The Trustee's annual newsletter to members, including the Scheme's summary funding statement.
UTC (UK) PENSION SCHEME
Newsletter November 2025
Welcome
Welcome to the 2025 edition of the annual newsletter from the Trustee of the UTC (UK) Pension Scheme.
Cyber security Cyber-attacks continue to be in the news, with high-profile retailers, Marks & Spencer, the Co-op and Harrods all being targeted earlier this year. As cyber-attacks can affect individuals, companies and even governments, any organisation holding large amounts of personal data can be a target. The Trustee takes business continuity and cyber security seriously and is currently reviewing its advisers’ processes and plans to ensure they are adequate. We would like to remind you to be mindful of pension scammers. The Pensions Regulator has shared a powerful video, showing how pension scams can devastate real people. Don’t be a victim – watch the video and read our ABCs on page 5 to avoid getting scammed. Thank you for taking the time to read this update. We hope you find it helpful and informative, but if there’s a particular topic you’d like to see us cover in future, or if you have any questions or queries, please get in touch using the contact details on page 15. Greg Smart, Chair of the Trustee UTC (UK) Pension Scheme
In what continues to be a challenging economic and regulatory environment, the Trustee has continued to actively monitor the Scheme’s funding, investment strategy and governance, remaining fully focused on protecting your pension. We work closely with our professional advisers to ensure your pension is managed responsibly and that benefits are paid on time. Whether you are yet to retire, or are already receiving your pension, our priority as your Trustee remains the same: to help you build and enjoy a secure financial future. We hope this newsletter helps you to understand how the Scheme is run and what protection there is for your benefits. Valuation results I am delighted to report that the valuation as at 31 December 2024 has been completed, which showed that the Scheme continues to enjoy a surplus on the Technical Provisions basis. The full details are provided in the Summary Funding Statement on page 11. Pensions news Elsewhere in this issue, we cover recent developments in the world of pensions, including an update on the new Pension Schemes Bill, and some upcoming changes to inheritance tax. You will find more information on page 4.
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What’s inside? Pension news Scheme noticeboard
11 14 15
Summary Funding Statement 2024
04 06 08 09
Your pensions team
Who to contact
Money matters
Investment matters
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Pension news Coming soon – pensions dashboards You may remember from our previous newsletter that pensions dashboards are currently under development. This is a government-backed initiative to support better retirement planning, by enabling people to access their pensions information online, securely and all in one place. (Please note the dashboards won’t include details of any pensions already in payment, as it’s assumed that members will already be aware of these.)
Inheritance tax changes Currently, lump sum death benefits from pension schemes aren’t considered part of your estate (so won’t be subject to inheritance tax (IHT)). However, the government plans to introduce legislation to change that, so that from 6 April 2027, most unused pension savings and death benefits will be included within the value of your estate for IHT purposes. This means that unless passed to a spouse or civil partner, these funds may be subject to IHT. We will update you once final guidance has been issued. However, please note that we are unable to provide financial or tax advice, so if you think you may be affected by these changes, you should take advice from an authorised financial adviser. Pension Schemes Bill In 2024, the government launched a pension review to ‘boost investment, increase pension pots and tackle waste in the pension system’, and an interim report was published in November 2024. The first draft of the Pension Schemes Bill, published in June 2025, aims to address the issues identified in the review and improve retirement outcomes for all pension savers. In particular, the bill covers plans to consolidate small defined contribution (DC) pension pots, ensure schemes provide members with value for money, and provide increased flexibility for defined benefit (DB) pension schemes, like the UTC (UK) Pension Scheme, to safely release any surplus funds to sponsoring employers. DC schemes will also be required to offer their members clear default options for turning savings into a retirement income and overall simpler retirement choices.
