Our vision for DC

The UK’s defined contribution (DC) pension market is undergoing major changes:

    • Growth: The introduction of auto-enrolment, coupled with further closures in defined benefit schemes, is driving member growth
    • Regulation: The introduction of ‘Freedom and Choice’ in 2014 Budget means that from 6 April 2015 buying an annuity is no longer the automatic default retirement option
    • Governance: The Pensions Regulator is increasingly focused on the role of DC pension scheme trustees and DC scheme governance.

LGIM's extensive experience and long-term commitment to the DC market enables us to understand the challenges that schemes are facing and work with our clients to meet them.

Pensions in a post freedom world

Since the introduction of the new pension freedoms, many of the old ways of thinking no longer hold true, so LGIM went back to school to do some myth busting in a video made in partnership with ITN Productions and PLSA.

Why talk to LGIM about DC solutions?

We believe that we are the only investment manager currently engaging with schemes and members across the entire DC journey.

  • Growth / accumulation phase: DC schemes can use our DC-specific multi-asset funds or create their own, bespoke version using our comprehensive range of index funds.
  • Factor-based tilt: The Future World Fund is designed for pension schemes looking for an alternative to a traditional index strategy, while also addressing the long-term financial risks of climate change.
  • De-risking: For members still interested in annuities, our Pre-Retirement Fund range aims to protect retirement income by broadly reflecting changing annuity rates.
  • Income drawdown: our Retirement Income Multi-Asset Fund is designed specifically for investors that are targeting using a drawdown solution in retirement. The risks and disclaimer applicable for this fund can be found below.
  • A flexible retirement income solution: our Pathway Funds are tailored ‘to and through’ investment strategies for DC investors. Designed following the ‘Freedom and choice’ pension reforms, they aim to provide a flexible path to building a retirement income that is aligned with individual goals.
  • Outcome orientated: Real Income Builder (RIB) and Real Capital Builder (RCB) are outcome oriented, actively managed strategies which aim to provide investors with an income in retirement. If that income does not grow in line with inflation, (if it’s not ‘real income’), then its spending power, risks being significantly eroded over time.

Risks

The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested.