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Your choices

Introduction

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 invested and switched to more stable investments over time as you approach your selected retirement date.

This switching takes place in three phases:

1. Growth

Over 15 years from target retirement age.

Aim:

In this phase the aim is to provide long term returns to grow the value of your investments.

Made up of:

The underlying funds invest in a broad range of assets including shares, bonds, asset-backed securities and cash.

Funds used:

Growth fund.

2. Consolidation

From 15 years to 5 years from target retirement age.

Aim:

In this phase the aim is to keep a level of growth with your investments and to start to protect the value of the funds you have already built up. Your DC account will automatically progressively switch from the Growth fund into the Blended Assets fund between 15 years and 10 years from retirement and will stay fully invested in the Blended Assets fund until you reach five years from retirement.

Made up of:

The underlying funds invest in a broad range of assets including shares, bonds, property, asset-backed securities and cash.

Funds used:

Equities and Blended Assets funds.

3. Pre-retirement

Less than 5 years from target retirement age.

Aim:

In this phase the aim is to protect the value of the funds you have already built up, while continuing to provide some growth. Your DC account will automatically progressively switch into cash as you approach retirement.

Made up of:

The underlying funds of the Pre-Retirement to Cash fund invest in cash and other money market instruments that are similar to cash with low risk of loss.

Funds used:

Blended Assets and Pre-retirement to Cash funds.

Automatic switching and your TRA

This graph shows how the automatic switching starts to move your investments once you are 15 years away from your target retirement age:

 

Graph showing automatic switching of investments

Changing your target retirement age

If you're invested in the Lifetime Pathway Fund, your target retirement age is the age you've told us you'd like to retire at. 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.

Lifetime Pathway fund charges

During the three phases of the Lifetime Pathway fund (shown in the graph above), the charges (or “Total Expense Ratio”) are currently:

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Growth phase

Total expense ratio: 0.20%

Consolidation phase

The total expense ratio increases from 0.20% to 0.32% between 15 and 10 years before target retirement age as your DC account gradually moves into the Blended Assets fund. The total expense ratio stays at 0.32% from 10 to 5 years before target retirement age.

Pre-retirement phase

The total expense ratio decreases from 0.32% to 0.15% from five years before target retirement age 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 fund options below. These funds don't automatically move your investments into lower-risk investments as you approach retirement, but you can decide to change your investments yourself. For more information, see Changing your funds.

Equities

Aim:
The aim of this fund is to provide a high return over the long term. The fund invests in shares of companies based across the globe and the value of these shares may experience times of heightened volatility. The fund is predominantly passively managed which means that the shares are chosen in such a way as to track a broad index of shares in a mechanistic manner rather than relying on a particular investment manager to individually choose them. Some of the underlying funds invest in entities that meet high Environmental, Social and Governance (ESG) standards and integrates this into the investment decision making process.
Risk:
Medium to higher risk/return. There is a medium to high potential for capital growth. The fund may experience large fluctuations in value, either up or down, especially in the shorter term.
Total expense ratio:
0.16%

Cash

Aim:
This fund aims to provide protection for your DC account. It invests in cash and other money market instruments that are similar to cash with very low volatility. Please note a money market fund is not the same as a deposit account, as such there is a risk that the value can fall. The underlying fund invests in entities that will pay adherence to Environmental factors.
Risk:
Lower risk/return. The fund places greater emphasis on capital preservation rather than maximising returns. The fund will generally aim to preserve the value of your investments but in return will usually offer a lower rate of growth. Please note that low risk does not mean that the fund's value will not fall.
Total expense ratio:
0.15%

Blended assets

Aim:
This fund aims to provide less volatile, but potentially lower, long-term returns than shares (equities). The fund will invest in a broad range of assets which may include, but are not limited to: shares, bonds, property, hedge funds and cash. Some of the underlying funds invest in entities that meet high Environmental, Social and Governance (ESG) standards and integrates this into the investment decision making process.
Risk:
Medium to higher risk/return. There is a medium to high potential for capital growth. The fund may experience large fluctuations in value, either up or down, especially in the shorter term.
Total expense ratio:
0.32%

