (‘ISAs (UK & Ireland)’). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinion, has been prepared for and only for the Trustee as a body in accordance with section 41 of the Pensions Act 1995 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.


What an audit of financial statements involves

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (‘ISAs (UK & Ireland)’). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the Scheme’s circumstances and have been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the Trustee; and

• the overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the Trustee’s judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the annual report and financial statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsLondon26 October 2015

Independent auditors’ report to the Trustee of The People’s Pension Scheme (continued)


Fund account for the year ended 31 March 2015

Notes 31 March 2015 31 March 2014 £000 £000Contributions and benefits Contributions 3 295,764 76,123Transfers in 45,901 9,061Benefits 4 (2,609) (200) Net additions from dealings with members 339,056 84,984 Returns on investments Change in market values of investments 6 40,443 1,070Administration fees 5 (945) (54)Investment management fees (128) (23)

Net returns on investments 39,370 993

Net increase in the Scheme 378,426 85,977

Net assets of the Scheme as at 1 April 86,457 480

Net assets of the Scheme as at 31 March 464,883 86,457


Net assets statement as at 31 March 2015

Notes 31 March 2015 31 March 2014 £000 £000Assets and liabilities allocated to members Investment assets Pooled investment vehicles 6 453,236 75,764 Net current assets Current assets 7 12,447 10,775Current liabilities 7 (800) (82) 11,647 10,693 Total net assets allocated to members 464,883 86,457 Net assets of the Scheme as at 31 March 464,883 86,457

The financial statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustee. They do not take into account of the obligations to pay pensions and benefits which fall due after the end of the Scheme year.

The financial statements which comprise the fund account, the net assets statement and the related notes on pages 21 to 24 were approved by the Trustee on 26 October 2015 and signed on its behalf by:




Notes to the financial statements

1. Basis of preparation

The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996, and with the guidelines set out in the Statement of Recommended Practice, Financial Reports of Pension Schemes (revised May 2007).

2. Accounting policies

The following principal accounting policies which have been applied consistently have been adopted in preparation of the financial statements.

Pension contributions

Employer and member contributions remitted by the employers are accounted for on an accruals basis based on the pay period to which they relate. Refunds for members who opt out of the Scheme are accounted for in the period that the member gives notification of their intention to opt out.

Contributions made directly by members are accounted for on an accruals basis, which is normally when contributions are received from the members.

Tax relief on pension contributions

Where contributions are received under ‘relief at source’ arrangements, the Administrator currently advances any income tax credits at the time the contributions are received or committed and subsequently reclaims them from HMRC. Any tax relief in respect of members’ contributions is shown in the financial statements as member contributions.

Member benefits

Benefits payable to members are accounted for on an accruals basis from the date they are claimed.

Transfers in

Transfers into the Scheme are accounted for on an accruals basis.

Investment management fees

Investment management fees are accounted for on an accruals basis. They are calculated daily on the value of the investments and are payable quarterly in arrears.

Administration fees

An AMC is levied against members’ funds which is accounted for on an accruals basis and is calculated daily on the value of the investments at 0.5% per annum. The charge is reflected through a reduction in the unit price of the fund that the member is invested in and is received quarterly in arrears into the Scheme bank account from the investment manager.

The AMC is the only administration cost borne by the Scheme. All direct costs of administration, including fees payable to the Trustee Directors, are met by B&CE.

Some members will not be charged for up to 12 months if they are employed by a company which was an existing B&CE customer prior to 31 January 2012 and remains a customer of B&CE up to their staging date.

An administration fee is payable to the Administrator which is equal to the AMC described above, less any investment management fees and bank charges payable. Administration fees are accounted for on an accruals basis and are payable to the Administrator quarterly in arrears.

Investments

All investments are held in pooled accumulation funds and are accounted for at the dealing price reported by the investment manager at the year-end date.


Notes to the financial statements (continued)

3. Contributions

31 March 2015 31 March 2014 £000 £000Contributions from: Participating employers 163,682 42,815Less employers’ share of refund of contributions for members opting out (929) (514) 162,753 42,301 Members 133,768 34,248Less members’ share of refund of contributions for members opting out (757) (426) 133,011 33,822 295,764 76,123 The member contributions shown above are inclusive of any tax relief that is received from HMRC.

4. Benefits

31 March 2015 31 March 2014 £000 £000

Lump sum retirement benefits 707 58Transfer outs 501 14Death benefits to beneficiaries 149 5Short service refunds 1,252 123 2,609 200

5. Administration fees

The AMC deducted from members’ funds during the year totalled £1,073k (2014 – £77k).

