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Schlumberger�UK�Pension�Scheme
Chair’s�Annual�Governance�Statement (in�respect�of�the�period�1�January�2019 – 31�
December�2019)
This�statement�has�been�prepared�by�Schlumberger�Trust�Company�Limited,�the�Trustee�of�the�
Schlumberger�UK�Pension�Scheme�(‘the�Scheme’)�in�order�to�demonstrate�how�the�Scheme�has�
complied�with�the�governance�standards�introduced�under�The�Occupational�Pension�Schemes�
(Charges�and�Governance)�Regulations�20151.�This�Statement�applies�to�both�the�Personal�Money�
Fund�(PMF),�the�defined�contribution�element�of�Final�Salary�Benefit�(FSB)�section�(‘Blue�Section’)�
and�the�Defined�Contribution�(DC)�section�(‘Orange�Section’)�of�the�Scheme. Details�of�legacy�
Additional�Voluntary�Contribution (AVCs) arrangements�are�also�included�in�this�Statement.
General�Investment�principles
The�Trustee’s�general�investment�principles�are�as�follows:
� To�offer�a�suitable�default�investment�strategy�appropriate�for�the�profile�of�members�that�do�not�make�an�investment�decision taking into�account�their�expected�risk�tolerances while�optimising�investment�returns;�and�
� To�supplement�this�with�a range�of�suitable�self-select�investment�options�(including�alternative�self-select�lifestyle�strategies)�which�offer�sufficient�investment�choice�to�satisfy�members�differing�risk�appetites�and�risk�profiles,�and�retirement�objectives.
Investment�strategy�– relating�to�the�Scheme’s�default investment�option
Although�members�have�the�choice�of�where�to�invest,�the�Trustee�must�also�make�available�a�default�
strategy for�those�members�that�do�not�make�an�investment�decision�on�joining�the�Scheme.
The�objective�of�the�default�strategy�is�to�generate�capital�growth�over�the�long�term�through�exposure�
to�equities�and�diversified�assets�providing�an�appropriate�balance�between�risk�and�return.�In�the�
seven�years�prior�to�retirement,�the�strategy�aims�to�reduce�the�volatility�of�the�member’s�expected�
pension�fund�by�increasing�the�allocation�to�bonds�and�cash with�a�proportionately�lower�allocation�to�
growth�seeking�assets.�The�strategy�is�designed on�the�basis�that�the�majority�of�members�are�likely�
to�aim�to�maintain a�level�of�investment�growth at�retirement�age�and�move the�majority�of�their�PMF
to�a�drawdown�arrangement�which�allows�members�to�take�income�as and�when�required.
A formal strategic review�of�the�Scheme’s�default�strategy�was�completed�and�agreed�by�the�Trustee�
during�the�reporting�period�in�November�2019.
The review�was conducted�by�the�Trustee�in�conjunction�with�its�investment�advisers. In�conducting�
the�review,�the�Trustee�assessed whether�the�current�default�strategy�was still�appropriate�and�
considered�the�following�areas:�
� DWP�Guidance�states�that�the�default�fund�should,�as�far�as�is�reasonable,�take�account�of�
the�likely�characteristics�and�needs�of�the�employees�who�are�automatically�enrolled�into�it.
� Market�data�shows�that�there�is�a�general�trend�towards�people�taking�drawdown�at�
retirement�and�that�people�who�have�pension�pots�valued�at�£250,000�or�more�are�especially�
likely�to�take�drawdown.
�1�Inserted�into�Regulation�23�of�The�Occupational�Pension�Schemes�(Scheme�Administration)�Regulations�199�6�
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� Modelling�based�on�Scheme�data�suggests�that�a�typical�member�would�be�likely�to�build�up�a�
DC�fund�in�excess�of�£250,000�at�retirement�over�the�course�of�their�DC�journey.
� Since�the�pension�freedoms�were�introduced,�the�Scheme�has�seen�an�increase�in�transfers�
to�external�arrangements�and�a�reduction�in�the�number�of�members�opting�to�buy�an�annuity.�
It�is�anticipated�that�many�of�the�transfers may�be�moving�to�a�drawdown�structure.
