Please note that the information given in this Notice is factual and does not take account of your personal circumstances. It does not constitute advice that you join the Plan; you are invited to read the literature and make up your own mind on the information provided. Parasol PLC has appointed ParasolFinancials, who are Independent Financial Advisers, to set up the Plan and provide ongoing administration and consultancy. They can answer your factual questions and are also available as a source of impartial advice. If you are not certain whether this Plan is suitable for your circumstances, you should seek expert advice from them.

This Notice gives you some details of the proposed Plan but should you consider taking up the offer of membership a personal illustration and Key Features document (this is a document that outlines the key aspects of the contract) will be provided to you giving details of the estimated benefits of the Plan.

How do I join and what type of pension is it?

The scheme is a Personal Pension and uses Norwich Union as the provider. It consists of individual schemes for each investor within a single wrapper of the Parasol Group Personal Pension Scheme allowing for easy administration and low charges. Joining the scheme is very straight forward and further information can be requested by emailing advice@parasolfinancials.com. Once your happy to proceed you can then join by telephone, email or by simply posting back a single sheet application form and Norwich Union will then issue you with your own personal policy documents.

How much can I invest?

Contributions into the group scheme are by way of a salary sacrifice arrangement. You elect to forgo salary and Parasol will transfer these funds into the pension for you without deductions for income tax, Employees or Employers National Insurance.

Your contributions can be deducted on a monthly or weekly basis, depending on how you invoice. Subject to maintianing the minimum wage, your expenses and you covering your Parasol fees, you are free to invest all other income into the pension representing a potentially very significant tax saving and a highly efficient way of getting money into personal hands without tax deductions.

The total pension investment should not exceed the following levels:

Annual Allowance - £225,000 for tax year 2007/08
Lifetime Allowance - £1.6 million for tax year 2007/08

When you decide to take your pension benefits your fund is tested against the lifetime allowance and please note that in the unlikely scenario that it would exceed the current level, a tax charge of 25% is levied against any benefits taken as a pension and 55% for any taken as a cash lump sum. Any contribution over the annual allowance would result in a 40% tax levy being applied.

In addition to the salary sacrifice arrangement you can personally contribute (ie from your own savings or 'net' income via your private bank account) up to 100% of your UK net relevant earnings (salary) into a pension scheme. This additional investment qualifies for income tax relief at your highest marginal rate of income tax but attracts no National Insurance savings.

Keeping you informed

Before joining the pension scheme you will be provided with an illustration of your projected benefits.

On the anniversary date, a Statement of benefits will be sent to you, keeping you up-to-date on how your contributions are being invested and the value of your Plan.

Other pension plans

Whilst you are a member of this Plan you may contribute personally (ie from your net income) to certain other pension plans provided that you dont exceed 100% of gross salary (nb pensionsable salary is the figure after deduction of expenses, Parasols fees , employers NI figure and any money transfered to the in-house pension).

It is important to note that these personally funded investments will NOT avoid the employer/employee national insurance deductions on your salary and its is almost certain that they will be far less tax efficient than the Parasol group scheme.

The Parasol group scheme can accept transfers in from other pension schemes and these will be accepted with no set up costs whatsoever. Because the Parasol scheme has such low charges you may be able to reduce costs on funds built up previously elsewhere and the advisers will be happy to look at the merits of you amalgamating your investments.

Retirement Age

The scheme retirement age is set at 65, but you may elect to receive benefits at any age between 55 and 75 (50 before April 2010) without penalty, whether you retire or not.

You do not have to start taking your pension at the selected retirement age.

Stakeholder Pensions

The Parasol pension scheme is not a Stakeholder pension because we preferred to give a wider investment choice than is achievable within the constarints of Stakeholder but admin costs are very low. It is a Group Personal Pension and there are no set up costs whatsoever and ongoing annual management charges are 1% of the fund on most funds which is below the Governments cap on Stakeholder charges of 1.5%. Your investment is therefore free from the heavy charges that are so often a feature of older style plans.

Please also note that there are no charges levied by Norwich Union in the event of the transfers into or out of the pension.

What are the admin charges?

There are no set up costs whatsoever and of each £100 paid into the Plan £100 would be used to purchase units in your chosen fund or funds. There is no 'spread' between the buying and selling price of the units.

The Parasol Group Personal pension scheme has ongoing annual management charges of 1% of the fund on most investments, which is below the Governments cap on Stakeholder charges of 1.5%. Your investment is therefore free from the heavy charges that are so often a feature of older style plans.

Please also note that there are no charges levied by Norwich Union in the event of the transfers into or out of the pension.

What happens if I am unable to work due to sickness or accident?

If you were to become seriously ill or disabled and unable to work, your pension would suffer if contributions could not be maintained.

You should consider protecting your contributions and therefore your future retirement prospects by taking out an income protection (PHI) policy.

This policy is invaluable for those without the benefit of a large company employee benefits package as it can also be used to provide an income to help fund day to day household bills and help maintain your current standard of living.

ParasolFinancials would be happy to provide advice on this subject by emailing phi@parasolfinancials.com

What happens if I die prematurely?

In the event of your death before retirement the full value of the accumulated fund will be paid to your dependants. You may nominate a specific person(s) to receive this benefit by completing an 'expression of wish' form for Norwich Union.

What happens if I leave the Company?

The pension is written in your own name and if you leave Parasol you could potentially continue to contribute directly to Norwich Union.

There are three alternatives after leaving the service:

  • You can continue to make payments into your pension. A direct debit instruction will be sent to you if you wish to take this option or you may be able to get a new employer to fund the plan on your behalf.
  • If you do nothing your policy will be made "Paid Up". This means that no contributions will be payable to the policy, but the fund will continue to be invested. It is possible to restart contributions after making your policy paid-up at any time in the future.
  • You may elect to take a transfer value to another approved pension scheme. However we would strongly advise that professional advice is sought before any such action is taken and ParasolFinancials would be happy to help.

The value of your fund at the date of leaving is dependent on the contributions paid, investment returns and charges to date.

What happens when I retire?

The pension you will receive on retirement will be determined by the accumulated capital value of your investment and the level of annuity rates (i.e. the rate at which capital can be converted to pension) available at that time. It is impossible to predict the amount of your eventual pension as there are unknown factors; the personal illustration that you will be supplied with gives an idea as to the possible level based on certain stated assumptions.

When you decide to draw the benefits you may then choose how the pension is payable; for example, you may decide to include a pension payable to your spouse on your death. You will also be able to receive up to 25% of your accumulated fund as a tax free cash sum.

Where appropriate you have the option of avoiding buying an annuity or alternatively can engage in 'unsecured pension' where the fund remains invested up to a maximum age of 75 with you simply taking an income directly from the fund. At age 75 you can either buy an annuity at this time or engage in 'alternatively secured pension' and subject to a tax charge the funds can remain invested with you takingan income from the fund.

Such decisions do not need to be made until you retire and ParasolFinancials will be happy to provide advice at that time if required.

Where is the money invested?

Your money can be invested in a selection of stock market, bond and property funds from across the globe, all within the very low charging structure associated with a Stakeholder pension.

The choice of ivestments will be supplied with your personal Illustration and ParasolFinancials will be happy to recommend a suitable portfolio of funds to reflect your attitude to investment risk.

It is important to note that past performance is no guarantee of future returns and the value of units within your pension can fall as well as rise.

Who can join the Plan?

Membership of the Plan is open to all employees of Parasol Ltd.