Auto Enrolment Default Plan

Default Plan summary

The “Penfold Plan” is the default investment plan offered by Penfold to its customers. This plan automatically invests customer pension savings in a portfolio with a particular risk level depending on the number of years until their retirement. As the customer approaches retirement, the customer pension savings are automatically switched to a lower risk level.

This type of plan is known as a lifestyle strategy and is very common in the investment industry. It’s suitable for those who would prefer not to make their own decisions as to which level of risk is appropriate for them throughout their lifetime. The Default Plan is offered as the default investment option for all auto enrolment members of the Penfold Pension. It is also available as an investment option for individual customers.

How does the plan work?

• Strategic asset allocation and investment strategy

The Default Plan uses three custom portfolios designed in collaboration with BlackRock for Penfold’s members.

Customers are allocated to one of these portfolios depending on the number of years to their retirement. They’re called Protect, Balance and Growth.

As customers grow older they are automatically moved to lower risk levels in order to better protect their savings, as shown in the chart and information below:

Growth: Over 8 years until planned retirement

• Risk Level: Level 4
• Risk Level Overview: Highest growth potential and highest risk, may see significant short-term value drops

Balance: Between 8 and 3 years until planned retirement

• Risk Level: Level 3
• Risk Level Overview: Medium to high growth potential, may see larger dips to get larger gains

The Balance portfolio is made up of 50% funds from Growth and 50% funds from Protect. Every quarter, we'll rebalance the portfolio to realign the 50/50 split.

Protect: Less than 3 years until planned retirement

• Risk Level: Level 2
• Risk Level Overview: Low to medium growth potential, may see smaller dips in value

When the customer reaches each designated number of years to retirement, their savings are reinvested in the corresponding risk level. No further input is required from the customer.

Penfold has assumed a consistent retirement age of 68 unless otherwise advised. If a customer does not retire at age 68 they will remain invested in the Protect portfolio.

What specific funds are used?

• Underlying funds

The underlying investment funds are mostly made up of the BlackRock MyMap ESG range, with added funds designed to grow and protect investments at different stages:

Are the funds good for the environment?

• Environmental, social and governance (ESG) integration

The BlackRock’s MyMap Select ESG funds within the portfolio are at least 80% invested to meet BlackRock’s ESG criteria. This aims to reduce your investment's exposure to the risks of ESG issues, as well as seek to benefit from the opportunities they present.

Will the funds change?

• Dynamic allocation

The underlying funds are built to react dynamically to the market, providing investors with an extra layer of protection in times of market volatility. The investment manager may change the exact allocations of the funds over time and introduce or remove individual funds to respond to market conditions and opportunities – while maintaining the overall strategy and risk level of the portfolio.

Are the funds safe?

• Strategic diversification

The Penfold Plan enhances the existing MyMap funds by combining them with other funds which use additional asset classes. This increases the diversification of the Plan – which reduces the overall risk of your investments.

The Penfold Plan  is broadly diversified across asset classes, including stocks and shares from across the globe, as well as government and corporate bonds and new alternative assets such as listed real assets and liquid alternatives.

How much does Penfold cost?

• Our charges

Penfold’s Default Plan has an all-in fee of 0.75% of the total value of your pension savings up to £100,000 and 0.4% on amounts over £100,000. You can read more in our Charges Guide.

At any point customers can still select from Penfold’s full range of investment options including our Sustainable Plan, Sharia Plan and our Standard Plan. More details can be found here: http://getpenfold.com/pension-fund.

What is BlackRock?

• About BlackRock

BlackRock is the world’s largest money manager. We’ve designed these funds with BlackRock specifically for long-term retirement savings.

You can read more about Penfold’s partnership with BlackRock here: https://getpenfold.com/news/how-your-savings-are-invested.

More information from BlackRock on the MyMap range can be found here: https://www.blackrock.com/uk/solutions/mymap

Disclaimer

Penfold has taken independent investment advice to ensure the Default Plan is suitable for the majority of customers and ensures good value. However, it may not be the most appropriate option for everyone. If a customer believes that the Default Plan is not suitable for them, they are still able to self-select an alternative option from the Penfold range.

In particular, the self-select range includes Standard Level 1, which aims to reduce the risk and volatility further for customers who wish to increase protection for their savings further than the Default Plan. Changing investments may incur a small transaction charge as part of the trading process.

As with all investments, value can go down as well as up and your capital is at risk. However, the Default Plan has diversified sources of risk and return, and we would therefore expect to see a positive return over the long term.