As environmental, social and governance (ESG) risks and opportunities become better researched and understood, it’s clear these factors can have a financial impact on investment portfolios. Where we believe ESG factors pose downside risks to their investments, or offer potential upside opportunities, we will incorporate them in our decision-making.
Our principles define how we will do this to help secure members’ long-term financial futures. These are underpinned by our Stewardship Commitments to:
- be responsible stewards of the assets we oversee
- influence investee companies to engender positive change
- exercise strong governance over the fund managers we partner with.
To help you understand more about our responsible investment approach we’ve developed our Six Principles of Responsible Investment Framework Guide.
When the time comes to take retirement savings there are more options than ever. This means our investment options, including our default option, have had to evolve to ensure they continue to meet the changing needs of members.
Our investment solution has a default investment option and a range of lifestyle strategies and funds to allow members to make their own investment choice.
1. Lifestyle strategies
Our Master Trust has a choice of two lifestyle suites. These two suites offer respectively a passive and active investment strategy. The passive strategies are offered through our Pension Investment Approaches and the active strategies are provided through our Dynamic Lifestyles. Each of the two lifestyle suites has been designed to support the pension freedoms now available to employees through the provision of specially designed investment strategies that align to the options available.
The features offered by each are shown in the table below.
| Feature | Pension Investment Approaches | Dynamic Lifestyle Strategies |
|---|---|---|
| Daily independent investment oversight | Yes | Yes |
| Regular assessment of asset allocation to optimise expected risk/return | Yes | Yes |
| Best of Breed external fund management | Yes | Yes |
| Investment loss protection feature | Yes | |
| Low cost design | Yes | |
| Automatically de-risks fund holdings as employee approaches retirement | Yes | Yes |
Because each lifestyle suite has been designed with members at its heart, they:
- ensure that less sophisticated investors can access a simple solution for managing their investment risk
- allow members to change their lifestyle strategy at any time to ensure it reflects how they expect to take their retirement savings
- cater for members who know how they wish to take their retirement savings.
| Targeting Flexible Income | > | Suited to members expecting flexibility as to how they take their income in retirement (e.g. through drawdown) |
| Targeting Annuity | > | Suited to members expecting to buy an annuity |
| Targeting Encashment | > | Suited to members expecting to take their retirement benefits as cash |
2. Self-select funds
We offer a choice of core funds for those members that are confident enough to select their own funds.
The core funds provide access to all major asset classes. This range includes an ethical and Shariah fund to ensure our Master Trust can meet the needs of members looking for these specific approaches.
For members who are more confident or more experienced investors, they can choose to invest in multiple lifestyles and individual investment funds at the same time.
3. Bespoke investment solutions
For larger employers who would prefer a bespoke investment solution, we can design a bespoke default strategy subject to approval by the trustees.