A single, simple solution for DC savers
What are target date funds?
Target date funds are funds that enable groups of pension savers that are all targeting a similar retirement date, to save together in a single investment fund. An individual chooses a fund based on their estimated retirement date and will stay in that one fund to and through retirement.
The mix of assets within the fund changes over time to reflect the needs of scheme members as they approach – and surpass – their target retirement date.
*Source: LGIM internal data as at 31 Dec 2023. The AUM disclosed is shown on the basis of client direct investments and excludes any double count from fund of fund holdings. The AUM includes the value of securities and derivatives positions.
What's under the bonnet
While members are invested in a single fund throughout their journey, an important feature of the funds is that the asset allocation evolves over time, with four key investment stages:
In 2022, we evolved the strategy to:
*Applies to L&G DC Workplace scheme members currently invested in the growth phase and/or steady growth phase of all L&G Target Date Fund strategies. Subject to change. ESG integration and consideration through a variety of factors.
**Applies to L&G DC Workplace scheme member cohorts 2015 – 2020, 2020 – 2025, 2025 – 2030, 2030 – 2035, 2035 – 2040 currently invested in the de-risking phase of L&G Target Date Fund strategy 2. Subject to change.
Vaccine bonds
The vaccine bonds created by the International Finance Facility for Immunisation (IFFIM) raise additional funds for Gavi, the Vaccine Alliance. As of December 2019, the money raised by these bonds had helped to save an estimated 2.9 million children, with 14 million saved overall.
Gavi is an international organisation dedicated to saving children’s lives and protecting people’s health by increasing equitable use of vaccines in lower-income countries.
Gender and refugee bonds:
We have invested in gender bonds, issued by the Asian Development Bank (ADB). These finance projects that promote gender equality and the empowerment of women, including vocational education and training, or loans to small and medium-sized enterprises owned or led by women.
Since it began, 96% of ADB’s operations have promoted gender equality.(1)
We’ve also invested in refugee bonds issued by the Council of European Development Bank (CEB). These bonds raise funds primarily to support countries receiving Ukrainian refugees. CEB financing is expected to aid two million refugees.(2)
(1) Source: Asian Development Bank, as at June 2022.
(2) Source: Council of European Development Bank, as at June 2022.
Growth
Preparing for retirement
Retirement
Assumptions, opinions and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Meet the team
Drawing from expertise across fund management, research and distribution
The TDFs are managed by the Solutions and Investment Strategy Management teams. The Solutions team has a wealth of experience drawn from financial, actuarial and consultancy backgrounds. The team are involved in asset allocation work for a wide range of LGIM's clients, typically large pension and insurance funds, as well as managing LGIM’s objective-driven pooled funds. The Investment Strategy Management (ISM) team is responsible for the day-to-day management of the Funds and deal with pre-funding, re-registration, portfolio construction and efficient allocation of assets against new or existing strategies.
Find out more
If you have any questions or would like to find out more about the L&G Target Date Funds, please contact the DC team.
Email: DCNewBusiness@lgim.com