Pensions are powerful. Not only do they help you save for the future, but they can do great things for people and our planet – like helping fight climate change. We’re making several changes to how your money is invested to help do this. Further information on these changes is provided below.

(These changes do not apply if you are a Tesco (ex MPS) or Barclays member)

We are making changes to the underlying funds used in the Smart Growth – Moderate Risk fund. This fund is used in the growth phase of our glidepath strategies and available as a self-select option. If you have not made a decision on where to invest your money then you will be invested entirely or partly in this fund. We will be making the following changes, without any increase in the charges you pay:

The remaining allocation will stay invested in our ESG global equity funds and our 10% allocation to private credit, with strong ESG integration. The changes above aim to make your pension more sustainable, including helping reach our recently announced 2040 net zero goal. In light of this, we will be changing the fund name to the Smart Sustainable Growth Fund.

Further information on our sustainable journey, and the power you have with your pension, is available on our sustainable investing page.

Further information on the investments offered through the Smart Pension Master Trust, including the default investment option for those that haven’t made a choice, is available in the investment guide.

The current Smart Growth – Higher Risk and Smart Growth – Lower Risk versions of the lifestyle strategies will be removed. If you are currently invested in one of the funds below, you will shortly receive more details about how we are replacing them. Any savings you have invested in these funds will automatically be switched to the Smart Sustainable Growth (previously our Smart Growth Fund – Moderate Risk) lifestyle, shown above.

The following will remain available as self-select options if members wish to choose them:

These will not automatically de-risk members’ investments as they approach retirement, but members can make these changes themselves if they want to. As shown below, we will also be making changes to the underlying allocations of these two funds.

If you are currently invested in one of the funds below, you will shortly receive more details about how we are replacing them. Any savings you have invested in these funds will automatically be switched to the alternative funds shown.

If you do not want your investments in the Smart Future, Smart De-risking or Smart Lower Risk funds to be moved to these funds, you can sign into your member account and change your investments to alternative funds in the fund range. Any investment changes need to be made by 30 November 2022, or you will be automatically switched.

The Smart Future, Smart De-risking and Smart Lower Risk Funds will be removed from the fund range.

We will be introducing two new funds – the Sustainable Growth Core and Sustainable Growth Plus funds, both of which aim to provide different levels of responsible investing and impact investments. These will be in addition to the recently re-named Smart Sustainable Growth Fund.

We will be offering three growth phase options for the investment lifestyle strategies, namely the Smart Sustainable Growth Fund (previously our Smart Growth Fund – Moderate Risk) and two new additional options, which are the two sustainable growth funds shown above.

These choices give members the option to flex down to “Core” or up to “Plus” in the level of active impactful investments they want. The Sustainable Growth Core fund will have a lower fee, and the Sustainable Growth Plus fund a slightly higher fee, compared to the middle Smart Sustainable Growth fund.

In our lifestyle strategies, members will continue to be able to choose between three retirement targets – drawdown (also known as flexible income), annuity (for example guaranteed income) and cash (for example a lump sum).

We are also making changes to the underlying funds below, to make them more sustainable. There will be no changes to the overall objectives of these funds.

There will also be a slight decrease in the annual management charges for these funds. The funds that will be excluded from this are:

The annual management charges for these three funds will stay the same. The new charges are shown in the investment guide, available in the investments section of the app.

Below are additional details on the future allocations of the new underlying funds, with additional links where available. Please note that any performance and fees shown on the fund manager’s website may differ from the version of the fund Smart Pension will invest in and are shown for information only.

Please note that the above allocations may be subject to change but will remain in line with the overall fund objective.

If you are in the Smart UK FTSE 100 Equity Index Fund, you will shortly receive more details of your savings in this Fund. Any savings that you currently have invested in the Smart UK FTSE 100 Equity Index Fund will be automatically moved into the Smart Sustainable Growth Fund unless you complete the form sent to you, opting to remain in the fund. The form must be completed by 30 November 2022, or you will be automatically switched.

As mentioned above, we are making the above changes to current funds without any increase in the charges you pay. Some of the current funds will decrease in cost. We are introducing new funds for you to choose from, in particular, the Smart Sustainable Growth Fund Plus, this may be at an increased cost to the funds you are currently invested in.

There are no explicit costs to your pension savings as part of the above changes. However, all fund switches may incur implicit transaction costs, including when buying and selling the underlying assets in which the funds are invested.

These transaction costs, such as broker’s commission and local taxes, are incorporated into the performance of the investment funds. The Trustee, who is ultimately responsible for looking after the pension scheme, has determined that these are likely to be minimal and outweighed by the benefits of moving to the new investments.

The factsheets and investment guides might not reflect all of the above information but will be updated shortly.

If you would like personalised advice, you should get in touch with your independent financial adviser. If you do not have an independent financial adviser, you can seek professional financial advice through the MoneyHelper website.

Various events can cause investments to go up and down, including global pandemics, changes in government or central bank policies, wars and crises, changes in the demand and supply of certain products, and much more. While we can’t control the impact of these changes on investments, we look to offer a range of investment options and reduce the fluctuations by using lots of different types of investments in our investment strategies. This also includes making improvements to the investment options we offer. We believe the changes outlined here will be beneficial for members in the long term.

During this period of volatility, we recommend that you view your pension savings from a long-term perspective. It is a normal part of investing for investments to go up and down in the shorter-term as you save for retirement.

If you are close to retirement and in a predetermined investment strategy, you may wish to review the retirement target you have chosen and your retirement date. If you would like personalised advice, you should get in touch with an independent financial adviser.

To find out more about the volatility in your pension savings, please visit our article on understanding this.

Get in touch if you have any questions by completing our online contact form.