� There�had�been�no�significant�changes�to�the�overall�profile�of�the�membership�or�any�
relevant�legislative�changes�since�the�existing�default�strategy�was�implemented�in�March�
2016.
Having�established�that�the�drawdown�target�remained�appropriate�for�the�default�strategy,�further�
analysis�was�undertaken�to�consider�the�continued�suitability�of�its�risk�and�return�profile,�including�the�
seven-year�switching�profile.��This�included�modelling�of�the�potential�outcome�for�a�member�over�
their�lifetime�in�the�Scheme.��The�review�concluded�that�the�overall�profile�of�the�current�default�
strategy�remained�well�aligned�with�the�retirement�needs�and�objectives�of�Scheme�members�and�
should�be�retained.
Acknowledging�that�the�overall�risk�profile and�design�of�the�default�strategy remained�appropriate,�
the�Trustee�also�considered�its�individual�fund�composition�taking�into�account long�term�
performance.�All�component�funds�had�either�met�or�exceeded�their�benchmarks�over�three�and�five�
year�periods�with�the�exception�of�the�UK�Equity�Fund�which�was�only�slightly�behind�its�benchmark�
and�the�Diversified�Growth�Fund�which�had�not�met its�benchmark�and�was�an�area�of�concern�for�the�
Trustee.�The�Trustee�also�considered�emerging�good�investment�practice.�As�a�result�of�the�review,�
the�Trustee�decided�to�make�the�following�changes:��
� Replace�the Diversified�Growth�Fund�(which�makes�up�25%�of�the�assets�in�the�growth�
phase)�with�a�10%�global�equity�portfolio�(consisting�of�25%�actively�managed�and�75%�
passively�managed�funds)�and�a�15%�broad�credit�portfolio. This�was�primarily�due�to�
concerns�around�the�performance�of�the�Diversified�Growth�Fund.�The�replacement�portfolio�
was�designed�to�ensure that�diversification�remained�in�the�portfolio�both�in�terms�of�fund�
classes�and�assets�within�each�class.
� Change�the Overseas/UK�equity�split�in�the�global�equities�from�60/40�to�70/30�in�order�to�
achieve�better�equity�allocation�by�market�capitalisation.
� Replace�Index�Linked�Gilts�with�Fixed�Income�Gilts�and�Corporate�Bonds�to�better�match�the�
pricing�of�non-inflation linked�annuities�as�these�are�the�typical�choice�of�members�who�opt�to�
buy�an�annuity.
All the�changes�set�out�in�this�section�were�implemented�during�the�first�quarter�of�2020. The�first�two�of�these�changes�relate�to�the�growth�phase�applicable�to�all�the�lifestyle�options.�The�final�change�just�relates�to�the�pre-retirement�de-risking�period�of�the�annuity�lifestyle.
Replacement�of�the�Diversified�Growth�Fund�as�a�self-select�option
Due�to�the�concerns�noted�above,�the�Trustee�also�decided�to�remove�the�Diversified�Growth�Fund�as�a�self-select�investment�option and�automatically�transition�members’�investments�in�this�fund�to�the�Scheme’s�Balanced�Multi-Asset Fund (BMAF).� In�order�to�expedite�this�change�and�ensure no�member�remained�in�an�under-performing�fund,�the�Trustee�effected�this�change�automatically.��The�Trustee�recognises�that�the�BMAF�is technically�considered a ‘default’ arrangement�under�the�regulations�and�as�such,�took�account�of�the�guiding�principles�in�selecting�it�as�an�appropriate�replacement.��
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In�selecting�the�BMAF, during�2019�the�Trustee�considered and�reviewed�its suitability�in�terms�of�objective,�risk�/�return�profile and historical performance,�concluding�that�it�offered�a�more�appropriate
‘multi-asset’�option�for�Scheme�members.
This�change�was�affected�during�the�first�quarter�of�2020 (outside�of�the�reporting�period).��The�Trustee�last�reviewed�the�BMAF�in�2018�and�will�formally�review�the�BMAF as�a�default�arrangement�alongside�the�Scheme’s�main�default�investment�option�every�three�years.
