Some people who join the Telefónica Pension Plan like to have a choice on where their contributions are invested. To keep things simple you will initially be assigned to a default investment strategy termed ‘Getting ready to purchase an annuity’.
Getting ready to purchase an annuity
We’ve chosen this as the default investment option for your contributions because we believe it offers the best combination of growth and security for most Telefónica Pension Plan members. If you don't make an active choice this is where your savings will automatically be invested.
What other investment options do I have?
You basically have two initial options. You can select a Lifestyle option or a self-style investment. With a Lifestyle option your contributions are invested in a fund or combination of funds selected by our Plan Trustees. As your retirement approaches, you are gradually switched into a potentially different fund(s) designed to offer stability in the lead-up to you taking your benefits. There are three different choices of Lifestyle investment of which one is the default investment of ‘getting ready to purchase an annuity’.
The second approach you could take is a Self-style investment option which gives you the choice about where you wish to invest your funds. To find out more about which option is most appropriate for you click here.
What is Salary sacrifice?
Salary sacrifice allows you to make your pension contributions before any National Insurance Contributions are taken from your pay. We’ve made salary sacrifice our default option for most employees.
It’s called salary sacrifice because you give up (or sacrifice) part of your salary back to Telefónica in exchange for the Company paying your pension contributions. On top of this, Telefónica will make additional contributions to your savings. The Salary sacrifice option will mean you have a lower salary (as you will be making the equivalent in contributions to your Pension).
The benefit of paying your pension contributions through salary sacrifice is that you may have lower National Insurance Contributions (because your salary is lower) and so you will benefit from a tax saving.
There are some implications of contribution in this way, see salary sacrifice for more information.
You can opt out of salary sacrifice at any time through Telefónica Rewards.