Chair’s DC Governance Statement,
covering 1 April 2022 to 31 March 2023
Introduction and members’ summary

1.

The UBM Pension Scheme (the “Scheme”) is an occupational pension scheme.
The Scheme is a ‘hybrid’ pension scheme, in that it has a large defined benefit(“DB”) section and a smaller defined contribution (“DC”) section. It has also
historically provided Additional Voluntary Contribution (“AVC”) arrangements formembers.
Governance requirements apply to DC pension arrangements (a DC pension
scheme is where employee and employer contributions are paid into it, and themember chooses their investments, but bears the investment risk), to help
members achieve a good outcome from their pension savings. We, the Trusteeof the UBM Pension Scheme, are required to produce a yearly statement (signedby the Chair of Trustees) covering:•the design and oversight of the default investment option (where one exists)•

processing of core financial transactions (ie administration of the Scheme);•

the charges and transaction costs borne by members for the investment
options members can select or have assets in;•an illustration of the cumulative effect of these costs and charges;•net returns of the investment options;•how the value members obtain from the Scheme is assessed; and•

Trustee knowledge and understanding.

2.

Default arrangements

The Scheme does not offer a ‘default arrangement’ option (a fund into which
members are automatically invested unless a Scheme member decides
otherwise). This is because the Scheme is closed to new members andcontributions and hence is not being used as a ‘Qualifying Scheme’ for autoenrolment purposes.
Historically, members had to select which fund to invest their DC / AVC
contributions in, from a range of available “self-select” fund options with Legal &v6.7

General and Clerical Medical. Some members also hold with-profits funds with
Clerical Medical and Prudential. The funds available to members are detailed inthis Statement. Members are able to switch their holdings between the available
funds by contacting the Scheme’s current administrator, Capita Pension
Solutions Limited (“Capita”).

3.

Requirements for processing core financial transactions

The processing of core financial transactions is carried out by the administrator ofthe Scheme, Capita. Core financial transactions include (but are not limited to):processing of transfers in and out of the Scheme, transfers of assets between
different investments within the Scheme, and payments to members /beneficiaries.
We have received assurance from Capita that there are adequate internal
controls to ensure that core financial transactions (such as transfers of members’
funds between investment options) for the Scheme are processed promptly andaccurately.
We receive copies of Capita’s annual internal controls report which covers
pension scheme administration. These internal controls are also tested by anindependent third-party auditor.
Capita’s latest annual internal controls report, to 31 December 2022, contained
no exceptions, which is an improvement from the previous two audits.
Based on the above, we are satisfied that Capita has taken appropriate actions toimprove its internal administration processes.
The Scheme has a Service Level Agreement (“SLA”) in place with theadministrator covering both the Scheme’s DB and DC (including AVC) assets.
This covers minimum standards for the accuracy and timeliness of all corefinancial transactions. Examples of the key processes adopted by theadministrator to help it meet the SLA are as follows:•financial transactions require approval from at least one “authorised person”;•checklists are maintained and followed for key workstreams; and•audit trials are maintained.

To help us monitor whether service levels are being met, we receive quarterly
reports about the administrator’s performance and compliance with the SLA.
These quarterly reports cover the administration of the DB, DC and AVC assets.
1

Any issues identified as part of our review processes would be raised with theadministrators immediately, and steps would be taken to resolve the issues.
The performance against the agreed SLAs specifically in relation to the Scheme’s
DC arrangements was 60% over the period over the 12 months to31 March 2023. This is an improvement from the 48% average over the previous
12-month period. We acknowledge that in some cases delays are caused byfactors outside of Capita’s control, for example as a result of third-party
involvement (eg delays in receiving information from the Scheme’s investment
managers, or from members’ financial intermediaries). We expect Capita to liaise
with the investment managers to try and improve the reporting / response times.
More generally, we discuss individual member cases on a day-to-day basis withthe pensions management team at Informa and Capita.
Based on our review processes, we are satisfied that over the period covered bythis Statement:•

the administrator was operating appropriate procedures, checks and controls,
and operating within the agreed SLA;•

there have been no material administration issues in relation to processing
core financial transactions; and•core financial transactions have been processed promptly and accurately toan acceptable level during the Scheme year.

We note that Capita suffered a well-publicised cyber-attack on its systems in
March 2023 which resulted in significant data breaches across its business. Thisis commented on within Capita’s internal controls report. We have been working
with Capita since this event to understand the extent to which the Scheme wasaffected. A significant number of Scheme members were affected, and so wetook appropriate steps to notify and assist the impacted members.

