Your investment choices
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.
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 nine other individual 'self-select' funds.
If you don't choose how to invest your contributions, they will be invested in the Lifetime Pathway fund. We think this is appropriate for most members. However, it may not suit everyone and you should consider if it is right for you and at what age you think you’ll retire (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.
Your target retirement age is the age you told us you would like to stop working by, if you have chosen to invest in the Lifetime Pathway. This is to help us work out when we need to start switching you out of higher-risk investments into more stable investments. Your target retirement age doesn’t have to be the same as your normal pension age in the Fund.
You can change your target retirement age once a quarter by completing an Target Retirement Age Change Form and returning it to Nestlé pensions.
In the Lifetime Pathway fund, the switching takes place in three phases:
Over 15 years from retirement
To grow the value of your investment.
Made up of:
Higher-risk investment funds with the potential for higher returns.
Equities and Blended Assets
5-15 years from retirement
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 whilst aiming to protect the value of your account.
Less than 5 years from retirement
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 valude of your account.
Blended Assets and Pre-retirement cash
For information about the individual funds, see self-select funds.
The graph below shows how the automatic switching starts to move your investments once you are fifteen years away from your target retirement age:
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:
Total expense ratio: 0.33%
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.
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.
If you prefer to select your own investment funds, you can choose from nine self-select funds. 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.