A�copy�of�the�Scheme’s�Statement�of�Investment�Principles,�including�those�relating�to�the�default�
strategies is�appended�to�this�statement.
Regular�investment�Monitoring
The�Trustee�delegates�detailed�investment�oversight�to�Schlumberger�Common�Investment�Fund�
Limited�(SCIFL)�but�also�maintains�an�investment�sub-committee�to�carry�out�appropriate strategic
investment�monitoring.�SCIFL and�the�Trustee take�advice�from�professional�investment�advisers�to�
ensure�that�they�have�the�appropriate�knowledge,�competency�and�experience�to�manage�the�
Scheme’s�assets.
The�Trustee regularly reviews�the underlying�performance�of�the�funds�within�the�default�strategy,�the�
alternative lifestyle�strategies�and�the�self-select�funds on�at�least�a�quarterly�basis. SCIFL�prepares�
detailed�quarterly�reports�for�the�Trustee�on the�performance�of�the�investment�managers�against�the�
agreed�benchmarks which�are set�out�in�the�Statement�of�Investment�Principles.�This�enables�the�
Trustee�to�review�performance�of�the�funds�and,�in�conjunction�with�its�investment�advisers,�make�
changes�to�the�investment�managers�if�required.
Financial�transactions
The�Trustee�has�appointed�Willis�Towers�Watson�to�provide�administration�services�for�the�Scheme.
Willis�Towers�Watson�has�a�dedicated�administration�team�in�place�to�service�the�Scheme.��All�
administration�tasks�are�logged�and�automatically�monitored�by�a�workflow�system�that�is�managed�
by�a�senior�member�of�the�dedicated�team. To�help�ensure�work�is�accurate,�all�administration�tasks�
completed�are�peer�reviewed (without�exception). Time�critical�financial�transactions�are�flagged�and�
prioritised.�The�administrator�has�a�separate�contribution�processing�team�which�ensures�investment�
and�banking�transactions�are�checked�and�fully�reconciled. There�is�also�a�separate�Treasury�Team�
which�monitors�the�Trustee’s�bank�account on a�daily�basis.
Processing�core�financial�transactions
The�Trustee has�an�agreed�Service�Level�Agreement�(SLA)�in�place�with�Willis�Towers�Watson,�which�
defines�the�agreed�targets�for�the�accurate�completion�of�core�financial�transactions (such�as�
contribution�investments,�investment�switches,�transfers�and�benefit payments) and�all�other�Scheme�
administration�tasks. Willis�Towers�Watson�aims�to�complete�95%�of�administration�tasks�within�SLA.
The�Pension�Administration�Team�Leader�reviews a�workflow�planning�report�on�a�daily�basis�to�
identify�cases�that�are�due�to�be�processed.�All�priority�cases�identified�from�this�report�are�highlighted�
to�the�Pension�Administration�Team�to�ensure�that�core�financial�transactions�are�processed�in�a�
timely�manner.
Monthly�contributions�are�paid�into�the�Trustee�bank�account�by�the�end�of�each�month.�The�units�
from�these�contributions�are�allocated�and�the�funds�reconciled�between�the�fourth�and�seventh�of�the�
following�month. The�total�amount�of�contributions�due�is�checked�against�the�cash�received�in�the�
trustee�bank�account�each�month;�any�discrepancies�are�reported�by�the�Treasury�Administrator�and�
followed�up�promptly. The�Cash�Management�Team�undertakes�monthly�reconciliations�between�
contribution�remittance�and�the�payment�schedule;�any�exceptions�identified�are�reported�and�
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followed�up�promptly�by�the�Team�Leaders. In�addition, as�part�of�the�AAF�audit�of�Willis�Towers�
Watson’s�administration�controls�and�processes (which�covered�the�period�from�1�October�2018�to�30�
September 2019),�KPMG’s commentary�confirmed�that�controls�tested�were�operating�with�sufficient�
effectiveness and�that, for�those�contributions inspected,�all had�been�loaded�and�dealt�with�promptly.
