Now Pensions has unveiled details of its new auto-enrolment offering in preparation for the 2012 pension reforms.
Backed by Danish pension scheme ATP, the multi-employer trust has revealed that its scheme will have a £1.50 per month administration charge, and a 0.3% annual product investment charge.
The scheme has one investment strategy, which is based on three funds: a managed diversified growth fund, a retirement protection fund, and a cash protection fund.
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The managed diversified growth fund is used during the accumulation phase, and risk is diversified by spreading the risk across five risk classes: rates, credit, equity, inflation and commodity. The overall risk is controlled by a target risk level.
At the pre-retirement phase major risk drivers and management from the accumulation phase persist, and the members’ risk tolerance is affected by the approaching retirement date.
The allocation to the managed diversified growth fund is gradually reduced using a retirement protection fund, which has a return target based on annuity prices and a cash protection fund. This is optional but will be used as the default.
Members can choose not to use the retirement protection fund.
Morten Nilsson, chief executive of Now Pensions, said: “We believe auto-enrolment is a wake-up call to the UK pensions industry. ATP’s experience in servicing the Danish working population shows there is another way.
“We have been providing Denmark’s working population with stable, consistent returns over the past 45 years, no matter how volatile the economic climate, and we are confident we can do it here.”
Read also the Employee Benefits pension reforms supplement 2011
Read more articles on the 2012 pension reforms