4.

Member-borne charges and transaction costs

We are required to set out the on-going charges incurred by members over theperiod covered by this Statement, which are annual fund management charges
plus additional fund expenses, such as custody costs, but excluding transaction
costs; this is also known as the total expense ratio (“TER”). The TER is paid by
the members and is reflected in the unit price of the funds.
The stated charges are shown as a per annum (“pa”) figure and exclude
administration charges, since these are not met by the members.
v6.7

We are also required to separately disclose transaction cost figures. In thecontext of this Statement, the transaction costs shown are those incurred when
the Scheme’s fund managers buy and sell assets within investment funds, but
are exclusive of any costs incurred when members invest in and switch between
funds. Transaction costs are borne by members.
The charges and transaction costs have been supplied by the Scheme’s DC andAVC providers. When preparing this section of the Statement we have taken
account of the relevant statutory guidance. Under the prescribed way in whichtransaction costs have been calculated it is possible for figures to be negative,
where market movements are favourable between the time a trade is placed and
it is executed. We have shown any negative figures in the tables for the year asprovided, but for the costs and charges illustrations we have used zero where atransaction cost is negative to give a more realistic projection (ie we would not
expect transaction costs to be negative over the long term).

Legal & General DC and AVC fund costs (% pa)
Fund nameTER

Transaction costs

Multi-Asset
Global Equity 70:30 Index
Global Equity 50:50 Index
UK Equity Index
World (ex UK) Equity Index
North America Equity Index
Europe (ex UK) Equity Index
Japan Equity Index
Asia Pac (ex-Jap) Dev Equity Index
World Emerging Markets Equity Index
Ethical UK Equity Index
Managed Property
Overseas Bond Index – GBP Hedged
AAA-AA Fixed Interest Over 15y
Target Duration FundOver 5y Index-Linked Gilts
Over 15y Gilts Index
All Stocks Gilts Index
Cash

0.10
0.14
0.12
0.12
0.13
0.10
0.11
0.10
0.11
0.47
0.21
0.80
0.18
0.06

0.04
0.04
0.05
0.03
0.06
0.07
0.02
0.020.02
0.05
0.02
-0.49
0.00
0.00

0.03
0.03
0.10
0.07

0.21
0.19
0.15
0.04

2

Clerical Medical DC fund options (% pa)
Fund nameWith-profits*
Cash Fund

TER
1.00
1.00

•

The “before costs” figures represent the savings projection assuming aninvestment return with no deduction of member borne charges or transaction
costs. The “after costs” figures represent the savings projection using thesame assumed investment return but after deducting member borne charges
and an allowance for transaction costs.

•The transaction cost figures used in the illustration are the average of those
provided by the managers over the past three years (as five year averages
are not yet available), subject to a floor of zero (so the illustration does notassume a negative cost over the long term).

•The illustration is shown for a selection of the Legal & General DC Funds
available to members. The three funds shown in the illustration are:Transaction costs
0.33
0.02

Prudential DC and AVC fund options (% pa)
Fund nameWith-profits*

TER
1.00

Transaction costs
0.20**

0.88
0.88
0.88
0.88
0.88
0.880.88
0.88
0.88
0.88
0.88
0.88

Transaction costs
0.04
0.07
0.00
0.06
0.09
0.05
0.09
0.06
0.10
0.00
0.04
0.04

Aviva AVC fund options (% pa)
Fund name
Aviva Global Equity
Aviva UK Equity
Aviva US Equity
Aviva European Equity
Aviva Pacific Equity
Aviva Mixed Invest (40-85% Shares)
Aviva Property
Aviva Global Bond
Aviva Gilt
Aviva Deposit
Aviva With-Profits*
Aviva With-Profits Guaranteed*TER▪

the fund with the most amount of assets invested – the L&G Global Equity
50:50 Index Fund;▪

the fund with highest annual member borne costs – the L&G Managed
Property Fund; and▪

the fund with lowest annual member borne costs – the L&G AAA-AA
Fixed Interest Over 15y Target Duration Fund.

*With-Profits Funds aim to deliver performance based on a mix of assets whilst smoothing returns
through periods of market volatility. These typically include an element of guaranteed performance(through annually declared bonus rates) and a terminal bonus when members take their money out of
the With-Profits Fund. The With-Profits funds have “notional” TERs; in practice most With-Profitsfunds include a guaranteed minimum bonus rate and so returns are not directly impacted by the TER.
** Due to availability of data, this is as at 31 December 2022.