The�processing�of�investment�switches�and�transfers-in are�fully�automated�via�straight-through�
processing.��Retirement and�death�claim payments,�transfers-out�and�contribution�processing�are�
predominantly�automated,�with�some�manual�oversight�to�facilitate�checks�and�reconciliations.
Critical�administration�tasks�have�tighter�SLAs�than�less�critical�ones.��Death�cases�are�processed�
within�four�working�days�of�receipt�of�the�request. Retirement�payments�and�transfer�out�payments�
both�have�SLAs�of�five�working�days�from�when�all�of�the�requirements�are�received.�Switches�can�be�
initiated�by�members�on�ePA�and�are�processed�within�two�working�days�as�they�are�fully�automated.
Willis�Towers�Watson prepares�detailed�reports�of�performance�against�SLAs�which�are�evaluated�by�
the�Trustee�on�a�quarterly�basis at�each�main�Board�meeting.��These�reports�include�full�asset�
reconciliations�and�commentary�on�any�member�complaints.��
Over�the�reporting�period,�overall�quarterly�performance�against�SLAs�ranged�from�89%�to�94%�(with�
three�of�the�four�quarters�recording�performance�of�at�least�90%). The�SLA�performance�for�transfer�
out�payments�declined�a�little�in�quarters�three�and�four�of�2019�due�to�delays�in�receiving�third�party�
information�needed�to�verify�FCA�and�HMRC�registration�status�as�part�of�enhanced�due�diligence�
requirements.�The�administration�team�did�keep�members�informed of�the�reasons�for�these�delays�at�
the�time. 100%�of�DC�investment�transactions�relating�to�members’�investment�and�contribution�
decisions�were�achieved�within�SLA�target�for�two�of�the�four�quarters. Performance�against SLAs�for�
the�DC�investment�transactions�for�the�other�two�quarters�were�94%�and 91%. The�DC�investment�
transaction�tasks�that�did�not�meet�SLA�related�to�changes�to�a�member’s�Target�Retirement�Age�and�
these�changes�did�not�affect�their�individual�investment�of�contributions.
In�addition�to�the�formal�quarterly�administration�monitoring�process,�the�Schlumberger�Pensions�
Team�continues�to�hold�weekly�calls�with�the�Willis�Towers�Watson�administration�team�in�order�to�
monitor�and�resolve�any�administration�issues.
Administration�issues
The�historic�maternity�pay�contribution�issues reported�last�year have�now�been�corrected�on�an�
ongoing�basis.�The�maternity�pay�errors�that�were�made�between�2012�and�March�2017�have�now�
been�rectified�and�members�have�been�informed�in�writing�about�these�amendments.� Corrections�are�
still�required�in�respect�of�the�maternity�pay�errors�that�occurred�between�April�2017�and�March�2018.�
This�work�is�ongoing�and�member�accounts�will�be�fully�reconciled�as�well�as�compensation�provided�
for�investment�losses�to�ensure�members�suffer�no�detriment.�
WTW�has�been�working�closely�with�the�Schlumberger�Pensions�Team�on�data�cleansing�activities,�
specifically�ensuring�that�common�and�conditional�member�data�is�correct.�The�Pensions�Team�has�
investigated�the�reasons�for�any�missing�member�data�identified�and�DWP�traces�have�been�issued�
where�necessary�to�obtain�missing�information.�
Wider�oversight
The Trustee’s�Risk�&�Compliance�subcommittee�meet�with�the�administration�team�to�undertake�its�
annual�evaluation�of process�and�risk�controls. This�highlighted�that�these�remained�robust.
At�the�close�of�the�reporting�period,�with�the�support�of�Willis�Towers�Watson,�the�Trustee�revisited�its�
review of�the�Scheme’s�governance�processes�and�internal�controls�and was�satisfied�that�these�
remain�compliant�with�the legal�requirements�as�set�out�in�the�Pensions�Regulator’s�updated�DC�
Code�of�Practice�No.�13�in�the�sections�covering ‘Scheme�management�skills’�and�‘Administration’.�
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Conclusion�
Based�on the Trustee’s�regular�monitoring�of�administration�performance�and�the results�of�its�
process�evaluation,�the�Trustee�is�satisfied�that�the�Scheme’s�core�financial�transactions�have�been�
processed�promptly�and�accurately�during�the�Scheme�year.�
Charges�and�transaction�costs
All�PMF�investment�and�administration�costs�are�met�by�the�Scheme�sponsor on�behalf�of�members.��
Members�do�not�pay�any�charges. This�is�a�defining�feature�of�the�Scheme�in�which�over�99%�of�the�
Scheme’s�DC�assets�are�invested.��In�addition,�the�Trustee�considers�its�robust�governance�
approach,�sophisticated�investment�design�and�dedicated�communication�and�engagement�strategy�
as�key�factors�which ensure�that�members�receive�excellent�value�for�money.
