Your TotalEnergies pension makes up an important part of your retirement income.

When you join TotalEnergies and your employer participates in the TotalEnergies UK Pension Plan (the Plan), you will be automatically enrolled into the Plan and pay contributions via your monthly salary.

Your pension is a defined contribution (DC) arrangement. As a member, you build up a pot of money (your Pension Account), which is invested during your working life. You can then choose how to use your Pension Account to provide benefits in retirement.

A DC pension is sometimes referred to as a ‘Money Purchase’ benefit. In this type of arrangement, you pay a proportion of your salary (before tax) as contributions into your own Pension Account, and in return your employer will also contribute money into that account. These contributions are then invested – in funds which you choose, or in a default fund if you do not make a choice.

Unlike a defined benefit (DB) or final salary pension, which promises a specific income at retirement, in the DC Sections of the Plan the income you’ll receive depends on several factors. These include the amount you pay in, the investment performance of the funds in which you invest, and the choices you make at retirement.

In order to make the most of your Pension Account, you should consider how much you’ll need at retirement, review how much you’ve built up, think about your attitude to investment risk, and also consider paying in more if you can afford it.

There are various DC Sections in the TotalEnergies UK Plan. The Section you’re in will depend on the area of the business in which you work. If you’re unsure of which Section you’re in, log in to the Member Portal or contact Gallagher, the Plan Administrators.

How much you pay in

As a Plan member, you pay a percentage of your salary into your Pension Account. In return, your employer will also contribute. The money you pay in is calculated before tax – so paying into the Plan is a tax-efficient way of saving for the future.

How much you and your employer pay into your Pension Account will depend on which Section you’re in. You can log in to the Member Portal to see how much you and your employer currently contribute.

How you make contributions

Depending on which DC Section of the Plan you’re in, how you pay your contributions may differ.

In some Sections you don’t pay your contributions directly to the Plan, but instead agree to exchange part of your Basic Salary in return for a contribution that your employer agrees to pay into the Plan on your behalf. As a result of this, your Basic Salary goes down by a corresponding amount. This is known as ‘Salary Sacrifice’.

Taking part in Salary Sacrifice means that you pay less National Insurance (NI) contributions because you only pay NI on your earnings after you have exchanged salary for a pension contribution.

How you choose to invest your pension contributions can make a big difference to the amount of money you have when you retire.

It’s important to ensure your Pension Account is invested in the best option for you. You can view how your pension contributions are invested by logging in to the Member Portal.

A little about risk

All investments involve some risk. Different types of investment have different levels of risk. When you choose an investment fund or a mix of investment funds, you will need to make sure that it has the right level of risk for you.

Your attitude to risk is likely to change during your working life. When you’re a long way from retiring, you may be prepared to accept a higher level of risk in order to achieve a higher level of performance on your investments over the long term. As you get closer to retirement, making sure your investment fund will not fall in value may be more important to you then getting a higher level of performance.

For more information on the different types of investment risk, please read the ‘Planning for the Future: Understanding Your Investment Choices’ guide available in the Library section of this website.

There is a range of investment options available within the Plan. These currently include three ‘Lifestyle’ strategies and ten ‘Freestyle’ fund options.

Lifestyle Strategies

Adopting a Lifestyle Strategy means that your investments will automatically change as you approach your Target Retirement Age. This approach takes away the need for you to make day-to-day investment decisions, but you should still be satisfied that the strategy is right for you.

The Lifestyle Strategy you choose will depend on how you’d like to take your benefits when you come to retirement. If you choose one of the Lifestyle Strategies, you should keep the decision and your Target Retirement Age under regular review.

The Lifestyle Strategies available to you are as follows:

• The Drawdown Lifestyle Strategy: This will be appropriate if you want to vary the amount you take from your retirement savings each year when you retire. It may also be appropriate if you’re not yet sure how you might want to use your retirement savings.
• The Lump Sum Lifestyle Strategy: This will be appropriate if you’re interested in taking the full amount of your retirement savings as cash.
• The Annuity Lifestyle Strategy: This will be appropriate if you like the idea of using your retirement savings to provide a guaranteed regular income.

All Lifestyle Strategies also target taking 25% of your Pension Account as tax-free cash at your Target Retirement Age and adjust investment allocations accordingly.

Freestyle options – pick your own funds

Freestyle options are ideal for you if you want to remain responsible for managing your investment allocation directly. If you choose the Freestyle option, you’ll need to continually monitor your investments and be comfortable making changes as a result of fluctuating markets or your changing needs.

The Freestyle fund options available are:

• Global Equity Fund
• UK Equity Fund
• Overseas Equity Fund
• Ethical Equity Fund
• Climate Aware Passive Equity Fund
• Diversified Multi-Asset Fund
• Index-linked Gilt Fund
• Fixed-Interest Gilt Fund
• Corporate Bond Fund
• Cash Fund

For more information on these funds, please read the ‘Planning for the Future: Understanding Your Investment Choices’ guide available in the Library section of this website.

What if I do not make an investment decision?

DC Section members will be automatically enrolled in the Drawdown Lifestyle Strategy with a Target Retirement Age of 65. Please take time to think if this is right for you and use the Member Portal to change out of this if it is not.

Paying into the Plan means that you will get tax relief on your contributions, as these come out of your pay before tax is deducted.

The situation may be different if you pay your contributions using salary sacrifice.

Whilst most of us enjoy tax relief on contributions, there are limits in place on how much tax we can save when contributing towards a pension.

Annual Allowance

Your Annual Allowance (AA) is the maximum you can save in your pension schemes in a tax year (6 April to 5 April) before you have to pay tax.

As of 6 April 2024, the standard AA is £60,000 per year (but see below for exceptions). For the DB Sections of the Plan, it's based on the capital value of the increase in your pension benefits over the tax year.

It’s possible to save more than the standard £60,000 by carrying forward unused AA from three previous tax years.

There are also currently two situations where your AA may be lower than £60,000:

• If you have an income totalling over £260,000 per year (from 2020/21). This threshold income is different for earlier tax years.
• If you have already accessed some of your pension savings from a DC arrangement. In this case, the AA is reduced to £10,000 in a given tax year (known as the Money Purchase Annual Allowance).

You can find out more about the AA and what it potentially means for you on the government website.

Lump Sum Allowance

Prior to 6 April 2024, there was a Lifetime Allowance (LTA) that applied to the total value of pension savings you could build up during your lifetime. This has now been abolished.

In its place there are two new allowances:

• The Lump Sum Allowance (LSA) limits the value of tax-free cash lump sums you can take across all your registered pension schemes. It is currently £268,275.
• The Lump Sum and Death Benefit Allowance (LSDBA) limits the tax-free sums that can be paid from all your registered pension schemes in circumstances of a member’s ill health or death. It is currently £1,073,100.

You can find out more about the LSA and LSDBA on the government website.