Now: Pensions will for the first time offer a range of additional investment options alongside its default fund.
These will be available to members from summer 2024 and are designed to offer investment options to those with strict religious views or who want to a different risk profile.
At the same time Now is also launching a mobile app for members, a free consolidation service, and a new online portal for employers.
Now: said these changes will offer choice, flexibility and functionality for members — but the majority of its savers would remain in its default option.
Unlike most DC pension defaults this operates on a derivate-based risk parity basis. It has though significantly underperformed peers in recent years. According to the latest CAPA data the Now Pension default has returned 10.39 per cent compound over five years before charges. This equates to a 7.68 per cent return for members over this period, assuming a 0.5 per cent charge.
This is significantly below the average CAPA return of 33.2 per cent over five years (before charges) or 29.9 per cent, assuming the same 0.5 per cent charge.
The best performing default over this period was Aon, delivering a 54.25 per cent return over five years (before charges) or 50.47 per cent with a 0.5 per cent charge.
These figures relate to savers in the growth phase with 30-years until retirement.
Now: Pensions, owned by the Cardano Group, currently has over £4 billion of assets under management and remains one of the larger AE providers.
It said these developments to its proposition are supported by investment in new technology, with Now Pensions appointing TCS as its new administrative and technical partner from 2024 following a strategic review of the market.
Now: Pensions said: “We continue to believe our default solution suits the majority of our members. However, we want to be inclusive of the whole membership and acknowledge some members may have different needs and preferences based on religious beliefs, retirement goals and risk appetite.
“99 per cent of our members are invested in our default fund, designed to suit the retirement needs of most members who intend to cash in their savings at retirement. However, for those members who may want something different, we will provide a number of retirement plan options in 2024.”
Now: Pensions CEO Patrick Luthi says: “UK pensions provision has to evolve and prioritise members’ needs for accessible solutions which are easy to understand and use.
“We’ve invested a huge amount of time and effort to ensure our platform is fit for the future and can serve a growing membership, while also supporting wider consolidation in the DC market.”
Joanne Segars chair of the board of trustees at Now: Pensions adds: “These developments put Now: Pensions on track to be a driving force in the future of workplace pensions by meeting the needs of the modern workforce and employers.
“The plans show Now: Pensions is putting members’ outcomes at the heart of every decision, investing in technology and innovation to give people more control over their pensions.”
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