DrawdownJul 14 2020

Phoenix launches drawdown option for master trust

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Phoenix launches drawdown option for master trust

The drawdown option enables scheme members to access their pension funds from within their scheme and also includes four investment solutions based on the regulator’s investment pathways, which are due to be introduced for contract based pension schemes next year. 

Standard Life DC Master Trust scheme members face no additional charges for using in-scheme drawdown and will also keep any scheme discounts.

Jenny Holt, proposition director at Phoenix Group, said: “By introducing in-scheme drawdown to the Standard Life DC Master Trust pension scheme proposition, we’re making it simple and easy for pension scheme members to remain within their scheme while accessing their pension savings. 

“We know that it is important to support members with their decision making when accessing their pension savings, which is why we were keen to embrace the principles of the investment pathways architecture and have included new guided digital journeys to support scheme members. 

“We’re delighted to be delivering this enhancement, particularly at this time. Given the challenges that everyone has faced in light of Covid-19, this has been a huge effort and my colleagues should be proud of their achievements.”

The investment pathways are aimed at scheme members who need help when making investment decisions, with each pathway aligned to a separate fund which is suited to different drawdown objectives.

Each fund is based on the FCA’s four types of investment options, designed for consumers who either have no plans to touch their money in the next five years or plan to use their money to set up a guaranteed income within the next five years.

There is also an option for consumers who plan to start taking money as a long-term income within the next five years and those who plan to take out all their money within the next five years.

For example, the Standard Life Investment Pathway Option 1 fund, which is for people who will not access their money in the next five years, aims to provide a balance between growth and risk.

Meanwhile, the Standard Life Investment Pathway Option 4 fund, for people who plan to take all their money in the next five years, aims to provide a stable investment in the short-term.

The FCA proposed pension providers offer their non-advised customers investment pathways after it found many were solely focused on taking tax-free cash from their pensions and were "insufficiently engaged" with deciding how to invest funds that moved into drawdown.

Phoenix Group bought Standard Life Aberdeen’s insurance arm in August 2018 for £3.28bn.

Standard Life Assurance was put up for sale following the merger between Standard Life and asset manager Aberdeen in 2017. 

As part of the deal Standard Life Aberdeen acquired a shareholding of just under 20 per cent of Phoenix Group. 

amy.austin@ft.com

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