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January 2018
Pension Plan
Pensions Post
From the Ladbrokes Pension
Plan (the Plan) Trustees
What’s inside?
Focusing on your pension 4
The Plan’s accounts 7
Investment update 8
Pension news 9
Useful information 10
Welcome to your latest
edition of Pensions Post
The newsletter is our first one following the merger of
Ladbrokes and Gala Coral in November 2016. It has been
a time of great change and excitement at the Company as
plans are formed for the future of the merged business.
As a consequence of the corporate changes, there has also
been considerable change on the Trustee Board. Since
the last newsletter there has been a number of trustee
resignations and we would like to express our sincere
thanks to Adrian Bushnell, Charlie McAulay, Liz Cockburn
and Chris Lynch for the commitment and professionalism
they brought to the board over varying lengths of time.
Their contribution has been instrumental in helping us to get
the Plan into good shape.
The professional chair of the Plan, HR Trustees Limited,
stood down as a Trustee from 26 October 2017 and thanks
are extended to Mark Fletcher and Kevin Kenneally for all the
work that was completed while Chair of Trustees of the Plan.
The corporate strategy of the merged company is to have
a single Trustee board across both the Ladbrokes and
Gala Coral pension schemes. Therefore going forward the
Trustee of the Plan will be a corporate trustee called the
Ladbrokes Coral Group Pension Trustee Limited.
Previously, this company was called Gala Coral Pension
Trustee Limited and the Directors continue as Directors of
Ladbrokes Coral Group Pension Trustee Limited with Paul
Plowright joining as a Director from 26 October 2017.
2
The Trustee Directors are:
Company-nominated
Since the last Pensions Post we
Stephen Carlisle have had a number of updates on
Chair, Independent Trustee the funding position, including the
(Capital Cranfield Pension Trustees Limited) completion of the 2016 triennial
Stephen Carlisle was appointed as the Chairman of valuation, and these are included
the Trustee board from December 2012. He has been on page 5.
a pension scheme Trustee since 1996 and the board The Plan’s investment strategy
benefits from his extensive knowledge of pension maintains an appropriate balance
scheme investment policy, funding and governance. between return-seeking assets
Stephen is a Professional Trustee at Capital Cranfield and lower risk assets that match
Pension Trustees Limited and holds the position of the projected pension payments.
chairman on a number of pension trustee boards. You can find out more about the
Jim Noakes investment strategy on page 8.
Jim is Head of Strategic Development for the The coming year promises to be
Compliance Operations team in Woking which an interesting time due to Brexit
supports the Ladbrokes Coral Digital Division. He and the outcome of this year’s
chaired the Trustee board of the Coral Pension Plan general election which may limit
prior to the merger in 2008. Following the merger the amount of pensions legislation
of the Gala and Coral Plans he was appointed as that will be introduced. There will
a company-nominated director. also be some changes due to the
introduction of the General Data
Simon Reynolds
Protection Regulation (GDPR)
Simon is the Retail Compliance Director for
from May 2018 and this is looked
Ladbrokes Coral and is based in Stratford. Simon
at in greater detail on page 9.
joined the Company in 1992 and started as a
company-nominated director in 2011.
Neal Young
Neal was Group HR Director for the Gala Coral Group
and led the merger of the Coral and Gala plans and
has extensive knowledge of those schemes. Neal
is also Chairman of Trustees for an independent
Gibraltar based pension scheme. Neal has over 20
years’ main board experience with a number of large
Leisure, Gaming, Education & Catering companies.
Neal was appointed as a company-nominated
director in 2008.
Member nominated
John Kerr
John is Property Director of Ladbrokes Coral Group
and has been with the Company since 2004. He was
appointed as a member-nominated director in 2013.
Paul Plowright
Paul is Area Manager for Ladbrokes Coral Group in
the West Midlands. Paul joined Ladbrokes in 1993,
and was previously a member-nominated director for
Ladbrokes Pension Plan from 2003 to 2017.
3
Focusing on your pension
A recap on how the Plan works
The Plan is a defined benefit pension arrangement. What do we mean?
