HIPS DC Benefit Statements - Assumptions

This page sets out the assumptions that we’ve used to help us put together the HIPS DC benefit statements that were sent to members in January 2025.

The projected benefits on your statement are for illustrative purposes only. They are NOT a promise or a guarantee of the pension that you will receive when you retire. The actual benefits you receive may be higher or lower than those shown on your statement.

Your actual pension benefits will depend on a number of factors, including but not limited to the following:

• Future contributions if you are an active member
• How your pension account is invested and how those investments perform
• Your age when you retire
• Your choice of benefits when you retire
• The cost of buying an annuity if you decide to do this when you retire

You can use the money in your pension account in lots of ways. We’re only showing you what you might get if you turned it into an income for life – also known as an annuity.
Assumptions have been made about each of these things for the purposes of estimating your benefits at retirement. However, these assumptions may or may not correspond with what happens in practice, which means that the actual value of your benefits at retirement may be different from the value illustrated here. Your illustration was also calculated using the following key long-term financial assumptions:

• Inflation is 2.5% per year. 
• The pension you buy doesn’t increase in payment.
• The pension will be payable monthly.
• The pension will be payable for the rest of your life, for a minimum of five years.
• The pension doesn’t pay a pension to anyone else when you die.
• That you don’t take any money from your pension account as tax-free cash when you take your benefits. If you decide to take tax-free cash, the pension you buy will be smaller.

Changes to your 2024 statement

You may already be aware that over the next few years the government will be launching Pensions Dashboards, a platform that will allow individuals to see their pensions information all in one place. As part of the preparation for this, they wanted to ensure that all pension projections are worked out under the same set of assumptions so it’s easy for members to review multiple pension pots (if necessary) within the platform once it is live.

For this reason, when calculating the amount you may receive as an annual pension, we no longer take your gender into consideration, whereas previously we would have.

This is in line with new legislation. This new legislation also set out new rules for how we calculate investment returns for your pension account between now and when you retire.

You may see a significant difference when comparing this figure to the one shown in previous benefit statements because of these changes.

Investments

We’ve made the following assumptions about the performance of the various HIPS DC investment funds and the charges applying to them:

The Fidelity fund factsheets can be found on Fidelity’s PlanViewer webpage. The link to this page can be found here. The factsheets include further information about each of these funds, such as the international securities number (ISIN).

You can access further Scheme information such as the Statement of Investment Principles, Implementation Statement and DC Chair’s Statement here. Paper copies can be obtained from the Hanson administration team.

The pension projection figure that may become payable when you retire is shown in today’s prices. This means we have allowed for future inflation to give you an indication of the purchasing power of your pension as if it were payable today.

Notes

• Actuarial Standard Technical Memorandum 1, published by the Financial Reporting Council, sets out the methodology for the derivation of assumptions to be used for Statutory Money Purchase Illustrations (SMPIs). Your 2024 benefit statement has been produced in accordance with this standard.
• You should bear in mind that the projected pension is only an estimate of pension benefits and we recommend seeking independent financial advice as part of your retirement planning.
• The Trustee must decide who will receive any lump sum death benefits that may become payable from the Scheme on your death. The Trustee will take account of your wishes, as recorded by you on an expression of wish form. If you have not completed a form, or would like to amend an existing form, please contact the Hanson administration team.
• Please notify the Hanson administration team immediately of any change in your marital status or your address, or if any of the details recorded on your benefit statement are incorrect.
• If you are required to complete a Self-Assessment tax return, you may be asked to provide details of the value of pension contributions made on your behalf over the previous tax year or up to a nominated date. Adding your contributions and Hanson’s contributions together will give you this value for the year up to the statement date. HMRC also places a limit on the amount of contributions which can be paid in the Scheme’s Pension Input Period (6 April to 5 April), which is set at £60,000. If you have an ‘adjusted annual income’ of more than £260,000, this Annual Allowance (AA) is tapered. For every £2 of income over £260,000, the AA for that individual will be reduced by £1, subject to a minimum AA of £10,000. You can learn more about the tapered AA and whether it will affect you at www.gov.uk/government/publications/pensions-tapered-annual-allowance. If, when completing your tax return, you remain unsure about the value, please contact the Hanson administration team and we will be able to provide the exact amount received into the Scheme for the relevant tax year.