Givaudan : UK Pension Plan Chair’s Statement

GIVAUDAN UK PENSION PLAN

STATEMENT

YEAR ENDED 31 MARCH 2021

Year ended 31 March 2021

demonstrate how the DC Section of the Plan (with Legal & General L&G) and AVC arrangements (with L&G, Clerical Medical and Equitable Life) hav e complied with the governance standards introduced under the Occupational Pension Schemes (Charges and Gov ernan Section and the AVC arrangements are closed to new members and future contributions.

The AVC arrangements with Utmost, formerly Equitable Life, and Clerical Medical are legacy arrangements, which the Trustees monitor on a regular basis. These funds represent a smaller proportion of ov erall assets than the AVCs with L&G.

This Statement is in relation to the Plan year ended 31 March 2021 and cov ers fiv e key areas:

1. - gov erned DC scheme.

2.

1. Charges, transaction costs and v alue for members.
2. The processing of core DC Section financial transactions.

5.

tatement in respect of these requirements are set out herein.

ction of the Plan is

Summary of assessment results

Practice 13 and regulatory guidance for DC schemes, which came into force from 28 July 2016, and keep their assessment under regular rev iew. The last formal rev iew was carried out for the year ended 31 March 2018.

The Trustees can confirm that the DC Section continues to meet all legal requirements set out in the Code. In -run pension scheme should meet, and the Trustees hav e been working through any areas where further improvement may

be required. The Trustees were due to undertake their next formal rev iew of progress against the Code during 2020. However, this did not take place as the Company and Trustees were in consultation ov er whether to mov e the DC section of the Plan to a master trust.

A decision was made in Q2 2020 to mov e the DC Section to a master trust and a bulk transfer was completed on 6 January 2021, to mov e the majority of the DC assets and members to the L&G Master Trust. This remov ed the majority of the DC assets and members from the Plan. There are 17 DC members with amounts in a legacy AVC policy with L&G that were not included in the initial population for the bulk transfer to the L&G Master Trust. The Trustees and administrators are currently working towards mov ing these amounts ov er to the L&G Master Trust.

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GIVAUDAN UK PENSION PLAN

STATEMENT

YEAR ENDED 31 MARCH 2021

DC Section Investment strategy

The Trustees have prepared a Statement of Inv estment Principles (SIP) which governs decisions abou t inv estments in the DC Section, including the default strategy. The SIP captures

1. Their policies in relation to the:
2. 1. Kinds of inv estments to be held;
   2. Balance between the different kinds of inv estment;
   3. Risks, including how these are measured and managed;
   4. Expected return on investments;
   5. The realisation of inv estments;
   6. Financially material considerations ov er the appropriate time horizon of the inv estments, including how those considerations are taken into account in the selection, retention and realisation of inv estments; and
   7. The extent (if any) to which social, env ironment or ethical considerations are taken into account in the acquisition, retention and disposal of inv estments.
3. Their policy in relation to:
4. 1. The exercise of the rights (including v oting rights) attaching to the inv estments; and
   2. Undertaking engagement activ ities in respect of the inv estments (including the methods by which, and the circumstances under which, the Trustees would monitor and engage with relev ant persons about relev ant matters).

iv . the following matters (or explaining the reasons why any of the following matters are not set out):

1. How the arrangement with the fund manager incentiv ises the fund manager to align its investment
   -paragraph (ii) abov e;
2. How that arrangement incentiv ises the fund manager to make decisions based on assessments about medium to long-term financial and non-financial performance of an issuer of debt or equity and to engage with issuers of debt or equity in order to improv e their medium to long-term performance;
3. How the method (and time horizon
   - paragraph (ii) abov e;

d.	manager, and how they define

and monitor targeted portfolio turnov er or turnov er range; and

1. The duration of the arrangement with the fund manager.

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GIVAUDAN UK PENSION PLAN

STATEMENT

YEAR ENDED 31 MARCH 2021

Similarly, the objectiv es and principles for the AVC arrangements hav e also been documented in a sep arate SIP.

A copy of the latest SIP dated September 2020 is appended to this Statement. The SIP is usually reviewed at least annually and formally ev ery three years. No material changes have been made to the SIP during the year to 31 March 2021 due to the exercise undertaken to make a bulk transfer to the L&G Master Trust.

The Trustees also receiv e updates from the Professional Adv iser with regards to market practice for default inv estment strategies in DC trust-based pension schemes.

The Trustees are responsible

and benchmarks. The analysis and adv ice prov ided at Trustee meetings supports the Trustees in determining whether it should consider making any changes to the inv estment strategy.

The Trustees offers a default inv estment strategy ( the Plan default ) for DC and AVC members who do not make a choice about the inv estment of their funds. The Plan is not used by the Company as a qualifying scheme for the purposes of meeting its automatic enrolment responsibilities.

tment option is a lifestyle option that targets annuity purchase at

lower risk assets on the approach to retirement. The switching commences ten years prior to a member's Target Retirement Age (TRA) .

