YOUR GUIDE TO THE SAINSBURY'S SELF INVESTED PENSION PLAN (SAINSBURY'S SIPP) - Legal & General
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YOUR GUIDE TO THE
SAINSBURY’S SELF INVESTED
PENSION PLAN
(SAINSBURY’S SIPP).
September 2018
1Introduction. What is the Sainsbury’s SIPP? To see how tax impacts your contributions,
including shares paid into the Sainsbury’s
Your Sainsbury’s SIPP is a defined SIPP, see pages 5 and 6.
About this guide contribution (DC) pension scheme. You
pay into the SIPP and Legal & General You can’t get access to your pension pot
This guide gives an overview of the invests this, together with any Sainsbury’s until you reach age 55. This keeps your
Sainsbury’s Self Invested Pension Plan contribution and any tax relief that’s money locked away for your future and
(Sainsbury’s SIPP), which is part of the added. At retirement, you can then access also gives you the chance to make the
WorkSave Pension Plan provided by the pension pot you have built up (see most of its growth potential.
Legal & General. Reference in this guide page 9 for more details).
to the Sainsbury’s SIPP means the The tax treatment depends on the
Legal & General WorkSave Pension Plan. individual circumstances of the investor
Full details of the Plan are available in the and may be subject to change in the
information provided by Legal & General How does the future.
which you can access online in the ‘SIPP’
section of www.jspensions.com
Sainsbury’s SIPP work?
A pension is an investment. Your pension
pot is invested in one or more funds which
About the Sainsbury’s SIPP are managed by fund managers. The
Sainsbury’s SIPP gives you a choice of
Saving for retirement is an important part where you’d like to put your money but if
of your financial planning. The Sainsbury’s you don’t wish to make a choice,
SIPP is designed to give you additional Legal & General will invest your pension
flexibility in the way you save for your pot in the default investment option
retirement. It gives you the opportunity to (please see page 5 for more information).
boost your retirement savings by:
The Sainsbury’s SIPP is a pension plan
• Allowing you to make regular with a difference: in addition to any
contributions - and receive contributions contributions from you and Sainsbury’s, it
from Sainsbury’s based on your allows you to put in J Sainsbury plc shares
pensionable pay from Sainsbury’s share plans and receive
• Making extra contributions at any time tax relief.
• Contributing Sainsbury’s shares.
2Start Up Step Up
Who can join the If you choose to join Step Up, you must
Sainsbury’s SIPP? Start Up contributions are currently 1% of contribute at least 5% of your Step Up
Start Up Pensionable Pay, but your Pensionable Pay. Sainsbury’s will
All colleagues at C6/6S grades and above contributions will increase in the future as contribute 12.5% of your Step Up
can join the Sainsbury’s SIPP. shown in the table below. The table also Pensionable Pay to your pension pot.
shows the contributions Sainsbury’s will
pay. Step Up Contributions:
Contributions to your Start Up Contributions:
Sainsbury’s You
Sainsbury’s SIPP From Sainsbury’s You
12.5% 5% or more
Apr 2018 – You can pay contributions over and above
2% 3%
How much will I pay? Mar 2019 5% of your Step Up Pensionable Pay but
Apr 2019 Sainsbury’s maximum contribution will be
There are two sections to the Plan, ‘Start 4% 4%
onwards 12.5% of your Step Up Pensionable Pay.
Up’ and ‘Step Up’. If you’re automatically
enrolled you’ll join Start Up, but you can Start Up Pensionable Pay is your total Step Up Pensionable Pay is your total
move between them at any time. taxable pay excluding car allowance, taxable pay including overtime and shift
share payments and leaving payments, premiums but excluding bonuses and any
which in the year 2018/2019 fall between other allowances or one off payments.
£464 and £3,566 per pay period. These
limits are set by the Government and are If you join Step Up, you’ll be eligible for
likely to change in the future. enhanced Life Cover and Long Term
Disability Insurance cover. These benefits
are only available to colleagues paying
Step Up contributions. For further details
see page 11.
3Can I change my contribution? you’re automatically enrolled or choose to Sainsbury’s deducts your contributions
pay Start Up contributions and £980 if you from your pay after tax, and pays this to
Yes, you can change your contribution at choose to pay Step Up contributions. Legal & General. Legal & General then
any time by contacting AskHR on 08000 adds basic rate tax relief to your
15 30 30. If you choose to join the Plan rather than contribution. If you pay higher rate tax, you
being automatically enrolled, you’ll can also claim back the additional tax relief
How do I pay? automatically be included in SMART. You from Her Majesty’s Revenue & Customs
can, however, opt out of SMART and pay (HMRC).