We’re pleased to report that the Scheme successfully connected to the dashboards platform in August 2025. This means that we’re ready to send information about your UTC (UK) Pension Scheme membership directly to your dashboards account when the system opens for public use, although this probably won’t happen until 2027. We’ll write to you before the launch date, so watch this space. In the meantime, you don’t need to do anything or provide any information. Please be aware that scammers may attempt to take advantage of the pensions dashboards project as it gains momentum and greater public awareness. If anyone claiming to be from a ‘pensions dashboard’ asks you to confirm your personal data, please be very cautious.
However, if you’re interested in knowing more, information on the Pensions Dashboards Programme can be found here: www.pensionsdashboards programme.org.uk
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Learn your ABCs to outsmart the scammers Just when we think we know all the tricks and tactics used by scammers to part us from our money, they come up with more! Scams are everywhere, and in this digital world it’s hard to avoid them. So how do you protect yourself? Here are three simple rules to follow to help you stay safe, summed up as ABC…
A
C
Awareness • If anyone contacts you out of the blue to talk about your pension, that’s a red flag for a pension scheme. Pensions cold calling is illegal in the UK, so the safest thing to do is hang up. • If you get offers via email or text, you should simply ignore them. • If someone tries to rush you into a decision, be very cautious! A genuine adviser would give you enough time to properly consider their proposal. • If an offer sounds too good to be true, it probably is!
Communication • Talk about your plans with family or trusted friends. Sharing your thoughts can provide new insights and help you spot anything suspicious. • You can also call the Scheme administrator if you’re worried you’re being targeted by a scammer. • If you think someone has tried to scam you, tell Action Fraud on 0300 123 20 40. Pension scams: a real-life warning The Pensions Regulator has shared a powerful video in which Pauline Padden, a 60-year-old critical care nurse, tells how she was targeted at a vulnerable time in her life and lost £45,000 to a pension scam. Scan the QR code to watch her story or visit: www.youtube.com/ watch?v=5gAHiUxo__4&t=4s
B
Background checks • For anything to do with your pension, always research the individual or firm you’re dealing with. Criminals will go to great lengths to appear genuine and they can be very convincing. Make sure they’re reputable and regulated. • Look for reviews and any warnings from financial authorities. The Financial Conduct Authority has a list of known scams, as well as a register where you can check that your adviser is authorised to provide the services they’re offering: www.fca.org.uk/consumers/warning-list- unauthorised-firms https://register.fca.org.uk/s
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Scheme noticeboard
In the event of a member’s death The loss of a loved one can be a very
distressing time, particularly if it’s unclear what needs to happen in respect of their benefits. We thought it would be useful to outline the process in three simple steps: 1) The Scheme administrator, Gallagher, will need to be informed that a member has passed away – their details can be found on page 15. They will ask for the contact details of the member’s next of kin or executor and will record the death to stop any future pension payments. Any overpaid pension will need to be recovered from the member’s estate, so it’s important you get in contact as soon as possible. 2) Gallagher will ask for a copy of the member’s death certificate, plus any supporting documents such as the birth or marriage certificates of any dependant who is, or may be, eligible for death benefits (e.g. a spouse). They will also make the request for any overpaid pension to be returned if it hasn’t been already. All original certificates will be returned as quickly as possible. 3) Once Gallagher has processed the information, they will arrange for any benefits that are due to dependants or beneficiaries to be paid.
Retirement quotations online A large proportion of our deferred members are now able to produce their own retirement quotations online through the member portal, as Gallagher has been introducing this functionality across the different sections in a phased approach. You can check whether it is available for your section by logging into the member portal here: www.buckhrsolutions.co.uk/utc • If you’re using the portal for the first time, you can click ‘First time user?’ to set up a login ID and password. • If you’ve forgotten your login details, you can click ‘Forgotten your details?’ to reset your password. • If you’re having trouble registering, or are unable to reset your password, you can contact Gallagher using the details on page 15.
