BlackRock is set to launch three funds targeted towards retirees benefitting from the new pensions freedoms coming into force in April.
The LifePath range, for use in defined contribution (DC) pension schemes, will consist of three funds designed to offer retirees an option depending on what they want to do with their pension on retirement. The move is an expansion of its existing LifePath range.
The three funds are target-date products to offer DC pension scheme members various options as they approach retirement.
The LifePath Retirement fund will be targeted towards people looking to buy an annuity at their retirement date, so the fund has a target-date of the client’s retirement.
The LifePath Capital fund will be designed for people who are planning to take their DC pension as a cash lump sum on retirement, while the LifePath Flexi fund is for those planning to leave their DC fund invested and draw down income from it.
The funds will be invested in the same assets up until 10 years from the retirement date, at which point the asset mix will start to differ to cater for the various retirement choices.
BlackRock said it has $120bn in assets in US target-date funds, and it already manages £980m in its exising LifePath target-date range in the UK, but the firm expects the new pensions rules to spur demand for such products in the UK.