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The Challenge

Since 6 April 2015, members of DC workplace pension schemes have been able to take benefits from their pension fund in new and flexible ways.

Following this change, and with auto-enrolment in place, Ideal Stelrad wanted to assess their pension fund to ensure it was performing optimally for good member outcomes.

 

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The Issues

Punter Southall Aspire were asked to develop a solution that offered superior risk management for members’ funds in their growth phase but with a keen eye on how members could take their benefits after April 2015.

Trying to make sure that DC members, including those recently auto-enrolled, would see their pension savings growing steadily over the long-term was considered essential to the success of the scheme.

 

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The Solution

We analysed the profile of the membership and worked with the Company and Trustees to design a holistic solution that:

  • Reduced fund ‘wobble’ in the growth phase by increasing the diversification of members’ funds, using dynamic asset allocation and other risk management solutions.

  • Invests in growth funds for longer and shortens the de-risking glide path, delivering expectations of higher pot sizes at retirement.

  • Delivered an at-retirement investment solution that caters for members who are undecided on how to draw their benefits, coupled with alternatives for members who want cash lump sums or flexible income options.  

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How We Helped

Our solution helped our client to manage their employees’ retirement expectations and generate a smoother investment journey to a potentially greater final fund value, allowing staff to retire and facilitating the business’s succession strategy.

For members, we have delivered a well designed investment strategy to create excellent benefit outcomes within a value for money charging structure that is well communicated.

 

Posted by John Buttress

Topics: Pension Investment

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