Illustration of charges and transaction costs
The following table sets out an illustration of the impact of charges andtransaction costs on the projection of an example member’s pension savings. In
preparing this illustration, we had regard to the relevant statutory guidance.

v6.73

Notes
••

••

v6.7

Values shown are estimates and are not guaranteed. The illustration does
not indicate the likely variance and volatility in the possible outcomes fromeach fund. The numbers shown in the illustration are rounded to the nearest£100 for simplicity.

•The Scheme is closed to contributions, so no assumptions about contribution
rates and salary (starting salary or salary growth) have been made.

•The projected annual returns (before costs) used are as follows:

Projected pension pot values are shown in today’s terms, and do not need tobe reduced further for the effect of future inflation. The long-term annualinflation assumption used is 2.5%.
The starting pot size used is £9,500. This is the approximate average(median) pot size for a DC Section member.
The projection is for 20 years, which we believe to be reasonable, given themajority of the members with DC benefits are expected to retire within thenext 20 years.

5.

▪

L&G Global Equity 50:50 Index Fund: 4.0% above inflation▪

L&G Managed Property Fund: 4.0% above inflation▪

L&G AAA-AA Fixed Interest Over 15y Target Duration Fund: 1.0% aboveinflation▪

No allowance for active management outperformance has been made.

Investment returns

This section shows the annual return, after the deduction of member borne
charges and transaction costs, for all investment options in which member assets
were invested during the scheme year.

4The With-Profits fund returns stated are that of the underlying investments, which
are the only figures that can be quoted. With Profits Funds are designed tosmooth the returns members receive over their investment term and underlying
investment returns are not the only factor determining the return members
receive. In particular the Clerical Medical and Prudential With Profits Funds haveminimum guaranteed annual bonus rates of 4% and 0% respectively.

Clerical Medical fund options – net returns to 31 March 2023
Fund nameOne YearNet return (%)

With-profits*Cash Fund

Fund name

Prudential fund options – net returns to 31 March 2023

Multi-Asset
Global Equity 70:30 Index
Global Equity 50:50 Index
UK Equity Index
World (ex UK) Equity Index
North America Equity Index
Europe (ex UK) Equity Index
Japan Equity Index
Asia Pac (ex-Jap) Dev Equity Index
World Emerging Markets Equity Index
Ethical UK Equity Index
Managed Property
Overseas Bond Index – GBP Hedged
AAA-AA Fixed Interest Over 15y Target
Duration FundOver 5y Index-Linked Gilts
Over 15y Gilts Index
All Stocks Gilts Index
Cash

Two years
Net Returns(% pa)

-4.5
1.7
2.4
2.9
-1.1
-2.6
8.0
1.9
-3.9
-4.7
3.3
14.1
-5.4
-27.5

-0.2
7.2
6.7
7.8
6.5
7.9
7.0
-0.3
-0.9
-4.4
7.9
18.0
-4.6

-30.5
-29.8
-16.4
2.2

-18.2
-14.7
-19.3
-11.0
1.1

Net Returns(% pa)

Legal & General fund options – net returns to 31 March 2023
One yearNet return (%)

Two years

Fund name

-9.0
1.3

One YearNet return (%)

-0.4
0.6

Two years
Net Returns(% pa)

With-profits*-2.7

3.9

Aviva AVC fund options – net returns to 31 March 2023
Fund nameOne Year
Net Return (%)

Two years
Net Returns(% pa)

Aviva Global Equity
Aviva UK Equity
Aviva US Equity
Aviva European Equity
Aviva Pacific Equity
Aviva Mixed Invest (40-85% Shares)
Aviva Property
Aviva Global Bond
Aviva Gilt
Aviva Deposit
Aviva With-Profits
Aviva With-Profits Guaranteed-2.2
2.7
-5.9
7.9
-3.9-3.4
-13.
-9.7
-16.0
1.3
-0.7
-0.6

5.0
7.2
6.4
7.4
-1.5
1.7
1.5
-6.7
-11.2
0.3
n/an/a*Clerical Medical and Prudential With-Profits returns shown are for the 12 months to 31 December
2022, as both Clerical Medical and Prudential only provide calendar year performance data, net of thenotional TER.

v6.75

6.