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The importance of an up-to-date Expression of Wish form Life doesn’t always follow a set path, and you may find your personal life changes dramatically over a short period of time. You may have completed an Expression of Wish form (sometimes called a nomination form) when you first joined the Scheme and then have forgotten all about it. But do you really want the wrong person to get your death benefits, should the worst happen? For example, if you’ve named an ex-partner as your beneficiary, then the Trustee would need to consider them as a person to pay benefits to in the event of your death. If you’re unmarried and die without a completed Expression of Wish, the Trustee may consider paying a ‘discretionary’ benefit to a partner, where this is permitted under the Scheme Rules, but to do this the Trustee is obliged to ask for a lot of information at what can be a very sensitive time. The Trustee will have to ask for details of your partner’s financial position and evidence of shared income and expenses etc, so that it can properly assess whether that person is entitled to any benefit. It’s easy to update your Expression of Wish through the member portal, which will help the Trustee pay any benefits due on your death quickly and efficiently: www.buckhrsolutions.co.uk/utc
GMP equalisation & rectification Guaranteed Minimum Pensions (GMPs) were the statutory minimum amounts that had to be paid to a person if they were a member of a scheme that was contracted out of the old State Earnings-Related Pension Scheme (SERPS). Most of the legacy pension schemes that merged in 2009 to form what is now known as the UTC (UK) Pension Scheme were contracted out, so if your membership dates back to before 1997, you may have a GMP element within your pension. In recent years, there have been a number of workstreams relating to GMP records in the Scheme. One of these is called GMP rectification , and it involves the administrator checking that the GMP records held by the Scheme match those held by HMRC. Where there is a discrepancy, members will receive a top-up payment (if the process shows they’ve been underpaid). If they’ve been overpaid, the Trustee has agreed not to reduce their pension payments but to adjust future increases to ensure they receive the correct level in future. Members of the non-Goodrich Sections of the Scheme had their GMPs rectified on 1 September 2024, where applicable, when top-up payments were made.
For members of the Goodrich Section, the Trustee is currently working with Gallagher to implement GMP rectification, and this is likely to take place towards the end of 2025/in early 2026. GMP equalisation is then anticipated to follow for the entire Scheme in the second half of 2026. GMP equalisation is a different issue and has arisen because, historically, GMPs were accrued at different rates for men and women and were payable at different ages, reflecting the different State pension ages for men and women at the time. A High Court ruling in 2018 found that there should be no discrimination between male and female members in calculating their GMPs. Therefore, the Trustee is now obliged to ‘equalise’ these GMP benefits for men and women. This has been a very long process, not only because the pensions industry had to wait for guidance from the government on how these benefits should be equalised, but also because the calculations themselves are very complex. Some members may be due a top-up to their pension, but we expect that this is likely to be relatively small. The Scheme administrator will write to affected members in due course.
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Money matters
The information on this page is a summary of the Trustee’s formal Report & Accounts for the year to 31 December 2024.
If you would like to see the full report, you can view it online at https://online.flippingbook. com/view/47529/
The information is independently audited, giving you reassurance that the Scheme’s assets are being properly managed. Ins and outs This table shows the money going into and coming out of the Scheme over the year to 31 December 2024. £000’s Value of the fund at 1 January 2024 1,582,283
Income Company contributions
0
Total income
0*
Expenditure Benefits paid
(71,084) (1,798) (2,685) (75,567)
Transfers to other plans Administrative expenses
Total expenditure
Net returns on investments
(64,576)
Value of the fund at 31 December 2024
1,442,140
Any figures shown in brackets are negative amounts. *No contributions were payable in the year, primarily because the Scheme funding level exceeded the threshold for the Company to reimburse the Scheme for the Pension Protection Fund levy paid and pay contributions towards the Scheme’s expenses.
Our membership This chart shows the breakdown of the Scheme’s membership as at 31 December 2024. The Scheme was closed to future benefit accrual on 31 March 2020, so any active members at that time became deferred members from that date.
