Governance Statement

Covering the period from 1 January 2021 to 31 December 2021 (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 default investment options (including the main default options in which members are invested and other “legacy” 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;
  • a ‘value for members’ assessment; and
  • Trustee knowledge and understanding.

View the Governance Statement

If you would like to view the full Governance Statement click here

Governance Statement

There are 4 key areas in the Governance Statement:

More information

Default investment strategy 

In 2018 the Trustee made changes to the Lifecycle arrangements, such that the Scheme now offers two default lifecycle arrangements, the Flexible Income Strategy and the Lump Sum Strategy. These lifecycle strategies were set as the default investment arrangement for two distinct cohorts of members, those with DC only benefits and those who previously accrued DB benefits, respectively. Both lifecycles are 100% invested in equities until twenty years from a member’s target retirement age from which point they transition gradually into less risky assets.

Member Charges 

The Trustee is required to set out the charges incurred by members over the period covered by this statement. As the sponsoring employer pays the Annual Management Charge (AMC), platform expenses and administration expenses, member charges are limited to the additional fund expenses incurred by the underlying managers in the day-to-day running of the funds

Value for money for members 

The Trustee carried out a full value for members assessment, looking back over the Scheme year to 31 December 2018, to assess the extent to which the investment options and the benefits offered by the Scheme represent good value for members, compared to other options available in the market.

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. The Trustee has provided an illustration of the impact of the charges and costs on members pension pots for the default options ad four funds from the Freechoice range.