Investment Approach

What investment choices are available?

When a Member joins the Scheme, contributions are automatically invested in a combination of funds, depending on their age.  This is known as the default Lifestyle Strategy.   

If a Member does not wish to be part of the default Lifestyle Strategy they can make their own investment choices. This is known as the Freestyle Option.

The default Lifestyle Strategy funds and Freestyle Option funds are summarised below:

Lifestyle Strategy Funds	WPT Growth Fund	To provide investment growth through diversified exposure to the UK and overseas equity markets. Download our fund fact sheet	Freestyle Funds
	WPT Volatility Reduction Fund	A gilts and bonds fund which aims to provide long-term investment growth with lower short-term volatility. Download our fund fact sheet
	WPT Capital Protection Fund	To provide stability and protect, in capital value terms, that part of the fund that is likely to be taken as tax-free cash. Download our fund fact sheet
	WPT Annuity Protection Fund	To build up exposure to assets that are more closely matched to the investment related influences on annuity prices. Download our fund fact sheet
	WPT Diversified Fund	To provide a long term investment return similar to equities, with lower short term volatility, through active management. Download our fund fact sheet
	WPT Index-Linked Gilts Fund	A passively managed index-linked gilts fund. Download our fund fact sheet

If the Member does not choose to invest in any of the 6 funds, contributions are invested in the default Lifestyle Strategy.

What is the default Lifestyle Strategy?

The default Lifestyle Strategy means that contributions are invested in a combination of funds from joining the scheme until retirement. It is designed to meet the changing investment needs of a typical pension investor as they progress through life towards their Normal Retirement Age.

Foundation Phase (up to age 31)

The foundation phase aims to provide both stability and investment growth. Members’ funds are split 50/50 during this phase between the WPT Growth Fund and the WPT Capital Protection Fund.

Growth Phase (between the ages of 32-49)

The growth phase aims to maximise the potential for growth through 100% equity investment. The WPT Growth Fund is used for the growth phase.

Protection Phase (from the age of 50)

The protection phase is based on the assumption that the Member retires at 65 years. The protection phase starts at age 50 and is completed at age 65. To spread market timing risk, quarterly switches are in place to switch Members’ assets from the WPT Growth Fund to a combination of the WPT Growth Fund, the WPT Volatility Reduction Fund and the WPT Capital Protection Fund. At retirement, Members’ funds will be invested 100% in the WPT Capital Protection Fund, as follows.

Age	Growth Fund	Volatility Reduction Fund	Capital Protection Fund
30 & below	50.0%	0.0%	50.0%
31	75%	0.0%	25.0%
32 to 49	100.0%	0.0%	0.0%
50	100.0%	0.0%	0.0%
51	96.0%	4.0%	0.0%
52	92.0%	8.0%	0.0%
53	88.0%	12.0%	0.0%
54	84.0%	16.0%	0.0%
55	80.0%	20.0%	0.0%
56	69.0%	26.0%	5.0%
57	58.0%	32.0%	10.0%
58	47.0%	38.0%	15.0%
59	36.0%	44.0%	20.0%
60	25.0%	50.0%	25.0%
61	20.0%	40.0%	40.0%
62	15.0%	30.0%	55.0%
63	10.0%	20.0%	70.0%
64	5.0%	10.0%	85.0%
65	0.0%	0.0%	100.0%

Note for Members aged 50 and over

If Members choose to retire before the Normal Retirement Date of age 65, they may not be subject to the 15 year automatic switching transition during the protection phase.

Advantages and disadvantages of using the default Lifestyle Strategy

Advantages

• Automatic investment fund switching during approach to retirement to less volatile assets.
• When approaching retirement, less volatile assets are used which make it easier to determine the amount available.
• Members do not need to do anything. The Trustee will review the funds being utilised on the Member’s behalf and will provide updates on any changes to the funds being used.

Disadvantages

• The choice of how to use pension savings at the point of retirement is an individual one but the default Lifestyle Strategy is designed to meet the needs of the average Member.
• A Member’s attitude to risk may be different to the assumed attitude to risk used when creating the default Lifestyle Strategy and thus the default Lifestyle Strategy may not be suitable.
• The choice of funds is decided by the Trustee rather than the Member.

What is the Freestyle Option?

If Members do not wish to be part of the default Lifestyle Strategy they can make their own investment choices from the 6 investment funds. This is known as the Freestyle Option.

It is important to note that selection of the Freestyle Option means that Members will not be part of the default Lifestyle Strategy. Therefore, funds will not be subject to the automatic age related switching process. Members should ensure that the fund(s) selected reflect their acceptance of investment risk over time.

Members who have chosen a Freestyle Option are entitled to switch investments via Benpal.  Switching incurs transaction costs which is the difference between the buying and selling prices of investments, known as the ‘dealing spread’.  To arrange a switch, Members should click on ‘My Pension’ and ‘Manage Investments’ in their Benpal account.  Members may choose to switch into the default Lifestyle Strategy at any time.

It is important that Members take time to understand how their money is invested and to keep their investment choices under review.  If they are unsure about their investment options they may wish to seek independent advice.  Details of financial advisers can be found at the Financial Conduct Authority website.

Can the value of pensions go down as well as up?

The value of a pension pot depends on contributions paid in, investment performance, charges and the cost of buying pension on retirement (if applicable).  Over the years the value of investments can go up and down. Even if the value goes down in the short term, it would be expected to recover in the long term.