Deferred members 3,375 Pensioners (including dependants) 5,219
Total 8,594
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Investment matters The Trustee’s investment strategy focuses on a diverse range of assets, which has remained largely consistent over the last year. The Trustee and its advisers continue to monitor the impact of geopolitical events on the Scheme’s investments (for example, the results of the US election and the heightened tensions in the Middle East). They review the various market and Scheme-specific implications of each development to ensure that potentially volatile market environments are managed effectively. The Scheme’s investment strategy is well-diversified and effectively hedged/protected against interest rate and inflation movements, so the impact of these current events on the Scheme’s funding position to date has been minimal. Investment performance The table shows the estimated total return on the Scheme’s invested assets over the 12 months and three-year period to 31 December 2024, and compares it with a benchmark set by the Trustee’s investment consultants. As you can see, the Scheme’s investment outperformance relative to the benchmark implies that the managers used by the Trustee have, as a whole, produced returns that are better than expected.
1 year (%)
3 years (% p.a.)
Scheme return*
(5.1) (7.2)
(13.6) (14.0)
Composite investment manager benchmark**
+2.1
+0.4
Scheme outperformance
Source: Barnett Waddingham. Performance shown is for periods to 31 December 2024 *This is the estimated total return on the Scheme’s invested assets, i.e. excluding the value of the Asset Backed Contribution (ABC) arrangements agreed between the Trustee and RTX. **This measure provides an indication of the combined return the Scheme’s investment managers would have been expected to produce over the period, based on their underlying performance targets. While the Scheme’s assets have fallen in value over the period, they fell to a lesser extent than the actuarial value placed on the Scheme’s liabilities. This has led to an improvement in the funding position over the period (the funding position is the extent to which the assets cover the value placed on the future liabilities). The value of the Scheme’s assets fell over the period primarily due to their exposure to fixed and inflation-linked UK Government bonds, which reduced in value as global central banks increased interest rates to control price inflation following the Covid-19 pandemic. These assets are held to back future benefit cashflows with low-risk income. They also serve a useful role in helping protect the Scheme’s funding position by hedging movements in the actuarial value of the liabilities caused by changes in interest rate and inflation expectations.
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Investment objective and de-risking framework The Trustee regularly monitors the funding position, and its objective is to improve and protect the funding levels. It has in place a ‘de-risking framework’, agreed with RTX, which enables the Trustee to lower the target, thus taking less risk within its investment strategy. In addition, the Trustee monitors the level of hedging/protection against interest rate and inflation movements. These steps enable the Trustee to secure any gains when there are improvements in the funding position. Responsible investing Pension schemes in the UK (and globally)
Investment split This chart shows how the assets in the Scheme were allocated across different types of investments as at 31 December 2024.
hold trillions of pounds in assets, which means they have influence on the companies and organisations in which they invest. Because of this, trustees have a responsibility to choose carefully where they invest and consider environmental, social and governance (ESG) factors when they select their investments. The Trustee takes this responsibility very seriously and has formally stated its objectives in the Statement of Investment Principles (SIP), which can be found at https://online. flippingbook.com/view/754805965 The Trustee has also placed the annual Implementation Statement online: https:// online.flippingbook.com/view/277418520 This covers how the Trustee is implementing its policies on ESG and discharging its investment responsibilities. The latest version is dated July 2025. There is a growing focus within the pensions industry on climate change, and larger pension schemes are now required to produce annual climate change reports, setting out how they manage their impact on the global climate. Our third such report is now available at https://online.flippingbook.com/ view/667561390
Equities
8.0% 6.0%
Target return Secure income
14.0%
Buy and maintain corporate bonds Liability Driven Investment (LDI)
33.5%
37.5%
Cash
1.0%
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Summary Funding Statement 2024 Each year the Trustee provides you with a statement of the Scheme’s financial position to help you understand the state of the Scheme’s finances.