Corporate bonds

Aim:
This fund aims to provide both income and growth by investing in non-government (corporate) bonds from around the world. These bonds will be selected by the underlying fund manager, taking an active approach to fund management. The underlying fund invests in entities that meet high Environmental, Social and Governance (ESG) standards and integrates this into the investment decision making process.
Risk:
Lower to medium risk/return. Compared to the lower risk/return category there is more of a risk of your fund value going down but in return for this there may be a better chance of your fund value experiencing a higher rate of growth.
Total expense ratio:
0.32%

Ethical consolidation

Aim:
This fund aims to grow the value of your investments while aiming to protect the value of your DC account. The fund invests in UK government bonds and global equities. All funds in this portfolio are ethically screened to ensure that they have a focus on integrating sustainability issues.
Risk:
Medium risk/return. There is potential for capital growth but the value of the fund may vary considerably either up or down.
Total expense ratio:
0.13%

Ethical growth

Aim:
To grow the value of your investments. The fund invests in shares of companies based across the globe and is passively managed which means that the shares are chosen in such a way as to track a broad index of shares in a mechanistic manner rather than relying on the investment manager to individually choose them. All shares held within the fund are ethically screened to ensure that they have a focus on integrating sustainability issues.
Risk:
Medium to higher risk/return. There is a medium to high potential for capital growth. The fund may experience large fluctuations in value, either up or down, especially in the shorter term.
Total expense ratio:
0.25%

Pre-retirement to annuity

Aim:
The aim of this fund is to provide exposure to a range of assets with a return that reflects the change in the price of a typical traditional annuity product. The majority of the investment will be in bonds. It’s aimed at members who are likely to buy a regular income in retirement (an annuity) instead of taking cash.
Risk:
Lower to medium risk/return. The fund places less emphasis on capital preservation and so introduces a chance of higher fluctuations in returns. However, there is a higher chance that the fund values will move broadly in line with annuity prices.
Total expense ratio:
0.14%

Pre-retirement to cash

Aim:
This fund aims to provide protection for your DC account. It invests in cash and other money market instruments that are similar to cash with very low volatility, presuming you will take your entire DC account as cash. Please note a money market fund is not the same as a deposit account, as such there is a risk that the value can fall. The underlying fund invests in entities that will pay adherence to Environmental factors.
Risk:
Lower risk/return. The fund places greater emphasis on capital preservation rather than maximising returns. The fund will generally aim to preserve the value of your investments but in return will usually offer a lower rate of growth. Please note that low risk does not mean that the fund's value will not fall.
Total expense ratio:
0.15%

Property

Aim:
This fund aims to provide a diversified exposure to the UK and global property market. 70% of the fund is invested directly in UK commercial property and 30% is invested in global real estate investment trusts (REITs).
Risk:
Medium to higher risk/return. There is a medium to high potential for capital growth. The fund may experience large fluctuations in value, either up or down, especially in the shorter term.
Total expense ratio:
0.46%

Shariah

Aim:
This fund invests in shares of companies based across the globe that are consistent with Islamic investment principles as interpreted and laid down by the Shariah Committee. The aim of the fund is to create long-term capital appreciation. However, global shares can often experience times of heightened volatility. The fund is a passive fund which means that the shares are chosen to reflect the benchmark index of shares rather than relying on the investment manager to individually choose shares.
Risk:
Medium to higher risk/return. There is a medium to high potential for capital growth. The fund may experience large fluctuations in value, either up or down, especially in the shorter term.
Total expense ratio:
0.35%

Fund reviews

From time to time, we (the Trustees) – through the Defined Contribution Committee and with the support of the investment advisers – may make changes to the underlying funds in the Lifetime Pathway fund and the self-select fund range.

This may be because a particular fund isn’t performing as well as we expected, or to reduce the costs and charges in a fund.

