How the Aegon Workplace Default fund works
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.
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.
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.