Value for members assessment

We are required to assess each year the extent to which member borne charges
and transaction costs represent good value for members and to explain thatassessment. There is no legal definition of ‘good value’ which means that
determining this is subjective. Our general policy in relation to value for member
considerations is set out below.
Our objective for the DC arrangements within the Scheme is to provide memberswith access to an appropriate and cost-effective range of investment options,reflecting the membership profile and the variety of ways that members can draw
their benefits in retirement.
We review all member-borne charges (including transaction costs whereavailable) annually, with the aim of ensuring that members are obtaining value formoney given the circumstances of the Scheme. The last review was carried outin September 2023, and covered the Scheme Year from 1 April 2022 to 31 March2023.
Our assessment included a review of the performance of the Scheme’s
investment funds (after all charges and transaction costs) in the context of theirinvestment objectives. There were no material concerns with the performance
figures, noting that most of the funds are passive and therefore aim to provide areturn close to that of their benchmark return, gross of fees. Some of the Aviva
unit-linked funds have underperformed their respective objective or benchmark
over the Scheme Year from 1 April 2022 to 31 March 2023 and charges are (withthe exception of the property fund) higher than equivalent L&G fund options.
However these funds are actively managed and therefore short-term
underperformance is to be expected from time to time.
We also note that administration charges in relation to the L&G funds are met by
the employer, rather than by individual members.
Our investment advisers have confirmed that the fund charges are reasonable forthe types of fund available to members, and particularly competitive for the main
DC and AVC fund range provided by L&G.
We note that value for money does not necessarily mean the lowest fee, and theoverall quality of the service received has also been considered in thisassessment. In carrying out the assessment, we also consider the other benefits
members receive from the Scheme, which include:

v6.7

•

our oversight and governance, including ensuring the Scheme is compliant
with relevant legislation, and holding regular meetings to monitor the Schemeand address any material issues that may impact members;•the wide range of investment options and strategies; and•the efficiency of administration processes and the extent to which theadministrator met or exceeded its service level standards.

As detailed in the earlier section covering the processing of core financialtransactions, we are comfortable with the quality and efficiency of theadministration processes.
We believe that the transaction costs provide value for members as the ability totransact forms an integral part of the investment approaches and expect this tolead to greater investment returns net of costs over time.
Overall, we believe that members of the Scheme are receiving good value formoney for the charges and cost that they incur, for the reasons set out in thissection.

7.

Trustee knowledge and understanding

We are required to maintain appropriate levels of knowledge and understanding
to run the Scheme effectively. We have measures in place to comply with thelegal and regulatory requirements regarding knowledge and understanding ofrelevant matters, including investment, pension and trust law. Details of how theknowledge and understanding requirements have been met during the periodcovered by this Statement are set out below.
With the help of our advisers, we regularly consider training requirements toidentify any knowledge gaps. Our advisers proactively raise any changes ingovernance requirements and other relevant matters as they become aware ofthem. Our advisers typically deliver training on such matters at Trustee meetings
if they are material. During the period covered by this Statement, we received
training on:•DWP’s new stewardship guidance (which culminated in the Trustee agreeing
to set Climate Change as its key stewardship priority to help drive
engagement with the Scheme’s investment providers).

•

Climate risk: concepts, impact on pension plans, and climate risk disclosurerules.

6

Additionally, we receive quarterly updates on topical pension issues from ourinvestment advisers.
We are familiar with and have access to copies of the Scheme’s governing
documentation, including the Trust Deed & Rules and SIP (which sets out thepolicies on investment matters). In particular, we refer to the Trust Deed andRules as part of considering and deciding to make any changes to the Scheme,and the SIP is formally reviewed at least triennially and as part of making any
change to the Scheme’s investments. Further, we believe that we have sufficientknowledge and understanding of the law relating to pensions and trusts and of
the relevant principles relating to the funding and investment of occupational
pension schemes to fulfil our duties.
The majority of the Trustee Directors have completed the Pensions Regulator’sTrustee Toolkit (an online learning programme, designed to help trustees ofpension schemes meet the minimum level of knowledge and understandingrequired by law). Furthermore, some of the Trustee Directors’ prior experience
includes work in finance, law and / or pensions, including relevant professional
qualifications.
Considering our knowledge and experience and the specialist advice received
from the appointed professional advisors (eg investment consultants, legaladvisors), we believe that we are well placed to exercise our functions as Trustee
Directors of the Scheme properly and effectively.
David McCall
12 October 2023_____________________________________ Date: ___________________
Chair of Trustees of the UBM Pension Scheme

v6.77