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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.

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 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:

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

5-15 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 whilst 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 valude of your account.

Funds used:

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:

Graph showing automatic switching of investments Graph showing automatic switching of investments Graph showing automatic switching of investments

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.

Annual management charge
+
Other charges
=
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 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.

Equities

Aim:
To provide a high return over the long term.
Risk:
High
Total expense ratio:
0.20%

Property

Aim:
To provide a diversified exposure to the UK and global property market.
Risk:
High/Medium
Total expense ratio:
0.50%

Blended Assets

Aim:
To grow the value of your investments while aiming to protect the value of your DC account. The underlying investments will be a mix of assets, actively managed, which can include, but are not limited to equities, bonds, currency, hedge funds etc.
Risk:
Medium
Total expense ratio:
0.65%

Corporate Bonds

Aim:
To provide both income and growth based on investment in non-government bonds.
Risk:
Medium
Total expense ratio:
0.42%

Pre-retirement to annuity

Aim:
For members who are likely to buy a regular income in retirement instead of taking cash.
Risk:
Medium/Low
Total expense ratio:
0.17%

Pre-retirement to cash

Aim:
To reduce the investment risk and protect the value of your DC account, presuming that you will take your entire DC account as cash.
Risk:
Medium/Low
Total expense ratio:
0.34%

Cash

Aim:
To provide protection for your DC account.
Risk:
Low
Total expense ratio:
0.18%

Ethical Growth

Aim:
To grow the value of your investments and invest in more ethical funds. The underlying investments include passive ethical equities and passive gilts.
Risk:
High
Total expense ratio:
0.24%

Ethical consolidation

Aim:
To grow the value of your investments while aiming to protect the value of your DC account and invest in more ethical funds. The underlying investments include passive ethical equities and passive gilts.
Risk:
Medium
Total expense ratio:
0.16%