The objectiv e of the Plan default is to generate capital growth ov er the long term with increasing levels of retirement income protection and capital protection as members approach retirement.. If a member has not selected a TRA, the default will be age 65.

For members with more than 10 years to TRA, the default strategy inv ests in the Global Equity Fund. 10 years gov ernment bonds, index linked gilts and cash. From 10 years before TRA, the Plan default continues to prov ide the potential for growth,

but places more emphasis on av oiding large fluctuations in the v alue of savings by gradually mov ing into a lower risk fund. The fund invests primarily in fixed interest inv estments. This phase of the solution is likely to produce lower rates of return than the earlier years.

The Trustees are comfortable with the default arrangement but giv en the bulk transfer in January 2021, they are no longer activ ely monitoring the appropriateness of it.

-select options were last considered during a review of the SIP in 2018 and the Trustees were comfortable the strategy and performance remained appropriate, based on an assessment of the likely choices members of the DC Section of the Plan would make at retirement. The Trustees were due to undertake the next formal triennial rev iew of the investment strategy during 2020. Howev er, this did not take place as the Company and Trustees were in consultation ov er whether to move the entire DC section of the Plan to a Master Trust. The bulk transfer of members went ahead in January 2021 and so no is planned.

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GIVAUDAN UK PENSION PLAN

STATEMENT

YEAR ENDED 31 MARCH 2021

Core scheme financial transactions

is not used as a Qualifying Scheme for auto-enrolment. Nev ertheless, the Trustees still hav e a specific duty to ensure that core financial transactions to the DC Section are processed promptly and accurately. Some examples of core financial transactions are:

transfer of member assets into and out of the Plan.

transfers between different investments within the Plan.

payments to and in respect of members.

L&G also prov ide management information to the Trustees in respect of the AVC arrangement. Information prov ided to the Trustees which were 97% for the year to 31 March 2021.

In addition to SLAs, Section.

The administration reports also highlight any complaints raised in the period. During the period cov ered by this Statement, Aon adv ised the Trustees that it had receiv ed no formal complaints.

transactions were processed promptly and accurately, and that no issues arose with regard to the accuracy and timing.

Charges , transaction cos ts & value for members

Member-borne costs and charges

The Administration Regulations require the Trustees to make an assessment of charges and transaction costs borne by DC Section members and the extent to which those charges and costs represent good v alue for members. The Annuity Targeting Lifestyle option has a maximum annual cost of 0.175%. This is below the charge cap requirement of 0.75% on default funds.

The costs associated for many of the serv ices required to operate the Plan and support members, such as administration and communications, are met by

Members in the Utmost AVC arrangement are inv ested in either the With-Profits Fund or the Deposit Fund. The Annual Management Charge (AMC) for the Deposit Fund is 0.50%.

The majority of members in the Clerical Medical arrangement are inv ested in the With -Profits Fund. There are a small number that remain invested in unit-linked funds and these funds hav e an AMC of 0.50% p.a.

Transaction costs

Transaction costs and gains are those incurred by fund managers as a result of buying, selling, lending or borrowing inv estments. These costs are allowed for within the unit price for each of the funds. In 2017, The Financial Conduct Authority (FCA) published its policy on how asset managers must disclose transaction costs and administration charges.

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GIVAUDAN UK PENSION PLAN

STATEMENT

YEAR ENDED 31 MARCH 2021

The annual aggregate charges paid by the members (known as the Total Expense Ratio) and the applicable transaction costs are set out below for the year to 31 March 2021.

		Aggregate	Total
Core fund range	Transaction	Expense
		Costs	Ratio
L&G Global Equity Fixed Weights (50:50) Index Fund		0.010%		0.175%
L&G Ov er 15 Year Gilts Index Fund		0.000%		0.100%
L&G Ov er 5 Year Index-Linked Gilts Index Fund		0.030%		0.130%
L&G Cash Fund		0.000%		0.125%

These funds are also the indiv idual components of the

There are multiple AVC prov iders including Legal & General (L&G), Utmost and Clerical Medical. AVCs held with Utmost and Clerical Medical are in with-profits policies and so as such charges and transaction costs for those funds are implicit within the bonuses applied to the funds.

The TERs applied to the bundled L&G AVC fund range are shown in the following table:

	Aggregate	Total
AVC fund range	Transaction	Expense
	Costs	Ratio
L&G Global Equity (30:70) Index Fund 75% Hedged	0.04%	0.54%
L&G World (Ex-UK) Equity Index	0.00%	0.50%
L&G UK Equity Index Fund	0.00%	0.50%
L&G Property Fund	0.00%	1.11%
L&G Pre-Retirement Fund	0.07%	0.57%
L&G Cash Fund	0.00%	0.50%

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