The�only�DC�element�of�the�Scheme where�members�do�pay�charges�relates�to�the�legacy�external�
Additional�Voluntary�Contribution�(AVC)�policies,�in�which�a�handful�of�members�remain.��These�are�
considered�below.
AVCs
At�the�end�of�the�reporting�period,�The�Trustee�held�external�AVC�policies�with�Equitable�Life (which�
was�transferred�to�Utmost Life�and�Pensions�Limited (‘Utmost’) just�outside�of�the�reporting�period�on�
1�January�2020) and�Aviva. The�small�number�of�members�invested�in�these�policies�bear�the�
investment and�administration�costs�associated�with�these�policies and�the�Trustee�has�taken�account�
of�the�statutory�guidance in�reporting�the�costs�for�these�funds.
Under�Equitable�Life,�during�the�reporting�period�members only had�investments�in�the�With-Profits�
Fund.�The�charges�applying for�the�With-Profits�Fund�are�deducted�within�the�calculation�to�determine�
the�annual�bonus�payment�and�this�is�not�explicitly�disclosed.�However,�Equitable�Life�has�confirmed
that�its�annual�administration�cost�was�1%�of�the�fund�holding�and�reported�that underlying�Fund�
transaction�costs�for�the�period�were 0.07%.�It�should�be�noted�that�Equitable�Life�transferred�its�
business�to�Utmost from�1�January�2020�and�all�assets�invested�in�the�Equitable�Life�With-Profits�
Fund�were�transferred�to�the�Utmost�Secure�Cash�Investment�Fund.�As�this�took�place�during�the�
2020�Scheme�Year,�it�will�be�reported�on�in�full�within�the�next�Chair’s�Statement.�
Under�Aviva,�during�the�reporting�period�members�only�had�investments�in�the�With-Profits�Fund.�The�
member�charges�applying�for�the�With-Profits�Fund�are�deducted�within�the�calculation�to�determine�
the�annual�bonus�payment.�Aviva�has�confirmed�that�the annual�administration�cost was�0.60%�and
reported underlying�transaction�costs�for�the�period�were 0.09%.
The�Trustee�continues�to�monitor�each�provider’s�annual�bonus�declaration�as�part�of�its�ongoing�
investment�policy but�see�the�section�below�for�further�information�on�Equitable�Life.
Illustration�showing�the�compound�effect�of�costs�and�charges
The�Occupational�Pension�Schemes�(Administration�and�Disclosure)�(Amendment)�Regulations�2018�
require the�Trustee�to�produce a�‘pounds�and�pence’�illustration showing�the�compounded�effect�of�
costs�and�charges.�The�Trustee�has�prepared�a�set�of�illustrations in�respect�of�the�former�Equitable�
Life (now�with Utmost) and�Aviva�AVCs and�these�can�be�found�in�the�Appendix.�The�Trustee�has�not�
prepared�a�‘pounds�and�pence’�illustration�for�the�main�fund�range�under�the�PMF as�members�do�not�
pay�administration�or�investment�costs in�relation�to�these�funds.