Contributions can either be deducted from contributions by deduction from pay.
your pay or paid through SMART. J Sainsbury plc shares
SMART is not suitable for every colleague, Please see page 6 for more information
What is SMART? so more detailed information is provided in about this option.
the ‘SMART and your pension’ leaflet at
www.jspensions.com. This leaflet also
SMART gives you both National Insurance
explains when you can move in and out of
savings and immediate tax relief. You
SMART.
sacrifice a percentage of your pay into the
Plan, which is equal to your contribution.
Sainsbury’s then pays this amount into the If you do not wish to participate in SMART,
Plan together with their contribution. As contact AskHR.
SMART reduces your pay, your National
Insurance contributions are reduced. If When are contributions deducted
you’re a higher rate tax payer, SMART from pay?
also gives you full tax relief at source
rather than having to claim some through Your contributions will be deducted from
your tax return. your pay rather than being paid through
SMART if:
If you’re automatically enrolled into the
Plan, your contributions for the first three • You’ve been automatically enrolled (for
pay periods will be deducted from your pay the first three pay periods only), or,
rather than through SMART. From the • If you’ve chosen not to take part in
fourth pay period onwards, Sainsbury’s will SMART, or
include you in SMART. You won’t be in • You earn below the Pay Protection Limit.
SMART if your pay falls below the Pay
Protection Limit. The Pay Protection Limit
is currently set at £940 per pay period if
4This default investment option is the Self Invested Arrangements
Investing in your Sainsbury’s SIPP Pre-Packaged to
Sainsbury’s SIPP Flexible Income Lifestyle Profile. The A Self Invested Arrangement gives you
default investment option is not a “no risk” access to a wide choice of investments,
You choose where your Sainsbury’s SIPP option and details of the risks of this option including:
pension pot is invested, allowing flexibility are in the Sainsbury’s fund information
in the way you save for your retirement. guides. • Shares in individual companies, such as
The Sainsbury’s SIPP offers two ways of J Sainsbury plc shares
investing, using either: This Lifestyle Profile is designed for • Unit and investment trusts
members who plan to leave their whole • Open ended investment companies
• Insured Arrangements, or pension pot invested after their retirement • Fixed Interest Securities
• Self Invested Arrangements. date and use it to provide a regular
income. These Self Invested Arrangements are
Insured Arrangements appropriate for more experienced
Full details, charges and descriptions of investors who have a good understanding
The Sainsbury’s SIPP offers more than the range of Insured Funds, including the of the risks and costs involved. It is in your
100 Insured Funds, which invest in a funds which make up the default best interests to take financial advice
variety of assets (such as equities or investment option, are in the Sainsbury’s before considering investing in the Self
property), industry sectors (such as retail fund information guides provided by Invested Arrangements.
or technology) and geographic regions Legal & General on www.jspensions.com
(such as Europe or Asia Pacific). These If you invest in a single asset, such as the
range from low to high risk options. Investment returns are not guaranteed and shares of a single company, you will be
the value of your investments may fall as taking a greater risk than if you spread
Using the details in the Sainsbury’s fund well as rise. your investment over a number of assets.
information guides, you can select, based
upon your circumstances, a suitable fund For further information, you should refer to
or funds to invest in. If you would like more the detailed information provided by
information before choosing a fund or Legal & General which is on
funds for your contributions into the www.jspensions.com.
Sainsbury’s SIPP, you should consider
seeking financial advice. However, if you
don’t want to seek advice and don’t wish to
make an investment choice, Sainsbury’s
has selected a default investment option.
5Changing your investments Transferring your Capital Gains Tax
If you would like to make a change to your shares to your
investments you’ll need to contact Contributing shares to a SIPP is a
Legal & General by email at Sainsbury’s SIPP disposal for the purposes of Capital
employerdedicatedteam@landg.com or Gains Tax (CGT). If the price at which
call them on the number shown on page You may have the opportunity to transfer you acquire your shares is different to
11. your maturing shares under Sainsbury’s the price at which you ‘transfer’ your
Executive Share Plans into the shares, you may incur a CGT gain (or
Alternatively, you can log into Manage Sainsbury’s SIPP. You will receive details loss). The law and tax rates may change
Your Account to change funds, view your of the options for transferring the in the future.
savings and update your details online in J Sainsbury plc shares you receive when
the years before you start to access your each share plan matures.
pension pot.
If you transfer Sainsbury’s shares into your
Sainsbury’s SIPP then currently basic rate
tax (20% of gross contributions for the
2018/2019 tax year) for this contribution
will be automatically paid into your
Member’s SIPP bank account in your
Sainsbury’s SIPP, which you can then
choose to invest. If you’re a higher rate
taxpayer, you will need to claim any
additional tax back either through your tax
return or by contacting HMRC. For further
information, go to www.jspensions.com
and look at the Share Contribution Key
Facts document provided by
Legal & General.