This means that members’ pensions are based Plan Actuary
on service with Ladbrokes and salary before they
Actuaries are qualified professionals who use
stop building up benefits in the Plan (or until the
their knowledge and experience to advise on
Plan closed to the future accrual of benefits as at
how long pensions are likely to be paid for, and
31 August 2015). To pay for the cost of providing
the costs of providing them.
these benefits, employee members and their
employers paid contributions. With the help of Assets
our investment advisers, the Trustees invested
These are all the monies that the Trustees hold
these contributions in funds, which are expected
for the Plan. They include investments, such as
to provide income and to increase in value over
shares, bonds and bank balances.
the long term – see investments on page 8. The
combination of contributions, investment income Funding target
and growth is then used to pay the benefits as they This is the amount of assets that, in the
fall due. The assets of the Plan are held in a trust Trustees’ opinion, the Plan should hold in order
fund out of which all members’ pensions are paid to pay all pension benefits that have been built
by the Trustees. The fund is a common fund for all up to date, having taken the advice of the Plan
members. Assets are not held in separate funds for Actuary.
each individual member.
Funding position
How do we work out how The funding position of the Plan is a
much money is needed to pay comparison of the assets and the funding
target on a specific date.
pensions?
The Plan Actuary advises the Trustees on how much Shortfall
money is likely to be needed in the Plan to pay This is where the value of the Plan’s assets is
for all the pensions as they fall due. This estimate less than the funding target.
is called an ‘ongoing valuation’. This valuation is
usually prepared and reviewed every three years, Surplus
with approximate updates each year in between. This is where the value of the Plan’s assets is
In preparing this ongoing valuation, the Trustees and more than the funding target.
Ladbrokes Coral Group, with the assistance of the
Plan Actuary, decide upon a number of assumptions
about what might happen in the future, in particular:
how long the members are anticipated to live;
what inflation (future price increases) will be; and
what investment returns the Plan will earn on
its assets.
The Trustees also check how much it would cost
if the members’ benefits were transferred to an
insurance company who would then pay the
pensions. This is called a ‘solvency valuation’ and is
more conservative than the ongoing valuation.
4
What is the Plan’s funding position?
The Plan’s funding position goes up and down over time as market conditions change. The most recent full
valuation undertaken was as at 30 June 2016 with a subsequent funding update as at 30 June 2017.
A summary of the funding positions as at 30 June 2015, 2016 and 2017 are shown in the table below.
30 June 2015 30 June 2016 30 June 2017
Funding target £363 million £380 million £382 million
Market value of assets £367million £412 million £440 million
Surplus £4 million £32 million £58 million
million
£500
£32 £58
£4
£400
£300
£200 £380 £412 £382 £440
£363 £367
£100
£0
30 June 2015 30 June 2016 30 June 2017
Funding target Market value of assets Surplus
5How has the Plan’s financial Coral Group to pay further contributions to the Plan.
The next full valuation will be as at 30 June 2019
position changed between
and Ladbrokes Coral Group’s contributions will be
30 June 2016 and 30 June 2017? reviewed as part of this.
The surplus on the ongoing basis as at 30 June 2016
was £32 million. Between 30 June 2016 and How are my benefits protected?
30 June 2017, the position on the ‘ongoing’ basis
improved by £26 million, giving a surplus of £58 million. Pension Protection Fund
The purpose of the Pension Protection Fund
The main reasons for the improvement in the
(‘PPF’) is to ensure that members of defined benefit
position since the 2016 valuation are favourable
schemes receive pensions where their company
investment returns exceeding the increase in the
goes out of business. The PPF is not intended to
Plan’s liabilities and the contributions paid by
replicate a member’s pension, but aims to ensure
Ladbrokes Coral Group.
that, in the event of a scheme’s sponsoring employer
being unable to meet its responsibilities, members
What if the Plan has to wind up? will receive a minimum level of benefits, although this
Ladbrokes Coral Group and the Trustees do not minimum may be less than members would have
intend to wind up the Plan. We do however monitor otherwise received from the Plan.
the impact on the Plan should Ladbrokes Coral
There’s more information about the PPF on their
Group no longer be able to support the Plan. In this
website – go to www.pensionsprotectionfund.org.uk
event, a wind-up of the Plan is likely to begin and the
responsibility for paying members’ pension benefits The Pensions Regulator
would be transferred to an insurance company.
The Pensions Regulator aims to help protect
On the more prudent solvency basis the shortfall members’ benefits. The Regulator acts as a
was £83 million as at 30 June 2016. watchdog, ensuring that employers and trustees
are fulfilling their responsibilities and schemes are
It is important to remember that the Trustees’ aim is
being run effectively. The Pensions Regulator is also
to continue to pay pensions in full to all members,
able to help trustees and administrators run their
even if there is a shortfall in assets. We expect that
schemes where necessary.
the Plan’s funding level will go up and down over time
as the value of the Plan’s investments varies and the For further details about the Pensions Regulator you
estimate of how much money is needed changes. can go to www.thepensionsregulator.gov.uk
Remember: the valuation as at 30 June 2016
and the funding update as at 30 June 2017 are
only snapshots of the Plan’s financial position Legal notice
at a particular point in time. The Trustees invest The Trustees are required to confirm that:
for the long term and Ladbrokes Coral Group’s The Regulator has not imposed any
contributions are normally set every three years, directions on the Plan, modified future
following each full valuation. The next full valuation benefits provided by the Plan or imposed
will be as at 30 June 2019 and Ladbrokes Coral a schedule of contributions on the Plan.
