Your investment choices
DC Start
In DC Start, your account is automatically invested in the Lifetime Pathway fund. Your target retirement age is your state pension age. You don't have to make any investment decisions.
If you're in DC Start and you'd like to choose your own investments or change your target retirement age, you'll need to switch to DC Core. You can do this by completing the DC Core Option Form and returning it to Nestlé Pensions.
DC Core
In DC Core you can choose how your contributions are invested. You can put all your contributions into either:
- the Lifetime Pathway fund; or
- any combination of our selection of individual self-select funds.
If you don't choose how to invest your contributions, they will be invested in the Lifetime Pathway fund. While we think this fund will meet the investment needs for most of our members, it might not be right for everyone. You'll need to think about whether it's right for you and what age you'd like to retire at - this is known as your target retirement age.
The Lifetime Pathway fund
In the Lifetime Pathway fund, your contributions are automatically divided between investment funds and switched to more stable investments as you approach your selected retirement date.
This switching takes place in three phases:
1. Growth
Over 15 years from retirement
Aim:
To grow the value of your investment.
Made up of:
Higher-risk investment funds with the potential for higher returns.
Funds used:
Equities and Blended Assets
2. Consolidation
From 15 to 5 years from retirement
Aim:
To keep a level of growth and begin to protect the value of the Funds you have already built up.
Made up of:
Medium-risk investment funds with the potential for higher returns while aiming to protect the value of your account.
Funds used:
Blended Assets
3. Pre-retirement
Less than 5 years from retirement
Aim:
To protect a level of growth and begin to protect the value of the Funds you have already built up.
Made up of:
Lower-risk investment funds to further protect the value of your account.
Funds used:
Blended Assets and Pre-retirement cash
To find out more about the individual funds, see self-select funds.
This graph shows how the automatic switching starts to move your investments once you are 15 years away from your target retirement age:
Automatic switching and your TRA
Changing your target retirement age
If you're invested in the Lifetime Pathway, your target retirement age is the age you've told us you'd like to retire at and we use it to work out when we need to start switching you out of higher-risk investments.
You can see how your investments gradually start to switch into more stable funds as you approach your target retirement age in the 'Automatic switching and your TRA' graph.
Your target retirement age doesn't have to be the same as your normal pension age in the Fund.
If you change your target retirement age while you're in the consolidation or pre-retirement phases shown above, we'll need to adjust the ratio of your higher-risk to stable investments to reflect how close you are to your new target retirement age. We do this by buying and selling investments until you have the right mix of higher-risk and stable investments again.
You can change your target retirement age by completing a Target Retirement Age Change Form and returning it to Nestlé Pensions. You can make this change whenever you like, but we process these forms every February, May, August and November.
You can also complete this form online by logging into your Online Account.
What does it cost?
To cover the cost of managing your investments, a percentage of the total value, known as the annual management charge, is automatically taken out of your DC account via an adjustment to the unit prices. Other charges may also apply to certain funds. The annual management charge plus any other charges give the total fund charge, which is known as the total expense ratio.
This can vary slightly each quarter depending on how the underlying funds perform and the level of expenses involved in managing them. Please refer to the fund factsheets for the current total expense ratio.
During the three phases of the Lifetime Pathway (shown in the graph above), the charges are currently:
Growth phase
Total expense ratio: 0.33%
Consolidation phase
The total expense ratio increases from 0.33% to 0.65% between 15 and 10 years before retirement as your DC account gradually moves into the Blended Assets fund. The total expense ratio stays at 0.65% from 10 to 5 years before retirement.
Pre-retirement phase
The total expense ratio decreases from 0.65% to 0.34% from five years before retirement as your DC account gradually moves into the Pre-retirement to Cash fund.
Self-select funds
If you'd prefer to select your own investment strategy, you can choose from our self-select options below. These funds don't automatically move your investments into lower-risk investments as you approach retirement, but you can move your investments yourself. For more information, see Changing your funds.