6Sainsbury’s SIPP fund(s) and varies from investment fund to
investment fund. The way it’s calculated
Self Investment charges
charges depends on who manages the investment An Annual Management Charge of 0.30%
fund and is reflected in the price of units in (inclusive of VAT) of the value of your self
Sainsbury’s has negotiated competitive the fund. invested assets, including your
rates with Legal & General. J Sainsbury plc shares if applicable
The Fund Management Charges are in the (minimum £25 a year – maximum £100 a
Please note these are the charges as at fund information guides provided by year).
September 2018, which may be subject to Legal & General.
change in the future. Other fees and An installation charge of £100 (inclusive of
charges may apply. Insured Arrangement charges example VAT), plus other charges depending on
your investment choice is also payable.
Legal & General may increase charges to Total charges may not be exactly as The installation charge does not apply if
reflect increases in their overall costs shown due to the different ways the you’re making regular contributions to the
and/or changes in their assumptions about Annual Management Charge and the Fund Sainsbury’s SIPP.
their future expenses. They’ll let you know Management Charge are applied.
at least 30 days before they make any
change. For further details see the If you are in the Legal & General (PMC)
Legal & General booklet you received on Multi-Asset Fund and your fund was
joining, which explains how your plan is worth £10,000 throughout the year, at
administered. current rates you would be charged as
follows:
Insured Funds charges Value of insured
£10,000
fund
Annual Management Charge – 0.10% of Annual
the value of your insured funds a year. Management £10
Charge at 0.10%
The Annual Management Charge is Fund Management
£23
independent of your choice of investment Charge at 0.23%
funds. Legal & General works out the Total charges £33
charge daily and takes it monthly for each
previous month by cashing in units.
The Fund Management Charge covers the
cost of managing your chosen investment
7Share transfer charges
example
Year 1 charges based on transferring These are the current charges (as at
Important:
5,000 shares valued at £3.20 each. September 2018), which may be subject to
This example assumes that the shares Value of shares change in the future. There may also be
£16,000 other charges applicable to a share
being transferred represent the share (5,000 @ £3.20)
holding once shares have been sold to transfer.
Basic rate tax relief
settle your income tax and National credit to Member’s
Insurance liability. Shares released For further information, please refer to the
SIPP bank account £4,000
under the Value Builder and Future Share Contribution Key Facts and the
(20% for 2018/19
Builder shares plans and Bonus Shares Sainsbury’s Fees and Charges documents
tax year*)
are subject to income tax and National provided by Legal & General.
Stamp duty
Insurance. deduction from
- £80
Member’s SIPP
bank account
Installation charge - £100
Account holding fee
(£10 + VAT per - £48
quarter)
AMC of 0.3% + VAT
(min £25 + VAT - £72
max £100 + VAT)
Total value of
£19,700
investment
*For a £16,000 share contribution, basic
rate tax relief of £4,000 would be applied
to your plan. (£16,000 + £4,000 = £20,000.
20% of £20,000 = £4,000).
8Taking your Sainsbury’s Buy an annuity
Use some or all of your pension pot to buy
SIPP benefits an annuity after taking up to 25% as a tax-
free lump sum. An annuity will provide you
You can currently start to take your with a taxable, guaranteed income for life
benefits at any time from age 55 – even if or a fixed term depending on the type of
you’re still working. annuity you buy.
Legislation now allows you to access the Pension Wise is an independent
money in your pension pot by taking cash government service offering free and
impartial guidance to help you understand
lump sums, flexi-access drawdown, buying your options when you come to access
an annuity or a combination of these your pension pot. Please visit their website
options: at www.pensionwise.gov.uk
Cash lump sum You can also visit the Accessing your pot
Take some or all of your pension pot as a page on the Legal & General website for
cash lump sum. 25% of the lump sum more information.
taken will be tax-free with the remainder
taxable as income. Any remaining pot You may want to consider taking financial
stays invested until you're ready to access advice. Hargreaves Lansdown have been
your pot again. appointed to help you to buy an annuity on
the open market. Their details are on
Flexi-Access Drawdown www.jspensions.com
Select some or all of your pension pot and
take up to 25% of the amount selected as
a tax-free amount. The rest of the amount
selected can stay invested or be taken as
a taxable income when you need it on a
monthly or occasional basis. The part of
the pot which wasn't selected can also
stay invested until you access it again.
