Page 20 - BoAML Plan Handbook 17 V2.0

Control
Now you understand more about risk and have considered where you are on the risk
‘spectrum’, you need to consider how actively involved you want to be in investing your
Member Account. The approach you take will depend on how much control you want,
how much time you are prepared to spend managing your investments, and how confident
you are about making investment decisions.
Lifestyle
A ‘do it for me’ approach
where the funds in
which your Member
Account is invested,
and the proportion held
in each fund, changes
automatically according to
how far you are from your
Target Retirement Date
and how you plan to use
your savings.
Freestyle
A ‘do it yourself’ approach
where you choose and
manage a combination
of the available funds.
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Lifestyle
The three Lifestyle options – Thames, Severn and Tay – are summarised over the next few pages.
Just as these rivers have different characteristics, the three Lifestyle options vary in the way they balance potential for growth
and the type and level of risk they take at different stages.
Growth phase: Lifestyle aims to grow your Member Target Retirement Date (TRD): This is the date you
Account during this phase by investing in funds that have decide you want the Lifestyle option to complete. This should
the potential for good return and aim to grow your Member be the date at which you expect to access your savings from
Account when you are far from retirement, gradually moving to your Member Account. It can be any date from the age of 55.
Why it might be good for you more diversified assets to provide some protection to the value As this date will determine when your investments begin
of your savings as you approach the second Lifestyle phase. switching between the Growth and Pre-retirement phases,
• You do not need to be as involved in the management of your Member Pre-retirement phase: During this phase, Lifestyle it is important that you review your TRD regularly to ensure it
is in keeping with your retirement plans. To change your TRD,
Account as you do with the Freestyle option. This is because the
investment switching happens automatically as you approach your aims to align your Member Account with how you plan to please email the Plan Administrators or go to the Plan
Target Retirement Date. use your savings at your Target Retirement Date. administration website.
• There are three Lifestyle strategies to choose from. Each option varies
in the way it balances potential for growth and the type and level Lifestyle funds
of risk it takes at different stages. The Lifestyle options are made up of a combination of the underlying funds below. These funds are also part of the range
• In the ‘Pre-retirement phase’ of each Lifestyle strategy, you have available through Freestyle, see page 24 for more information.
three options – depending on how you plan to access your savings. Fund It currently invests in Aims to… AMCs%* TERs%*
See page 21 for more details.
Equity Lifestyle Fund**
Why it might not be good for you • 10% Emerging Markets Equity Shares of companies Achieve long-term
– Active capital growth
• Lifestyle invests in a limited range of funds according to the Lifestyle
option you choose. If you prefer to take more control over how your • 45% Global Equity – Active 0.578 0.683
Member Account is invested and the types of funds that you invest in, • 45% UK Equity – Active
the Freestyle approach may be more suitable for you.
Diversified Lifestyle Fund
• 100% Diversified Growth A range of asset classes 0.635 0.683
including equities, bonds,
property, commodities, hedge
Why it might be good for you funds, derivatives and cash/
currencies around the world
Freestyle puts you in control by letting you choose the funds you believe Corporate Bond Lifestyle Fund
are right for you, and change them as and when it suits you.
• 100% UK Corporate Bond – Active Investment grade corporate Achieve long-term capital 0.305 0.312
Why it might not be good for you bonds denominated in Sterling growth by investing in
of all durations actively-managed
It takes more active involvement and decision making than the Lifestyle underlying funds
options, because you need to: Index-Linked Gilt Lifestyle Fund
• Think about how you want to invest your Member Account from the start. • 100% Index-Linked Gilt Index-linked UK government 0.085 0.089
bonds (70% with a maturity
• Check regularly on how your Member Account is invested to ensure period of five years or longer,
that it is growing to meet the target you have set for your Target 30% with a maturity period
Retirement Date. of up to five years)
• Ensure you move your Member Account into funds that align with how Pre-Retirement Lifestyle Fund
you plan to access your savings. • 100% Pre-Retirement UK government and Provide positive returns in 0.178 0.178
corporate bonds all market conditions, over
the medium to long term
Money Market Lifestyle Fund
• 100% Money Market Sterling denominated cash, Provide capital stability by 0.150 0.150
deposits and money investing in actively-managed
market instruments underlying funds
The percentage shown is split equally between the underlying managers within each fund. Actual distribution between funds and
therefore the AMCs/TERs for the active equity and diversified funds will fluctuate slightly with changes in the mix of the underlying
funds, within limits set by the Trustee.
*The AMCs and TERs are correct as at 31 December 2016 and are subject to change. See page 24 for details of the Freestyle fund investment charges.
** This Lifestyle fund is constructed from underlying funds that make up the three funds stated here, with 15% of assets in each of the three
active UK and three active global equity funds and 7.5% of the assets in each of the two active emerging market funds. The percentages shown
are therefore approximations only.
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