Retirement Countdown Fund

Our Retirement Countdown Fund (RCF) is designed to protect pension savings in the NOW: Pensions Trust (‘the Scheme’) from falling in value before they’re due to be turned into retirement benefits.

How we use the RCF

The RCF forms part of our ‘pension saving journey’ for Scheme members.

For most of our members’ working lives we invest their pension savings in the Diversified Growth Fund (DGF), to help them grow as much as possible.

Fifteen years before members’ planned retirement age, we gradually switch most of their pension savings to the RCF with the aim of protecting their value, reducing the risk of them falling in value before they’re due to be turned into retirement benefits. This is an investment approach known as lifestyling.

Unless members tell us otherwise, we assume their planned retirement date is their State Pension age.

At planned retirement age, 80% is in the RCF and 20% in the DGF. We call this the ‘Journey Path’.

Advantages
The advantage of the Journey Path is that it’s an automatic process designed to protect your pension savings from big gains  and losses as you approach your planned retirement age. We move your savings gradually to protect against them all being moved when markets are low.

Disadvantages
Switching investments may not be appropriate if you want to take your benefits before or after your planned retirement age. This is because we may move your pension savings to low-risk funds when you could continue to let them grow.

Alternatively, your savings could experience short-term losses in the run-up to taking your benefits, because they were left in our Diversified Growth Fund. So, it’s important that you keep us updated if your planned retirement date changes.

We explain this in more detail on pages 7-9 of our Member Booklet. You can download a copy here.

What the RCF invests in

To achieve its aim of protecting the value of pension savings, the RCF invests in cash and investments that behave in a similar way to cash, such as money market funds, cash deposits and short-dated bonds. These investments tend to hold their capital (face) value well in the short term.

Most of the investments are relatively ‘liquid’ – quick and easy to sell and turn into cash – so that the fund is flexible enough to meet members’ needs for taking benefits out.

The investments are aligned with our approach to responsible investing (RI).

The RCF's investment objectives

Find out more in our Statement of Investment Principles (SIP)
1

Returns

2

Risk

3

RI

What is lifestyling?

Our investment strategy for the Scheme carefully balances different types of investment risk to help your money grow and protect its value – an approach known as lifestyling.

Lifestyling is an investment approach that’s designed to:
• grow your pension savings over most of your working life, then
• protect the value of those built-up pension savings as you approach your planned retirement age.

We do this through our Journey Path to retirement.

Fund units are valued and priced on a weekly basis. A single price is used for members’ purchases and sales.

Check our latest unit prices