Docusign Envelope ID: 7C50003C-051D-4E0C-907A-F452AD5C4EA2
UNITED TECHNOLOGIES CORPORATION (UK) PENSION SCHEME YEAR ENDED 31 DECEMBER 2023
STATEMENT REGARDING DC GOVERNANCE
Other services paid for by the sponsoring employer were excluded but nevertheless deliver value to members, including the services of professional advisers and the operation of the trustee board, with a duty to act in the best interest of members. TACC Benefits In relation to the Scheme’s TACC Benefits, the member -borne charges and transaction costs relate to investment, administration and communication services. The assessment considered: in relation to investment services: o the investment strategy, e.g. the design of the default and range of alternative options o the arrangements for monitoring the performance of the investment options and reviewing the investment strategy o the investment governance arrangements in relation to administration services: o the general administration arrangements o arrangements in relation to financial transactions o data and record keeping in relation to communication services: o communication strategy o pre-retirement communications o at/post-retirement communications The Trustee concluded that the Scheme’s TACC Benefits continue to offer excellent value in relation to the charges and transaction costs borne by members. In reaching this conclusion, the Trustee recognised: The member-borne charges levied during the Scheme year are lower than those levied by occupational DC pension schemes of a similar size. The Trustee has implemented a robust governance structure to monitor administrative and investment performance of the Scheme’s TACC Benefits. The Scottish Widows AVC policy through which TACC Benefits are held through Scottish Widows’ Money4Life platform, which is one of the UK’s leading DC platforms for workplace pension savings. AVCs In relation to AVCs, the member-borne charges and transaction costs relate to investment (investment only in respect of L&G AVCs), administration and communication services. The assessment considered the broad value for members of these services, taking a proportionate approach that reflects the relatively low value of the AVC pension savings concerned and that as both Scottish Widows AVCs and TACC Benefits are held in the same policy, consideration of this policy was already covered in the Trustee’s assessment of TACC Benefits above. The Trustee concluded that the Scheme’s other AVC arrangements offer good value in relation to the charges and transaction costs borne by members. In reaching this conclusion, the Trustee recognised: The costs are broadly in line with AVC arrangements of a similar size and closed nature. The exception being the larger L&G AVC arrangement which has relatively much lower charges due to member- borne charges being levied solely in relation to investment management services only. The Trustee identified in its 2020 AVC review that there is likely to be limited opportunity for the Trustee to consolidate its AVC arrangements further without member detriment. The Trustee will be looking to carry out a review of the Scheme’s AVC arrangements in the 2024 Scheme Year.
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