SCHEME SUMMARY

A good pension is an important factor if you are to enjoy your retirement. When you retire, you'll need a pension to live on. The Kingfisher Pension Scheme may help you build a pension for retirement.

This Guide provides details of the Final Salary Section of the Kingfisher Pension Scheme. You pay contributions to the Scheme, but most of the funding is financed by the Company. The Scheme provides you with a pension calculated as a proportion of your Final Pensionable Salary at retirement, based on your pensionable service. More pensionable service means a bigger proportion of salary is paid to you as a pension.

The Scheme also provides protection for your family and others who depend on you.

This is your Guide to the Kingfisher Pension Scheme - keep it safe. The information in this Guide is based on current legislation and tax practices in the UK. These could change in the future, but the Company or the Trustee will tell you if any changes affect you.

The Scheme is managed according to a complex set of Rules - this Guide is a summary of those Rules. We have taken care to ensure that the Guide is accurate, but the Rules may restrict or vary from certain features summarised in this Guide. If you find any feature important, you should check how it applies to you before you make any decisions, as the Rules override this Guide. You should refer any questions you have to the Kingfisher Pensions Department.

How much do I pay?

This depends on the choice you made in April 2004.

If you chose to be a lower level member, you pay 5% of your basic salary. You cannot change to higher level membership at any time.

If you chose to be a higher level member, you pay 7% of your basic salary. Remember that you have an opportunity each year to change to lower level membership.

Your contribution is taken from your gross salary each month. You get tax relief on your contributions through Pay As You Earn (PAYE) at your highest rate. See Contributions for further details.

How much does the Company pay?

The Company pays the balance of the cost of the Scheme, which will vary depending on increases in earnings, investment performance and other factors.

Further information on Employer contributions are in Contributions.

What are my main benefits?

• When you retire we will pay you a pension until you die. You may choose to take some of the pension as a cash sum up to a maximum of one quarter of the total capital value of your pension. Details about your retirement benefits and how they are calculated are in Retirement Benefits.

• If you die before you take your benefits from the Scheme and are still actively contributing we will pay a lump sum and/or pension to your spouse / civil partner and dependent children or other beneficiaries. For more information see Death Benefits.

Maximum Tax-Free Allowances

HM Revenue & Customs (HMRC) sets the allowances on pensions, tax-free cash sums and death benefits, which may be taken from pension schemes by a member before a tax charge is made. You may now be a member of more than one registered pension scheme at any given time, this includes personal pension schemes. HMRC has set an overall lifetime allowance for the size of all your pension funds that may be built up with the benefit of tax relief. The lifetime allowance is set at £1.5 million in 2006/2007, rising to £1.8 million in 2010/2011.

In practice very few people will reach this level. For an example of how to measure pensions against the Lifetime Allowance see Retirement Benefits. If you think you may be affected by it now or in the future, please contact us.

What about tax?

This section summarises the tax advantages of pension schemes. Tax law may change, so the information below may also change.

Contributions
You receive tax relief on your contributions up to certain allowances. There is a limit on the size of fund you can build up with the benefit of tax relief, but generally it only affects very high earners. For further information, please refer to Retirement Benefits.

So, currently (tax year 2006/2007) every £100 you contribute will only cost you £78. If you are a higher rate taxpayer, each £100 will only cost you £60.

Please refer to Contributions for full details on how much you can contribute.

Fund
You also benefit because pension funds pay less tax than many other types of investment. Returns from investments in bonds (loans from governments and companies), property and deposits are tax-free. Returns from shares are not tax-free, as the pension fund cannot reclaim tax that has already been paid on the profits or income from the shares.

Pension and lump sums
Normally income tax is deducted from all pensions before they are paid. The amount of tax deducted will depend on your personal circumstances. If you are not a taxpayer you may be able to have your pension paid free of income tax.

If you take part of your pension benefits as a lump sum, it is currently tax-free.

Any lump sum payments the Trustee makes on your death will normally be free of all tax, including inheritance tax.

How do I follow the value of my pension?

Each year we will send you a statement showing:

• the date on which your Pensionable Service started

• the Scheme accrual rate (either 1/80ths or 1/60ths depending on what section you are in) used to calculate your pension benefits

• your current Pensionable Salary

• the amount of your benefits and dependants' benefits payable from age 65 if pensionable service ended now

• the amount of your benefits and dependants' benefits payable from the Scheme if pensionable service continued to age 65

• the death benefits if you died now

At what age do I retire?

From 1 December 2006 there is no default age in the Scheme at which you automatically retire. We will write to you before you reach the age of 65 to inform you of the benefits payable. The Scheme Pension Age is 65 and we will normally start to pay your pension benefits from the last day of the month in which you attain age 65. However, with the Employers and Trustee consent, any employee can continue in employment and remain in the pension Scheme past the age of 65. You can retire earlier with the consent of the Company and the Trustee but your pension will be lower - please see "What are my benefits if I retire early?" in Retirement Benefits.

Please see "What happens if I must retire early due to illness?" in Changing Circumstances for information about the benefits available, if you have to retire early because you are no longer able to work.

How is the Scheme managed?

The Kingfisher Pension Scheme Trustee is responsible for looking after the Scheme and making sure it is run according to its Rules. You can find further information here.

The administration team works for the Trustee and is responsible for the day to day running of the Scheme.