The Aegon Workplace Default fund is our default fund for Workplace Aegon Retirement Choices (ARC) schemes. It's designed for a membership that will largely prefer to remain invested at retirement and take advantage of Pensions Freedoms flexibility, such as flexi-access drawdown.

This simple video explains how the default fund works.

Our chosen default is designed for employers who believe that most of their employees will stay invested at retirement, but may follow differing retirement patterns.

Benefits of Aegon Workplace Default:

  • Single solution to suit a broad range of pension scheme members.
  • Governed by Aegon. 
  • Over 70%* invested in funds taking environmental, social and governance (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, using underlying passive components to keep costs low.
  • Automatically moves into investments generally considered to be lower risk as employees approach their selected retirement age.
  • Aims for growth above inflation at retirement, to give 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. 

How the Aegon Workplace Default fund works

Growth stage

In early years, the fund invests in a well-diversified mix of equities and bonds, 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, 70%** 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 that are generally considered to be lower risk. This process of switching into what are generally considered to be lower-risk investments, known as the glidepath, happens automatically and gradually over the six-year period until they reach their retirement date.

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, so members don't have to decide how to take their benefits immediately.

At this stage, at least 50% is invested in strategies which incorporate exclusions and, or carbon emission reduction targets.**

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

Show employees how the funds work

Aegon Workplace Default responsible investment credentials

Climate change, along with other environmental, social and governance (ESG) factors, is widely considered a material financial risk to our customer’s retirement savings. 

As a long-term savings provider, Aegon UK has a duty to ensure that investment decisions are being taken to mitigate the impact of these emerging risks on customer savings. 

As we move towards our net zero commitment, we’ve been increasing the percentage of assets in the Aegon Workplace Default that include funds incorporating ESG screens and that target reduced carbon intensity emissions. As at December 2022, over 70% of assets for members in the growth stage and over 50% in the retirement stage has been moved into funds incorporating ESG screens1.  Our primary focus has been 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, companies with lower carbon emissions (positive screening). 

The BlackRock and HSBC components target reductions in carbon emissions intensity of 30% and 50% respectively and aim 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 weapons
  • 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 is just an example 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. 

We reserve the right to make changes to asset allocation both in the growth and retirement stages, and to the length of glidepath to ensure our default fund continues to meet the needs of pension scheme members. 

*As at December 2022.

**As at December 2022. 

1Asset mix expected to be reached in Summer 2022. Target to half emissions based on 2019 start date.

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