12 September 2013

Important changes to our pension lifestyle profile projections

We've reviewed the way we produce our projections for Lifestyle Profiles. As a result, we believe that the way we will now calculate the potential value of member benefits gives a more realistic view of how members' investments may grow and will further help to plan for their retirement.

What is changing?

Projections for members invested in Lifestyle Profiles will now take account of the lower potential returns expected as a result of the automatic switching process that takes place when the selected retirement date approaches. Although this may change the projection figure, it will not impact on the actual amount that a member will receive at retirement.

Who is affected and how will we communicate this change?

All members invested in a Lifestyle Profile will be impacted by this change.

This change will be communicated to members through a message included with their annual benefit statement. The message will be included in annual benefit statements issued for a period of 12 months starting from 22 September 2013. The wording that will be displayed in the message can be seen in the 'Member communication' section below.

Our new business and ad-hoc illustrations are also being changed, so any illustrations issued after 22 September will also show that future lifestyle switching has been taken into account.

Member communication

The following is the message that will be sent to all affected members:


If you are invested in a Lifestyle Profile it automatically moves your investment into lower risk funds as you approach your selected retirement date.

The lower risk funds that we switch you into have a lower potential for growth and we have now taken this into account when working out what your pension may be worth at retirement.

We explained in benefit statements and other projections that we may have given you in the past that they did not take these lower potential returns into account as they assumed that the fund(s) you were invested in would not change.

We have now changed the way we work out the value of your benefits at retirement to take these lower growth rates into account. This means that the estimated amount of your benefits at retirement is now lower than it would have been if we had not made this change. This appears in the tables entitled 'Projected benefits at your Selected Retirement Age' and/or 'Projected formerly protected rights benefits at your Selected Retirement Age'.

We believe that the way we are now working out the potential value of your benefits gives you a more realistic view of how your investment may grow and help you plan for your retirement."

Any questions about these changes?

If you have any questions regarding these changes, please speak to your usual Legal & General contact who will be happy to help you.