NOW: Pensions announces changes to lifestyle investment strategy

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For immediate release: Thursday 24 July 2014

In light of the new flexibility afforded to pension savers announced in the 2014 Budget and confirmed by HM Treasury earlier this week, NOW: Pensions has announced changes to its lifestyle investment strategy.

NOW: Pensions offers a single investment fund made up of three components: a Diversified Growth Fund, a Retirement Protection Fund and a Cash Protection Fund.

Currently, the Retirement Protection Fund is targeted at annuity purchase and the fund provides an interest rate risk exposure as a hedge. The Cash Protection Fund invests in cash deposits, money market funds, short dated bonds with low credit risk, and in interest rate derivatives.

From this week, as members approach retirement, they will be moved from the Diversified Growth Fund into a Retirement Countdown Fund which will follow the same investment strategy as the existing Cash Protection Fund.

The default position to start switching a member’s investments from the Diversified Growth Fund into the Retirement Countdown Fund is ten years away from their selected retirement age. As an alternative, employers or members can opt for a five or 15 year version of the lifestyle strategy.

Members who want to remain in the Diversified Growth Fund for longer can also extend their retirement age.

Morten Nilsson, CEO of NOW: Pensions said: “The pensions landscape is fundamentally shifting and any investment strategy that targets annuity rates needs to be urgently addressed.

“Given the profile of our members and their expected fund sizes over the coming years, we expect the vast majority to take all of their pension pot as cash at retirement. The new lifestyle investment strategy therefore focuses on funding for cash but gives consideration to those that want to take an alternative route.

“As the market evolves we’ll continue to keep our investment strategy under review, adapting our approach to make sure our members are well served.”

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For further information:

Amy Mankelow
NOW: Pensions
Tel: 0203 640 9075 / 07887 604640
amy.mankelow@nowpensions.com

Shirley Collyer
Lansons Communications
Tel: 0207 294 3615
nowpensions@lansons.com

Notes for editors:

 

NOW: Pensions www.nowpensions.com @nowpensions
NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.

A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Jocelyn Blackwell, founding partner Dunnett Shaw
  • Christopher Daykin, former Government Actuary
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors
  • Nigel Waterson, former Shadow Pensions Minister

Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

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“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First
NOW: Pensions' risk management and diversified growth fund are state of the art. — Win Robbins, former Head of European Fixed Income Barclays Global Investors
I am excited to be joining such a distinguished Board of Trustees, over-seeing a modern, transparent, cost efficient and high-performing pension fund. — Win Robbins, former Head of European Fixed Income Barclays Global Investors
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary
I firmly believe in NOW: Pensions' principle that everyone deserves the right to a better retirement. I look forward to being part of the team which aims to achieve this in the UK. — Win Robbins, former Head of European Fixed Income Barclays Global Investors