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AVC Value�for�Money�(VFM)
During�the�reporting�period,�Equitable�Life�received�High�Court�approval�for�its�with-profits�Guarantee�
Exchange�Scheme�with�policy�values�uplifted�in�lieu�of�the�removal�of�the�with-profits�guaranteed�
growth�rate�from�1�January�2020�alongside�the�transfer�of�its�business�to�Utmost. In�light�of�these�
changes,�the�Trustee�reviewed�the�options�it�had�available�in�relation�to�these�AVCs�and�made�the�
decision�to�transfer�them�to�the�main�fund�range�within�the�PMF.�The�Trustee�believes�this�will�provide�
better�value�than�retaining�the�AVCs�with�Utmost as�members�will�bear�no�further�charges�and�will�be�
invested�in�a�range�of�robustly�monitored�funds�that�have�been�specifically�designed�for�the�Scheme’s�
membership.��This�transfer�is�scheduled�to�take�place�in�2020.
During�the�reporting�period,�the�Trustee�also�undertook�a�review�of�the�Aviva�With-profits�policy,�considering�the�most�recent�bonus�rates�and�policy�features�(such�as�communication�and�administration�support)�against�the�charges�and�transaction�costs,�concluding�that�this�policy�provides�reasonable�value�for�members. This�review�follows�on�from�the�Trustee’s�previous�reviews�of�its�Aviva�policy�undertaken�through�2017�and�into�2018. The�Trustee�is�further�assessing�whether�member�value�would�be�enhanced�if�the Aviva With-profits investments�were�transferred�to�the�main�fund�range�within�the�PMF. Due�to�the�specific�characteristics�of with-profits�funds�(particularly�the�capital�value�guarantee�and�bonus�distribution)�this�review�is�complex�and�was�ongoing�as�at�the�end�of�the�reporting�period. It�is�expected�to�complete�in�2020�and�will�be�reported�on�in�full�in�next�year’s�statement.
Trustee�knowledge�and�understanding�(TKU)
The�Trustee�has�a�TKU�process�in�place�which�enables�it, together�with�professional�advice,�to�exercise�its�function�as�Trustee�of�the�Scheme.��Formal�training is�typically�provided�at�each�quarterly�meeting�and�over�the�reporting�period,�DC�related�topics included:
� Changes�to�pensions�legislation�relating�to�auto-enrolment,�The�Pensions�Regulator�and�The�
Pensions�Ombudsman�provided�by�Keystone�Law.
� ‘DC�Code�of�Practice’�by�the�Scheme’s�advisers,�Willis�Towers�Watson
� ‘Sustainable�investment�(ESG)’�provided�by�the�Scheme’s�advisers,�Willis�Towers�Watson.�
This�ESG�training�helped�inform�the�trustees�about�changes�required�to�the�Statement�of�
Investment�Principles this�year.
� ‘Changes�to�Trustee�reporting�requirements�(including�updates�to�the�SIP)�provided�by�the�
Scheme’s�advisers,�Willis�Towers�Watson�
� DC�investment�training�covering�diversified�private�markets�and�alternatives provided�by�Isio,�
the�Trustee’s�investment�advisers.�
Additional�areas�were�covered that specifically�relate to�the�Defined�Benefit�Section�of the�Scheme�which�have�not�been�reported�in�this�Statement.
TKU�assessment
In�September�2019,�the�Trustee�assessed�its�depth�of�knowledge and�understanding using�a�questionnaire�based�on�The�Pension�Regulator’s�Code�of�Practice�7 covering:
1. The�law�relating�to�trusts
2. The�law�relating�to�pensions
3. The�basic�principles�relating�to�the�
investment�of�assets
4. Running�a�defined�contribution�
occupational�arrangement
5. Investment�choice�and�the�implications�
for�members
6. Fund�management
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7. A�working�knowledge�of�the�Scheme’s�
own�trust�documentation
8. A�working�knowledge�of�the�Scheme’s�
Statement�of�Investment�Principles
9. A�working�knowledge�of�the�Scheme’s�
other�relevant�documents�
10. Scheme�operation
.�
This�assessment�was�independently�run�on�behalf�of�the�Trustee by Willis�Towers�Watson.�The�results�showed�the�Trustee�collectively�had�a�good level�of�knowledge and�understanding�in�all�the�above�areas.