The actuary does a formal valuation of the Scheme every three years and, for the years in between, provides the Trustee with an estimate of how the funding position has changed. The latest formal valuation was carried out as at 31 December 2024. The next formal valuation is due as at 31 December 2027, and the Trustee will share the results of this valuation in 2028. The assets of the Scheme come from contributions paid by members and by the employers, together with investment growth. The assets of the Scheme are held separately from the employers, and the Scheme’s Trustee is responsible for investing this money, after taking professional advice. The assets of the Scheme are held in a common fund – they are not held in separate pots for each member. Pensions are paid to retired members out of this common fund.
How the underlying funding position has changed since the previous valuation The ‘funding level’ is the measure by which the value of the assets cover the value of the liabilities. So if, at the valuation date, the Scheme is expected to have enough money to meet the full cost of all members’ benefits, the funding level is 100% or above.
Valuation date
Valuation 31 December 2021
31 December 2024 (consistent approach)
Assets
£2,535m £2,288m
£1,479m £1,287m
Liabilities
Surplus
£247m
£192m
Funding level
111%
115%
The table above shows the Scheme’s funding position at the previous valuation and the latest valuation, using a consistent method to value the Scheme’s assets and liabilities. This like-for-like comparison shows that the Scheme’s funding level has improved since the last valuation. This improvement is primarily driven by rises in interest rates, which have significantly reduced the value placed on the liabilities. The rise in interest rates also reduced the value of the Scheme’s assets but by a smaller proportion than the liabilities.
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Updates to the valuation method – a more cautious approach
The Trustee is required to adopt a prudent approach when assessing the Scheme’s funding position. However, the level of caution applied can vary between valuations, depending on the circumstances at the time. For the 31 December 2024 valuation, the Trustee and the employers agreed to include additional elements of caution when valuing both the assets and liabilities, as follows: • Liabilities: It was agreed to use more conservative assumptions for future experience when valuing the liabilities. This had the effect of increasing the value of the liabilities by £21 million. • Assets: A more cautious valuation was applied to the Scheme’s Asset Backed Contribution (ABC) asset. The ABC is a funding arrangement under which the parent company of the Scheme’s
sponsoring employers (RTX) commits to make payments over time. However, these future payments are only due to the extent that they are needed to put the Scheme in a position whereby it can afford to secure members’ full benefits with an insurance company. Given the improved funding position, the likelihood of needing these future payments has reduced. As a result, the Trustee has prudently assigned a lower value to the ABC asset, even though the underlying agreement remains unchanged. This adjustment reduced the reported value of the Scheme’s assets by £62 million. These changes were introduced to simplify the Scheme’s regulatory reporting and help reduce associated costs.
Valuation results allowing for the updated, more cautious approach The table below presents the results of the 31 December 2024 valuation allowing for the updated, more cautious approach. For context, it also includes the results from the previous valuation (31 December 2021) and the 2024 valuation using a methodology that is consistent with the 2021 valuation.
Valuation date
Valuation 31 December 2021
31 December 2024 (consistent approach)
31 December 2024 (updated approach)
Assets
£2,535m £2,288m
£1,479m £1,287m
£1,417m £1,308m
Liabilities
Surplus
£247m
£192m
£109m
Funding level
111%
115%
108%
Under the updated approach, the Scheme’s funding level is 108% at the valuation date. While this is lower than at the previous valuation, it’s important to re-iterate that this doesn’t mean the Scheme is worse off. In fact, the opposite is true: the Scheme’s funding level has improved on a like-for-like measure, as shown by the ‘consistent approach’ results above. We also wrote to you last year with an interim update on the estimated funding position as at 31 December 2023. For completeness, over the year to 31 December 2024, the funding level improved from 107% to 108%. This slight improvement was primarily caused by Scheme experience being more favourable than the prudent assumptions used by the Trustee.
