This video simply explains how the default fund works for your clients’ members:


Our chosen default is designed for schemes where it’s believed that most employees will stay invested at retirement, but may follow differing retirement patterns.

Benefits of our Workplace Default:

  • Single solution to suit a broad range of pension scheme members.
  • Governed by Aegon.
  • Around 75%1 invested in funds taking ESG factors into account for growth stage investors, as part of our ongoing commitment to reaching net zero by 2050.
  • Combination of active asset allocation strategy with passive components to keep costs low.
  • Significant allocation to funds with a responsible and sustainable investment focus at both growth and retirement stages.
  • Automatically moves into investments generally considered to be lower-risk as employees approach their selected retirement age.
  • Aims for growth above inflation at retirement, giving members time to consider their retirement options.

There’s no guarantee the fund will meet its objectives. The value of an investment, and any income taken from it, can fall as well as rise and isn’t guaranteed. The final value of a scheme member's pension pot when they come to take benefits may be less than has been paid in. Please see the fund factsheet for more information and the fund specific risks.  

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How the Aegon Workplace Default fund works 

Growth stage 

In the early years the fund invests in a well-diversified mix of equities and bonds. It’s designed to provide the average-risk investor with long-term growth potential. 

To keep costs low, the fund uses passively managed investments, which aim to produce returns broadly in line with the markets they track. Supporting our commitment in 2019 to achieving net zero carbon emissions in our default funds by 2050, and to halving emissions by 2030 – around 75%¹ of the fund is invested in strategies which incorporate exclusions and, or carbon emission reduction targets.

Pre-retirement stage

As members approach retirement age (currently six years before the start of their retirement year), we start moving them into investments generally considered to be lower risk. 

This process of switching into what are generally considered to be lower-risk investments, is known as the glidepath. It happens automatically and gradually over the six-year period until they reach their retirement date, ending in a cautious mix that’s designed to keep their options open when they retire. 

At retirement

When they reach their nominated retirement age, members will be invested in the Aegon Workplace Default Retirement fund, which they'll stay in until they decide what to do with their savings. This invests in a cautious asset mix that aims to provide continued moderate growth. It also means members don't have to decide how to take their benefits immediately.

At this stage,  around 53%¹ is invested in strategies which incorporate exclusions and, or carbon emission reduction targets1.

Asset allocation figures on pie charts are indicative only and may change.

Aegon Workplace Default responsible investment credentials

Climate change and other environmental, social and governance (ESG) factors, are widely considered a material financial risk to our customers’ retirement savings. As a long-term savings provider, we have a duty to ensure that investment decisions are being taken to mitigate the impact of these risks on customer savings. 

As we drive towards our net zero commitment, we’ve been increasing the percentage of assets in the Aegon Workplace Default that include funds incorporating ESG screen, and that target reduced carbon intensity emissions. 

As at March 2023, around 75% of assets for members in the growth stage and around 53% in the retirement stage has been moved into funds incorporating ESG screens1. Our main reason for doing this is to mitigate ESG risks without impacting the risk and return profile of the fund.

The ESG components of the Aegon Workplace Default fund, managed by BlackRock and HSBC, use a process called ‘screening’. Screening can be positive or negative. It involves the fund manager filtering out the types of company they don’t want to invest in (negative screening), or increasing the proportion invested in companies they do want to invest in. For example, they may want to invest more in companies with lower carbon emissions (positive screening).  

The BlackRock and HSBC components target reductions in carbon emissions intensity of 30% and 50% respectively, aiming to improve ESG scores overall. The HSBC component also targets a 50% reduction in fossil fuels intensity. 

In addition, they aim to exclude companies involved in:

  • Controversial weapons2
  • Tobacco products
  • Thermal coal extraction
  • Adult entertainment production
  • Companies considered to have breached one or more of the United Nations Global Compact principles 
  • Gambling operations

The above list just shows examples and isn’t exhaustive. In some cases, thresholds may apply. 

For example, they may specify that no more than 5% of the companies’ business involves participation in the excluded activities. 

1As at March 2023.

2Controversial weapons such as anti-personnel mines, biological weapons, blinding laser weapons, chemical weapons, cluster munitions and non-detectable fragment weapons. Source: HSBC Asset Management Policy on Banned Weapons 2022.


The Aegon Workplace Default fund is backed by our Funds Promise, which means our governance committee has a duty of care to ensure it continues to be fit for purpose. 

This means:

  • As the retirement market evolves and customer needs change, we change our default to meet these needs.
  • We reserve the right to make changes to asset allocation – both in the growth and retirement stages, and to the length of glidepath – to make sure our default fund continues to meet the needs of pension scheme members.