Following�the�assessment,�a Trustee�Training�Plan�was implemented for�2020�based�on�its results�particularly to�further�strengthen�its�depth of�knowledge and�understanding�in�certain�areas.�Areas�of�training�planned�for�2020�include�investment�issues�(for�example�investment�choices�for�DC�members),�a�refresh�on�the�legal�aspects�of�pension�schemes�and�governance�documentation.�
The�Trustee�plans to�undertake another�TKU�assessment�in�2021�to�assess the�extent�to�which the�training�has�been�successful�in�closing�any�knowledge�gaps.
The�Trustee’s�wider�approach�to�meeting�the�TKU�requirements�also�includes:
� Maintenance�of�a�Business�Plan and�a�set�of�Key�Performance�Indicators�(KPIs),�which�
incorporates�a�framework�for�the�Trustee’s�self-evaluation�of�performance�and�identification�of�
any�pertinent�knowledge�gaps by�reference�to�the�Pensions�Regulator’s�Trustee�toolkit.��This�
process�is�collectively�used�as�the�basis�for�confirming�that�the�Trustee�and�its�advisors�are�
properly�exercising�their�respective�duties�and�also�drives�the�agenda�for�formal�training�over�
the�year.�
� New�Trustee Directors’ needs�are�assessed�and�appropriate�training�is�provided�within�the�
first�six�months,�typically in�conjunction with�the�Scheme’s�advisers.
� Planned�relevant�training�is�incorporated�into�the�quarterly�meetings�– with�dedicated�slots�for�
external�speakers.
� Training�from�advisers�on�topical�items�is�provided quarterly�in�the�form�of�‘hot�topics’�updates
– with�pertinent�areas�of�focus�highlighted.
� All�training�and�attendance�at�appropriate�seminars�are�recorded�under�the�minutes�of�the�
formal�Trustee�quarterly�meetings.
� All�Scheme�documents�are�reviewed�by�the�Trustee�and�its advisers�in�line�with�the�Business�
Plan�or�sooner�if�required�for�specific�reason.��Recent�examples�where�the�Scheme’s�
governing documentation�has�been�consulted�have�generally�concerned�Defined�Benefit
issues�within�the�Scheme�such�as�a�review�of�the�ill-health�and�serious�ill-health�policies.
� All�Scheme�documents,�including�documents�setting�out�the�Trustee’s�current�policies�and�
meeting�papers�etc. are�available�on�a�dedicated�online�Trustee�site�(OnePlace),�to�which�all�
Trustees�have�direct�access.
� All�Trustees�have�completed�the�Pensions�Regulator’s�trustee�toolkit�or�are�working�towards�
completion�(this�is�actively�monitored and�reported�on�annually�as a KPI).
� When�considering�Scheme�design�change,�or�ensuring�legislative�requirements�are�met,�the�
Trustee�consults the�Scheme’s�Trust�Deed�&�Rules�and�associated�documents�and�seek�
appropriate�professional�advice. Any�example�of�this�over�the�reporting�period�would�be�
�
8��
�
reference�to�the�SIP�whilst�reviewing�the�Scheme’s�default�design�and�future�investment�
policy.
The�Trustee�is�confident�that�the�above�framework,�in�conjunction�with�the�appropriate�professional�
advice�from�its�advisers,�provide�it�with�sufficient�knowledge�and�understanding to�properly�exercise�
its�function�of�Trustee�of�the�Scheme.��
Impact�of�Covid�19
Since�the�year-end,�consequent�on�the�global�impact�of�the�Coronavirus�(Covid-19)�pandemic,�the�value�of�investment�assets�and�liabilities�(across�all�categories)�have�been�impacted.�This�is�a�non-adjusting�subsequent�event,�as�it�does�not�impact�the�valuation�of�assets�as�at�the�year-end�date.�It�is�not�possible,�at�this�time,�to�quantify�the�change�in�market�value�in�a�meaningful�way,�due�to�ongoing�volatility,�as�the�situation�is�fluid�and�unpredictable.
At�an�operational�level,�the�Trustee�is�working�with�the�administrators�to�minimise�any�disruption�to�administration�service�delivery.�For�example,�there�may�be�some�delays�to�responding�to�member�enquiries�and�processing�of�transactions.�The�Trustees�are�keeping�this�matter�under�regular�review.