You can find an overview of the latest changes to the funds below.

Changes to the funds

Changes made in 2024

In early 2024, following a review in 2023, the Defined Contribution Committee made some changes to the underlying funds in the Lifetime Pathway fund and some of the self-select funds. This was because some of the funds weren’t performing as well as we expected, but also because new funds were available on the Fidelity platform.

Change to the Equities fund

The key change to the Equities fund was to replace a passive emerging markets equity fund (State Street Emerging Markets Screened Equity fund) with an actively managed emerging markets fund (Loomis Sayles Global Emerging Markets fund).

The Equities fund was previously made up of:

  • 43% Blackrock World Multifactor ESG Equity fund
  • 43% Blackrock World ESG Equity fund
  • 14% State Street Global Advisers Emerging Markets Screened Equity fund

Following the review, the Equities fund is now made up of:

  • 45% Blackrock World Multifactor ESG Equity fund
  • 45% Blackrock World ESG Equity fund
  • 10% Loomis Sayles Global Emerging Markets Equity fund.

These changes reduced the fees in the Equities fund from 0.18% a year to 0.16% a year.

Changes to the Blended Assets fund

The Blended Assets fund was also reviewed and the underlying funds restructured to the following:

  • 22.5% PIMCO GIS Income fund
  • 22.5% Robeco Global SDG Credits fund
  • 20.5% Blackrock World Multifactor ESG fund
  • 20.5% Blackrock World ESG fund
  • 10% L&G 70:30 Hybrid Property fund
  • 5% Loomis Sayles Global Emerging Markets Equity fund

These changes reduced the fees in the Blended Assets fund from 0.59% a year to 0.32% a year.

Changes to the Pre-retirement to Cash and the Cash fund

The underlying cash fund was changed from:

  • 100% L&G Cash fund

To

  • 100% Blackrock Liquid Environmentally Aware fund (LEAF)

These changes resulted in a slight reduction in the fees of the Pre-retirement to Cash and Cash funds from 0.16% a year to 0.15%.

Change to the Corporate Bonds fund

The underlying bond fund was changed from:

  • 100% Fidelity UK Corporate Bond fund

To

  • 100% Robeco Global SDG Credits fund

This change reduced the fees in the Corporate Bonds fund from 0.42% a year to 0.32% a year.

Changes to the Ethical Growth fund

The Ethical Growth fund was previously made up of:

  • 70% L&G Ethical Global Equity fund
  • 15% L&G All Stocks Gilts fund
  • 15% L&G All Stocks Index Linked Gilts fund

Following the review, the Ethical Growth fund is now made up of:

  • 100% L&G Ethical Global Equity fund

This change resulted in a small increase in the fees in the Ethical Growth fund from 0.23% a year to 0.25% a year.

Changes made in 2021

Changes to the Blended Assets fund

In September 2021 we replaced one of the underlying funds in the Blended Assets fund. This was because it wasn’t performing as well as we expected.

If you are in the Lifetime Pathway, or have invested your pension savings in the Blended Assets self-select fund, this will affect you.

The Blended Assets fund was previously made up of:

  • 50% Invesco Global Targeted Returns Fund
  • 50% Schroders Diversified Multi Asset Fund
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Following the review, the Blended Assets Fund is now made up of:

  • 37.50% Schroders Diversified Multi Asset Fund
  • 12.90% SSGA Global Multi-Factor Strategy
  • 2.10% SSGA Emerging Markets Equity Index Fund
  • 38.13% PIMCO GIS Income Fund
  • 9.37% L&G All Stocks Gilt Index Fund
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As result of this change we hope to deliver better outcomes for our members, by providing:

  • Lower investment fees – so that you pay less costs and charges during the time that your pension savings are invested in the Fund.
  • Investment returns that are the same or better but that have a lower risk profile.
In this section
The Lifetime Pathway Fund Changing your target retirement age Lifetime Pathway fund charges Self-select Funds Fund reviews Changes to the funds
Related links Forms Changing your funds Modeller