We’ve designed our default investment based on the Department for Work and Pensions (DWP) guidelines*, so your clients can feel confident they’re offering members an investment solution that’s in line with the regulator’s recommendations
The Royal London default investment is the Balanced Lifestyle Strategy (Drawdown) and this strategy is reviewed on a regular basis to ensure it remains a suitable default for members invested in it.
This is the default investment that will apply for new schemes with Royal London from February 2018. If there are new members joining existing schemes then the Royal London Balanced Lifestyle Strategy (Annuity) will continue to apply until November 2018.
*Guidance for offering a default option for defined contribution automatic enrolment pension schemes, DWP, May 2011.
The Royal London Balanced Lifestyle Strategy (Drawdown) invests in three of our risk-targeted Governed Portfolios that are built for saving for retirement.
On retirement, members will move into a Governed Retirement Income Portfolio that is designed for taking a regular income in retirement.
The Royal London Balanced Lifestyle Strategy (Drawdown) automatically reduces the investment risk as members move closer to retirement. It gradually switches from higher to lower risk Governed Portfolios, ending in our Governed Retirement Income Portfolio 3 from which members can take a regular income.
|The lifestyle journey
|Risk category||At 15 yrs +||At 10 yrs||At 5 yrs||Retirement|
|Balanced||Governed Portfolio 4||Governed Portfolio 5||Governed Portfolio 6||GRIP 3|
The diagram below shows the asset allocations in the 15 years before retirement.
If your client wants to keep responsibility for the suitability of the default or the design of the default, then we can help them meet many of the government guidelines and deliver a good outcome for members.
Our range of default options are shown below and have been categorised depending on who is taking responsibility for suitability and design.
|Range||Responsibility for default suitability||Responsibility for default design||Default options|
|Royal London||Royal London||Balanced Lifestyle Strategy (Drawdown)|
|Royal London||Royal London||Balanced Tracker Lifestyle Strategy (Drawdown)|
|Employer/Adviser||Royal London||All of our Lifestyle options which can include bespoke branding, bespoke lifestyle route and choice of at retirement targets1|
|Employer/Adviser||Employer/Adviser||All of the options available under Royal London Designed, plus build your own custom lifestyle including your asset allocation, fund selection and lifestyle switch points1|
1 Default investment strategies may only use our internal funds and BlackRock passive funds to ensure that fund charges will not cause the scheme to breach the 0.75% pa charge cap.