Group’s contributions will be reviewed as part of this.
There has not been a payment to
Company contributions to Ladbrokes plc or Ladbrokes Coral
Group out of the Plan funds since we last
remove the shortfall updated you.
Between 30 June 2016 and 30 June 2017, Ladbrokes
Coral Group paid £1.5m into the Plan, as agreed
under the previous recovery plan. Following the
30 June 2016 valuation, the Plan was in surplus and
therefore there is no requirement for Ladbrokes
6The Plan’s accounts
The Plan’s assets continued to grow over the past year. Here you can see how much money went in and out
of the Plan, so together with the funding update, you can keep an eye on the financial health of the Plan.
Pension Plan
1 July 2016 1 July 2015
- 30 June 2017 - 30 June 2016
(£,000s) (£,000s)
Value as at 1 July* 414,649 370,820
Total income 2,282 1,807
Change in value of investments 39,544 56,701
Total expenditure (13,179) (14,679)
Value as at 30 June* 443,296 414,649
* The opening and closing values include AVCs.
Membership
The chart below shows how the line-up of the Plan has changed in the last year:
As at 30 June 2016
Contributing members: 0
Pensioner members
1,614
Deferred members
1,661
As at 30 June 2017
Contributing members: 0
Pensioner members
1,646
Deferred members
1,584
Want to know more?
The Plan’s accounts, highlighted above, were audited by BDO LLP, who gave their view that the
accounts were a fair and true view of the transactions of the Plan. For a full copy of the Report and Financial
Statements for the year ended 30 June 2017 visit our website at www.ladbrokespensionspost.co.uk
7Investment update
As a member of the Plan, your pension is based on As the Plan’s estimated benefit payments vary from
your salary and the amount of service you have in time to time, we keep our investment strategy under
the Plan rather than the performance of investment review and will update you with any changes in
markets. However, investment performance does future issues of Pensions Post.
have an effect on the Plan’s assets, and if you are
interested in how the markets have affected the Plan, An update on our
you can find out more below. investment strategy
We regularly review the Plan’s investment strategy
Where our investments are held to achieve a suitable balance between cash flow,
In the charts below you can see a breakdown of performance and risk and decide how much we
where the Plan’s assets were invested as at should invest in the different asset classes to
30 June 2016 and 30 June 2017. achieve this.
Over the second half of 2016, market interest rates
Asset allocation as at 30 June 2016 fell causing the LDI portfolio to increase in value
and distribute cash to the Plan. In light of the larger
cash holding, the Trustee reviewed the investment
12.5% strategy and, following advice from its investment
13.4%
adviser, decided to increase the Plan’s holding in
DGFs. This increased the investment return expected
12.4% from the Plan’s assets and was implemented in
August 2016. There were no other material changes
28.4%
to the Plan’s investment strategy over this period.
The investment strategy as at 30 June 2017 resulted
33.3%
in a 35% allocation to lower-risk assets (LDI and
cash) and a 65% allocation to return-seeking assets
(Equities and DGFs).
Asset allocation as at 30 June 2017 How the investments performed
The Plan’s assets returned 7.5% over the year ended
30 June 2017, 11.8% pa over the three-year period to
14.3% 14% 30 June 2017, and 10.3% pa over the five-year period
to 30 June 2017.
If you want to know more about the Plan’s
14.3%
20.6% investments, you can read:
the latest Statement of Investment Principles; and
the Report and Financial Statements for the year
36.8%
ended 30 June on the Plan’s website at:
www.ladbrokespensionspost.co.uk
UK Equities Liability Driven Jargon buster
Investment (LDI)
Overseas Equities Visit the ‘Tools and resources’ page of the
Cash Plan’s website for definitions of some key
Diversified Growth
Funds (DGFs) pension and investment terms.
