We use two investment funds to achieve our objectives.
How we've designed our strategy
Simple – and reassuring
We’ve designed our investment strategy to be simple and reassuring to explain to your employees. The main message is: ‘Your money will be looked after by professionals. You don’t need to make difficult choices’.
Choice isn't popular
Our one-solution approach is supported by evidence that shows that most people in workplace pension schemes don’t make investment choices. When we looked at other auto enrolment pension providers, we found over 99% of their pension scheme members were in the default investment option and had never made another choice.
We believe most people saving for retirement are happy to know professionals are investing their money and taking responsibility for making investment choices.
Strategy design
The investment strategy is designed to:
- grow your employees’ pension savings steadily over the long term, despite the ups and downs in investment markets, and
- protect the value of their pension savings from sudden falls in value as they approach retirement.
We use two investment funds to achieve this.
Diversified Growth Fund (DGF)
This fund is designed to provide stable growth over the long term. To achieve this it spreads money across four investment areas that tend to perform differently in different economic conditions – an approach known as diversification.
The DGF allocates the investments between the four areas, each of which has different risk and return characteristics. Our investment manager decides on the balance across the different areas and is based on its long-term risk/return assessment of different asset classes, expected levels of diversification and impact of changing economic conditions. The four areas are:
- equities (shares)
- interest rates
- inflation
- other investments.
Retirement Countdown Fund (RCF)
An employee’s pension savings start to be switched into this fund ten years before they plan to retire. It aims to protect the value of the money built up, reducing the risk of falls in value before it is used for retirement benefits. To achieve this it uses cash and investments that behave in a similar way to cash.
We call this timed switch from one fund to another the retirement glidepath.

Protection and safeguarding
We employ a custodian to protect the Scheme funds by holding them in a ring-fenced account, separate from both NOW: Pensions and the custodian’s own money.
Our custodian is BNY Mellon, one of the world’s largest custodians. It looks after over US$30 trillion on behalf of pension schemes and other investors.
It has strong credit ratings: for example, the credit rating agency Standard and Poor’s rates it AA (low) for long-term deposits.