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What contributions have been agreed with the employers? The results above show that the Scheme was estimated to be in surplus at the valuation date, even allowing for the more conservative approach taken for this valuation. As such, no ‘special’ Company contributions were agreed as part of the actuarial valuation process. However, in the event that the Scheme’s funding level falls below 107.5%, it was agreed as part of the valuation that the Company will be required to cover the cost of Pension Protection Fund (PPF) Levy payments and make annual payments towards the cost of other expenses associated with running the Scheme. For your information, there have been no payments out of the Scheme’s surplus funds to the employers since the last Summary Funding Statement. If the Scheme had discontinued and had been wound up As part of the 2024 valuation exercise, the actuary was required to calculate a wind-up cost. This does not, however, mean that the Company is thinking of winding up the Scheme. It was estimated that if the Scheme had been wound up, the Scheme’s assets would have been sufficient to cover 96% of the amount needed to buy insurance policies to provide all members’ benefits earned up to 31 December 2024. This is a significant improvement from the assessment at the previous 31 December 2021 valuation, when it was estimated that the Scheme’s assets would only have been sufficient to cover 81% of benefits. If the Scheme were to start winding up, the Company would be required to pay enough money into the Scheme to enable the Trustee to buy insurance or annuity policies. If the Company is unable to pay the full amount to secure benefits because it is insolvent, the PPF might offer the Scheme’s members compensation instead of their benefits. This means that if the Scheme is discontinued and wound up, you might not get your full pension if the funding position is less than 100% on the winding-up basis. Find out more about the PPF at www.ppf.co.uk or by emailing them at information@ppf.co.uk
Additional information The Trustee is required to report whether any repayment out of the Scheme has been made to the employers during the year ending 31 December 2024. It can confirm that no such payment has been made. The Pensions Regulator has not subjected the Scheme to any use of its powers under section 231 of the Pensions Act 2004. These powers include the power to modify the Scheme for future accrual of benefits, subject it to directions about how its technical provisions are to be calculated or how quickly any deficit has to be cleared, or to impose a schedule of contributions. Documents available on request The following documents are available on request: • Schedule of Contributions • Annual Report and Accounts • Scheme Funding Report • Actuarial Report • Statement of Investment Principles • Privacy Policy • Trust Deed and Rules. If you want a copy of any of the Scheme documents or have a question about the Scheme or your benefits, please contact Gallagher, the administrator. Thinking of transferring your benefits? If you are thinking of leaving the Scheme by transferring your pension benefits to another pension scheme, you should consult an independent financial adviser before taking any action. Transferring your pension puts you at risk of a pension scam. Find out the warning signs of a scam on page 5.
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Your pensions team The Scheme is managed by a Board of six Trustee Directors – four are selected by the Company and two have been nominated by the Scheme’s members.
Company selected Greg Smart (Chairman) – member of the Otis Section Ken Levine – Executive Director, Global Retirement Strategy, RTX Greg Hawes – Associate Director, Benefits Finance, RTX Julie Sullivan – Senior Director, Pension Investments, RTX Member nominated Robin Smith – member of the Kidde Section Eugene Egan – member of the Otis Section
Our advisers Administrator Gallagher (formerly Buck) Actuary Oliver McCulloch, FIA, Barnett Waddingham LLP Investment adviser Barnett Waddingham LLP – investment advisers to the UTC Common Investment Fund Investment managers UTC Pension Trust Limited – Administrator to the UTC Common Investment Fund Aviva Investors BlackRock Investment Management (UK) Ltd Insight Investment Management Legal & General Assurance (Pensions Management) Limited M&G Investment Management Ltd (until June 2024) Ruffer LLP Auditor PricewaterhouseCoopers LLP Legal adviser Shoosmiths LLP Secretary to the Trustee Julie Beake, RTX Pensions Manager
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Who to contact If you have any questions about your benefits in the Scheme or the payment of your pension, please contact the Scheme administrator, Gallagher.
Gallagher (Edinburgh) PO Box 321 Mitcheldean Gloucestershire GL14 9BG 0330 123 9563 utcpensions@ajg.com
Let us know if anything changes It is important to keep your personal information up to date on the member portal so that Gallagher can pay benefits quickly and efficiently when they fall due.
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