AllianceBernstein is launching a lifetime pension investment strategy that integrates the accumulation and decumulation phases into a single DC default journey.
The strategy, which has been adopted by the BlueSky Pensions master trust, combines AllianceBernstein’s range of target date funds with its new Retirement Bridge income drawdown solution.
The provider says Retirement Bridge is the UK’s first low-cost drawdown offering, aimed at paying a sustainable income in retirement. It has an age-appropriate diversified investment approach that targets risk-managed investment growth, while offering members full flexibility and accessibility of funds.
The Retirement Bridge fund range will be available from members’ 55th birthday and uses AllianceBernstein’s Dynamic Asset Allocation (DAA) process to smooth the ride for investors by making short-term adjustments to the asset allocation in order to de-risk the portfolio during times of adverse market conditions.
The BlueSky Pensions master trust, which has 23,000 members and £270m of assets, will be the first scheme provider to offer the Retirement Bridge as part of an integrated default strategy, enabling members to transition from paying into their pension pot to taking a sustainable income in retirement.
AllianceBernstein managing director, pensions strategy group Tim Banks says, “Retirement Bridge’s age-appropriate investment approach and lower-cost than conventional drawdown makes it ideally suited for the vast majority of the over 400,000 DC members retiring every year. Over 80 per cent of DC members currently save into a default pension strategy, meaning it is vital to also provide a robust retirement default solution when it comes to taking a retirement income.
“Our extensive market research shows that 74 per cent of 55 to 64 year olds have not decided what to do with their pension pot. We believe that providing a default solution that keeps them invested during this important time in their life, while also offering full flexibility to change their mind, best meets the modern working environment.”
AllianceBernstein head of pensions strategy group David Hutchins says: “Our fundamental belief behind Retirement Bridge is that individuals should not be rushed into making binding retirement decisions that they are insufficiently prepared for. In order to cater for the real uncertainty in the early years of retirement, our diversified investment strategy embeds age-appropriate advice to deliver a sustainable monthly income that is expected to grow over time.
“This portfolio-managed approach is backed by our global multi-asset capabilities to actively manage asset allocation and market volatility, while providing value for money to members.”
BlueSky chief executive Paul Bannister says: “We are pleased our 23,000 members will be the first to benefit from the range of ‘Crystal’ benefit choices using Retirement Bridge as part of a seamless lifetime default journey. We believe it is critical for trustees to look after the needs of their members by providing a robust and well-governed default strategy in the accumulation as well as decumulation phase.
“This strategy gives our members the time they need to make decisions for their retirement, while maintaining the right to change their mind at any time, and knowing that their default is pro-actively managed with independent, robust and transparent oversight.”