9(MPAA). Please see your Legal & General
Annual Allowance Member’s booklet for more information.
Lifetime Allowance
You’ll receive tax relief on your If you exceed the Annual Allowance you The value of your Sainsbury’s SIPP will
contributions up to 100% of earnings or will pay tax on the total amount that is paid also count towards your Lifetime
£3,600 gross if greater, but if yours and above it. Allowance. This is the maximum value of
Sainsbury’s contributions exceed the retirement benefits you can build up in a
Annual Allowance then you’ll be subject to tax-efficient way. It includes benefits from
a tax charge on the excess. your Sainsbury’s SIPP, any previous
employer’s plan (including the Sainsbury’s
The Annual Allowance is £40,000 for the Executive Stakeholder Plan), and any
tax year 2018/2019. It includes: other personal pension arrangements and
defined benefit plans you may have. Any
• Contributions you and Sainsbury’s make benefits in excess of your Lifetime
to your Sainsbury’s SIPP Allowance incur a tax charge.
• Contributions to other registered pension
schemes Most people’s Lifetime Allowance will be
• The increase in value of any defined the Standard Lifetime Allowance. The
benefit pension you have built up during Standard Lifetime Allowance for the
the tax year. 2018/2019 tax year is £1,030,000.
For those with earnings over £110,000 a HMRC will tax the value of any benefits
year, and £150,000 a year when total over your Lifetime Allowance using a rate
pension contributions are included, the of up to 25% if your benefits are taken as
Annual Allowance may reduce below an income and up to 55% if your benefits
£40,000 but not less than £10,000. If you are taken as a lump sum.
think you may be affected by this, you may
need to take financial advice. Advisers If you think you may be affected by the
usually charges for their services. Lifetime Allowance, you should contact a
When you decide to access your pension financial adviser and let Sainsbury’s know.
pot your Annual Allowance for money Please note, financial advisers will usually
purchase benefits may be restricted to charge a fee for their services.
£4,000 depending on the options you
choose. When this applies, it is called the
money purchase annual allowance
10Joining process. You can find out more about Pensions
Automatic Enrolment on Any questions?
You can join at any time by going to
www.jspensions.com
AskHR. If you haven't got your own
access, please check with your line If you have any questions about the
Saving for retirement is an important part Sainsbury’s SIPP, call the
manager. If you don’t join voluntarily then
of planning for your future. The Legal & General helpline on
Sainsbury’s will automatically enrol you
Sainsbury’s SIPP is designed to give you 0345 302 0323. Call charges will vary.
into the Plan when you meet certain
additional flexibility in the way you save for They may record and monitor calls.
conditions. You will be enrolled from the
your retirement. If you’re uncertain
beginning of the next pay period if:
whether a Self Invested Pension Plan is Please note Legal & General cannot give
right for you, you should consult a financial you advice.
• You are at least 22 years old and
adviser. You can find a financial adviser at
• You are below State Pension age and
www.unbiased.co.uk. Advisers may
• Your earnings exceed the Threshold
charge for their services.
Earnings, which are currently £768 in a
four-weekly pay period and
• You have completed nine weeks
continuous employment with Sainsbury’s
from your start date or from age 22.
If you’re automatically enrolled you’ll join
the Start Up section. Please see page 3
for further details on the different sections
to the Plan.
You have one month to opt out of the Plan
and receive a refund of your contributions
once you have been automatically
enrolled, although the law will require
Sainsbury’s to re-enrol you at a later date
if you then satisfy the same conditions.
You can choose to leave the Plan at any
time but you will not be able to take a
refund of your contributions.
11Long-Term Disability Insurance (LTDI)
Note:
Other benefits.
If you pay Step Up contributions then you’ll
If you stop paying Step Up contributions,
If you’re employed by Sainsbury’s and pay be eligible for Long-Term Disability
the life cover and Long Term Disability
Step Up contributions into the SIPP then Insurance cover of up to 50% of your
Insurance cover will stop immediately.
you’ll also be eligible for the following annual contractual basic pay and pension
additional benefits: contributions should you become unable to
work for medical reasons.
Life Cover
In the event of a claim, this benefit is
If you pay Step Up contributions then you’ll payable at the discretion of the insurance
be eligible for life cover of six times your company providing the cover.
annual contractual basic pay should you These benefits are provided by
die while employed by Sainsbury’s. Sainsbury’s and are not provided by or
underwritten by Legal & General.
Payment of the life cover under Step Up is
subject to any conditions or restrictions
applied by the insurance company
providing the benefit cover.
If you don’t join Step Up within the first
year of joining Sainsbury’s, then your life
cover may be restricted by the insurer.
September 2018
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