8Pension news
General Data Protection Pension scams:
Regulation (GDPR) be aware of the consequences
The law relating to data protection will change in the There have been a number of reports of often
UK and European Union on 25 May 2018. We will unscrupulous operators encouraging members of
update the data protection privacy notice that has pension schemes to access their pension assets
previously been made available to you in relation to before they reach age 55 (currently the minimum age
the Plan in advance of this change. at which someone can take their pension assets).
The Government and HM Revenue & Customs
Pensions for same-sex partners (HMRC) are concerned about the consequences of
members participating in liberation activities, and
The Plan provides pensions to same-sex partners
have taken steps to prevent them.
of deceased members, provided the partner was
married to or in a civil partnership with the member How could this affect you?
more than six months before the member’s death. If you choose to release money from your pension
Where any such pension is in payment in relation before you are aged 55, you face losing up to 70%
to a member who died prior to 13 March 2014, of your money back to HMRC. This is because you
the amount of the pension is currently reduced can lose any tax benefits that you gained on your
with respect to service before 5 December 2005. savings. In addition, the firms offering to release the
However, following a recent judgment by the funds early often charge high fees on top, leaving
Supreme Court the Plan will now provide a full you with significantly less money than you thought
pension to eligible same-sex partners in respect of all you would receive.
of the member’s service.
Please remember to be cautious if you are
Note that the above is only a summary of the Plan’s approached by a company or individual offering you
same-sex partner pension provisions and the Plan a chance to get a ‘loan’, ‘saving advance’ or ‘cash
Rules take precedent to the extent the provisions back’ from your pension, or access your pension
under it differ from the above summary early. You can read more about pension liberation
on the Pensions Regulator’s website at
Need advice? www.thepensionsregulator.gov.uk/pension-scams
Get pensions wise
The Government has promised that everyone will
receive ‘free, independent guidance’ at retirement,
to help you understand your options. This is being
provided by the Citizens Advice Bureau and The
Pensions Advisory Service.
There will be telephone, face to face, and online
guidance via www.pensionwise.gov.uk. This
guidance will be tailored to you, but it won’t make
any recommendations about specific products.
You can also find your own financial adviser –
although you’ll be responsible for paying for this
advice. See page 10.
9Useful information
Where can you find more up to
date pensions information? Keep your details
You can get more information by visiting the websites up to date!
below. Go to: It is important to keep your personal details
such as your address up to date, as outdated
www.ladbrokespensionspost.co.uk for important
information may mean that:
Plan news and resources, and information on matters
such as pension and death benefits. Benefits are not settled as quickly.
www.gov.uk for Government information and Important messages may not reach you as
public services. There is also a section dedicated to swiftly as they should.
pensions and retirement planning, which you can Delays may lead to financial hardship.
find at www.gov.uk/plan-retirement-income
Make sure you keep in touch with the Plan’s
www.pensions-ombudsman.org.uk for help with developments, by making sure we have your
complaints and disputes about the way that pension correct email address. You can tell us of any
arrangements are run. change to your address by contacting the
www.pensionsadvisoryservice.org.uk for help with Ladbrokes Administration Team.
member and beneficiary pension queries.
www.thepensionsregulator.gov.uk/individuals.aspx
for information on the Pensions Regulator, including
Professional advisers
a list of pensions resources. The Trustees use a number of professional advisers
for specialist tasks. A full list of the Plan’s advisers is
www.pensionwise.gov.uk is a free and impartial
included in the Trustees’ Annual Report and Financial
service provided by the Government to help you
Statements 2016, which you can find on the Plan’s
understand what your retirement choices are.
website: www.ladbrokespensionspost.co.uk
Nomination form
If you die as a contributing or deferred member of the
Plan, or if you die within five years of taking pension
benefits from the Plan, your family (spouse, civil
partner or dependants) may be entitled to benefits
payable on your death. You should complete a
nomination form to explain to the Trustees to whom
you would wish any such death benefits to be paid.
The Trustees will use their discretion in deciding who
should receive any benefits payable.
If your circumstances have changed then you
may want to update your nomination form. A copy
of the form is available on the Plan’s website,
www.ladbrokespensionspost.co.uk
10Contact details
If you have any questions about the
information shown in Pensions Post,
which you are unable to find an answer
to by visiting the Plan’s website at:
www.ladbrokespensionspost.co.uk or
if you have any queries about your own
Plan benefits, you can contact us by
using the details below:
Ladbrokes Pension Plan
Administration Team
The Ladbrokes Administration Team,
Hymans Robertson LLP,
One London Wall,
London, EC2Y 5EA
ladbrokesadmin@hymans.co.uk
020 7082 6454
11You can also read