The administration fee paid to the Administrator is calculated by taking the AMC and deducting any investment management fees paid directly by the Scheme. The administration fee totalled £945k for the year (2014 – £54k).

The People’s Pension Scheme

6. Investment assets

Value at Purchases Sales Change in Annual Value as at 31.03.2014 at cost proceeds market value mgmnt charge 31.03.2015 £000 £000 £000 £000 £000 £000 Pooled investment vehicles: 75,764 392,606 (54,504) 40,443 (1,073) 453,236 Represented by: Allocated to members 75,764 453,236Not allocated to members – – Total investments 75,764 453,236 31 March 2015 31 March 2014 The pooled investment vehicles are: £000 £000 B&CE Cash Fund 0% 296 171B&CE Cash Fund 0.5% 2,920 258B&CE Global Investments (up to 100%) Fund 0% 834 364B&CE Global Investments (up to 100%) Fund 0.5% 5,172 601B&CE Global Investments (up to 85%) Fund 0% 20,946 15,753B&CE Global Investments (up to 85%) Fund 0.5% 374,394 51,550B&CE Global Investments (up to 60%) Fund 0% 41 9B&CE Global Investments (up to 60%) Fund 0.5% 987 44B&CE Pre Retirement Fund 0% 3,161 2,733B&CE Pre Retirement Fund 0.5% 44,040 4,252B&CE Ethical Fund 0% 52 11B&CE Ethical Fund 0.5% 289 12B&CE Shariah Fund 0% 15 1B&CE Shariah Fund 0.5% 89 5 Pooled investment vehicles 453,236 75,764 The following investments comprised more than 5% of the assets of the scheme as at 31 March 2015. £000 %

B&CE Global Investments (up to 85%) Fund 0.5% 374,394 81B&CE Pre Retirement Fund 0.5% 44,040 10


23



7. Current assets and liabilities

31 March 2015 31 March 2014 £000 £000 Cash 2,127 2,593Contributions due from employers in respect of: Employers 5,510 4,966 Members 4,373 3,172AMC debtor 437 44 Current assets 12,447 10,775 Taxation Relief due from HMRC (56) (9)Contributions owed to employers (328) (15)Fees owed to the Administrator (320) (58)Sundry creditors (96) – Current liabilities (800) (82) Net current assets allocated to members 11,647 10,693

8. Related party transactions

There were no related party transactions during the year ended 31 March 2015 that require disclosure, except for the following:

• The administration fees amounting to £945k (2014 – £54k) mentioned in note 5 which is payable to B & C E Financial Services Limited.

• As explained on page 21, all fees payable to the Trustee’s Directors amounting to £80k (2014 – £68k) were met by Building and Civil Engineering Holidays Scheme Management Limited.

• Building and Civil Engineering Holidays Scheme Management Limited uses the scheme for its employees and employer pension contributions amounted to £688k (2014 – £69k).

For the people, for life1

The People’s Pension SchemeAnnual Report and Accounts28 June 2012 to 31 March 2013

B&CE is a not-for-profit organisation – we operate for the benefit of our members and their dependants. We were founded in the construction industry back in 1942. Now we offer a workplace pension, employee accident cover, employee life cover and employee healthcare.

We currently manage assets of over £2.6 billion, with more than three million members and over 18,500 corporate accounts.

For over 30 years, B&CE has provided workplace pensions to employers large and small. We’ve operated ways to automatically enrol employees into pension saving for over ten years.

In November 2011 we announced The People’s Pension, our flexible solution to help employers to comply with their automatic enrolment duties. It’s designed for people rather than profit and is suitable for any organisation in any sector.

The People’s Pension has won us a number of awards, including the Defaqto 5 Star Rating for auto-enrolment in 2015 and DC Provider of the Year at the UK Pensions Awards in 2014.

Information correct as at 31 August 2015.

To find out more, or to register:

www.thepeoplespension.co.uk

[email protected]

Or call us on: Existing Employer Customers & Advisers: 01293 586666 New Employer Customers: 0800 612 8080

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5The People’s Pension Trustee LimitedManor Royal, Crawley, West Sussex, RH10 9QP. Tel 0300 2000 555 Fax 01293 586801 www.bandce.co.uk

Registered in England and Wales No. 8089267. To help us improve our service, we may record your call.

For people, not profit

Documents

The People’s Pension Scheme Annual report and financial ... · The People’s Pension Scheme Annual report and financial statements ... 3 The People’s Pension Scheme Auto-enrolment