Governance Statement

Covering the period from 1 January 2023 to 31 December 2023 (the “Scheme Year”) and relates only to DC benefits (including additional voluntary contributions (“AVCs”) and the DC benefits of hybrid members) in the Scheme.

The Trustee of the HSBC Bank (UK) Pension Scheme (the “Scheme”) is required to produce a yearly statement (which is signed by the Chair of the Trustee) to describe how these governance requirements have been met in relation to:

  • the Scheme’s default investment options (including the Flexible Income Strategy and the Lump Sum Strategy in which members are invested, other legacy strategies and funds also classed as default arrangements);
  • the requirements for processing financial transactions;
  • the charges and transaction costs borne by members;
  • an illustration of the cumulative effect of these costs and charges;
  • investment returns;
  • a 'value for members' assessment; and
  • Trustee knowledge and understanding.

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Governance Statement

There are 4 key areas in the Governance Statement:

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Member Charges 

The Trustee is required to set out the charges incurred by members during the Scheme Year in this Statement. As the sponsoring employer pays the DC investment fund annual management charges, platform expenses and all other administration expenses, the member borne charges are limited to the additional fund expenses incurred by the underlying managers in the day-to-day running of the funds (for example, custodian fees etc), with the exception of some legacy AVCs funds

Value for money for members 

The Trustee carried out a value for members’ assessment, looking back over the Scheme year to 31 December 2019. The Trustee is required to assess the extent to which member borne charges and transaction costs for the Scheme Year represent good value for members.

Illustration of charges and disclosures costs 

The Sponsoring employer currently pays the AMC platform expenses and administration costs. Additional expenses (“AE”) are covered by members and are those costs incurred in the management of the underlying funds which are, by nature, flexible and therefore fall outside of the AMC, for example, custodian, professional adviser fees etc. Over a period of time, the charges and transaction costs that are taken out of a member’s pension savings can reduce the amount available to the member at retirement.