��
This�Governance�Statement�was�approved�by�the�Trustee�and
Signed�by�the�Chair�on�behalf�of�the�Trustee�of�the�Scheme:
�
Date:�
�
APPENDIX�1:�Illustration�of�the�effect�of�costs�and�charges�on�a�member’s�external�AVC�pension�pot�in�today’s�terms�(Aviva�and�Utmost�policies�only)�
APPENDIX�2:�SIPs�
29th�July�2020
S M White
Appendix - Illustration of the effect of costs and charges on a member’s external AVC pension pot in today’s terms (Aviva and Utmost policies only)
The illustration has been prepared in accordance with the relevant statutory guidance and reflects the impact of costs and charges for members who hold AVCs in the Aviva With-profits Fund and the Utmost Cash Fund (formally Equitable Life With-profits Fund). The illustrations are projected to the Scheme’s Normal Retirement Age (NRA) of 60. The Utmost AVC policy has a NRA of 65 and so for completeness, the illustration also includes an example member aged over 60 with a target retirement age of 65.
The illustrations show the projected fund values in today’s terms based on certain assumptions before and after charges so that the potential impact of charges is clearly shown. The assumptions used are intended to model the behaviour of assets and market conditions over the long term. They are not meant to be reflective of the possible, or even likely, course of those investment markets in the short term. The return forecasts are not intended to imply, nor should be interpreted as conveying, any form of guarantee or assurance of the future performance of the funds in question, either favourable or unfavourable.
The Utmost Cash Fund illustration shows negative ‘real’ growth as longer-term cash returns are not expected to keep pace with inflation. Members should be aware that the Trustee’s intention is to transition the Utmost Cash Fund investments into more financially rewarding funds though the Scheme PMF by year end.
Example Member Years to NRA Aviva With-profits Fund
Before charges After charges Youngest member (Age 39)
1 £610 £600 3 £620 £610 5 £630 £610
10 £660 £620 15 £700 £630 20 £730 £640 21 £740 £640
Average member (Age 55)
1 £7,070 £7,020 3 £7,210 £7,070 5 £7,360 £7,110
Approaching retirement (Age 59)
1 £40,400 £40,120
Example Member Years to NRA
Utmost Cash Fund
Before charges After charges
Youngest member (age 45)
1 £7,920 £7,880
3 £7,760 £7,640
5 £7,610 £7,420
10 £7,240 £6,870
15 £6,880 £6,370
Average member, also approaching NRA (age 57)
1 £5,940 £5,910
3 £5,820 £5,730
Post NRA member (approaching policy NRA of 65)
1 £15,840 £15,760
Assumptions and notes
1. Projected pension account values are shown in today’s terms.
2. Costs/charges that are shown as a monetary amount and reductions are made halfway
through the year.
3. Annual investment returns, less costs/charges are assumed to be applied at the end of the
year.
4. Charges and costs are deducted before applying investment returns.
5. Inflation is assumed to be 2.5% each year.
6. No additional contributions are assumed.
7. Values shown are estimates and are not guaranteed.
8. The real projected growth rates for each fund are as follow:
• Aviva With-profits Fund – 1.00%
• Utmost Secure Cash Fund – -1.00%
9. Transaction costs and other charges for the period have been provided by Aviva (0.6 p.a.
charge plus 0.09% transaction costs and Utmost (0.5% p.a. no transaction costs).
10. Pension scheme’s Normal Retirement Age (NRA) is 60 but the Normal Retirement Date for
the Utmost policy is 65 and so an additional projection has been included.
11. Example members (Aviva With-profits Fund)
• Youngest: age 39, starting fund value: £600 (no further contributions)
• Average: age 55, starting fund value: £7,000 (no further contributions)
• Approaching retirement: age 59, starting fund value: £40,000 (no further
contributions)
12. Example members (Utmost Cash Fund)
• Youngest: age 45, starting fund value: £8,000 (no further contributions)
• Average (approaching NRA): age 57, starting fund value: £6,000 (no further
contributions)
• Post NRA (approaching policy NRD of 65): age 64, starting fund value:
£16,000 (no further contributions)
S Smoker
G Park
Signed for and on behalf of the Directors ofthe Schlumberger Trust Company Ltd