Changes to Investment Options
Our previous article summarised the new flexibilities for retiring members of defined contribution (DC) Plans from April 2015. The ERSP Trustees have undertaken a detailed review of the Plan’s Investment Options in view of these flexibilities and agreed a number of changes to the Lifestyle Options and Own-Choice range of funds from July 2015. We’ll be writing to you shortly to explain what the changes are and how they might affect you.
In the meantime…
If you’re invested in one of the Lifestyle Options you should think about whether your planned retirement age for pension purposes remains appropriate (your Target Retirement Age or TRA). If you’re within 10 years of TRA you should start to think about how you might like to take your savings when you retire (up to 100% cash, an annuity or drawdown, or a combination of all 3), as this may affect how and where your account is invested. We’ll contact you if you’re approaching or are within 5 years before your TRA for confirmation of how you’d like to take your savings.
If you don’t tell us your intentions then your savings will be automatically invested in line with a default investment strategy based on your projected retirement savings at TRA. If you need to change your TRA you can do this online at www.experian.co.uk/retirementplan or by contacting the Experian Pensions Team at Capita on 0114 229 8273 or at experianpensions@capita.co.uk.
We’re also making changes to the “growth” phase of both Lifestyle options, which the Trustees hope will optimise investment returns for ERSP members and reduce volatility. From July 2015, as you approach your TRA, both funds will gradually switch your Equity investments (i.e. investments in company shares) to an actively managed Diversified Asset Fund. This switching process will begin when you’re 20 years (10 years for the Specialist Lifestyle fund) from your TRA, and will end when you’re 10 years (5 years for the Specialist Lifestyle fund) from TRA, at which time you’ll be 100% invested in the Diversified Asset Fund. As previously mentioned, when you’re 5 years from TRA you’ll be asked how you expect to take your savings at retirement, and your decision will determine where your funds are invested in the run up to retirement.
For more details about these changes as well as further information about the performance of the M&G UK Recovery Fund (currently used in the growth stage of the Specialist Lifestyle Option) and the Diversified Assets Fund (managed by BlackRock and Schroders), click here to read our Investment Spotlight article. This includes some Q&A’s to help you distinguish between the different Funds and how the Trustees keep Funds under review.
If you’re invested in the Own-Choice range of funds we’re extending the range to include a Corporate Bond Fund and a Pre-retirement Fund for members who may wish to move their savings into less volatile investments as they approach retirement.
Wherever your savings are invested, you should note that from 17 to 31 July 2015, you’ll be unable to access your details online, or complete any transactions such as withdrawals, transfers or investment switches while the above changes are being implemented and checked by the Experian Pensions Team.
Further information
We’re in the process of updating the Plan website and literature at www.experian.co.uk/retirementplan in respect of the above changes, but further information about the new flexibilities for retiring members can be found at www.moneyadviceservice.org.uk or by contacting the Experian Pensions Team at Capita on 0114 229 8273 or at experianpensions@capita.co.uk