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Changes to investment options

Following recommendations from its investment advisers, Lane Clark & Peacock (LCP), the Trustee of The Pearson Pension Plan (the Plan) has decided to make some changes to the investment options available to members with effect from 20 June 2024.

  • What is changing?

    The Trustee has decided:

    • In the drawdown lifecycle option:
      • to replace the Blended index linked gilt fund with the Annuity targeting fund and,
      • to introduce a cash allocation starting three years from retirement, leading to a 10% allocation to cash at target retirement date  
    •  to add the HSBC Islamic global equity Index fund to the self-select option range.
  • Why did the Trustee make these decisions?

    Following recommendations from LCP, the Trustee agreed that:

    • as a significant number of members in the drawdown lifecycle option choose to take a Plan pension at retirement, the Annuity targeting fund was more appropriate for these members than the Blended index linked gilt fund, as it more closely targets their likely retirement outcome
    • given the current higher expected returns on cash as an asset class, introducing a cash allocation to the drawdown lifecycle option three years from retirement would lower the risk of poor investment returns and improve liquidity for members, as their contributions will not need to be disinvested at drawdown
    • it was appropriate to make available a Shariah-compliant fund (that meets all the requirements of Shariah (Islamic Law) and the principles articulated for Islamic Finance).
  • Investment choices

    How you choose to invest your pension pot in the Plan is an important decision. Your choices can make a real difference to the value of your pension pot and the level of benefits it will provide at retirement. You can choose either a lifecycle option or a combination of one or more of the self-select funds, but not a mix of both.

    The lifecycle options

    A lifecycle option is an investment selection process, under which contributions are invested in different investment funds at different proportions as you get closer to your chosen retirement age. Each of the Plan’s lifecycle options is tailored to meet different retirement needs, depending on whether you wish your pension pot to provide:

    The self-select funds

    If you prefer to make your own investment choices, you can select your own funds from the list available.

    Choosing to self-select your funds gives you full control of where your pension pot is invested. This means that, as well as deciding how to invest your retirement savings, you should check regularly how your investments are performing. You also must decide if, and when, to invest your pension pot in different funds as you approach retirement.

    • You can invest all your pension pot in one fund or spread your investment across multiple funds. It is up to you. This leaflet gives details of the funds available.

What do I need to do?

If you: (i) are invested in the drawdown lifecycle option and are happy with the changes; or (ii) are not invested in the drawdown lifecycle option, then you do not need to take any action.

The changes will happen automatically between 12 June to 27 June 2024. You will not be able to make investment changes, or access Aviva’s secure online portal, MyWorkplace, during this period. Please note this will apply to everyone, even members who are not invested in the drawdown lifecycle option.

If you wish to make any changes to your current investment choices before these changes are made, you should do this before 10 June 2024 using the Fund switch form or through MyWorkplace - This link opens in a new browser window *. Alternatively, you will be able to update your investment choices after 27 June 2024.

Getting help

We recommend that you take financial advice before making any significant changes to your investments. Neither the Trustee nor members of the pensions team can provide you with advice in relation to your investments within the Plan and they do not accept any responsibility for your investment choices. You should seek independent financial advice as part of your retirement planning. You can find an independent adviser in your area on the MoneyHelper website - This link opens in a new browser window.

You will have to pay for the advice or services that you receive from the adviser.

* After you have logged onto MyWorkplace:

  • Go to ‘How your pension is invested’
  • Then click ‘Go to membersite’
  • Go to ‘Your future contributions’ then click ‘Change’
  • You can then choose to change your investment programme, your future fund holdings or your future contributions.
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