Smart Pension

Smart Pension’s growth since it was set up in 2015 has been rapid. Its digital sign-on, built on its proprietary software, has enabled it to quickly take on 107,000 employers, making it the master trust provider with the most employer relationships, after Nest. Its member numbers have soared to more than half a million. The provider has launched several initiatives to engage with members digitally, including an Amazon Alexa skill that accesses valuations and other functionality through voice recognition software and an app that allows savers to track their pension balance in real time on their phone, self-select from 13 LGIM-run funds and increase contributions.

Smart’s does not charge employers but its member charging structure comes in at the top end of fixed price charges, right at the ceiling of the 0.75 per cent cap. As assets grow, Smart can expect pressure to bring these charges down.

This year has seen Smart grow its management team with high profile appointments from the regulator and key competitors. It is looking to profit from the expected consolidation in the market as master trust regulation approaches, by taking over players looking to exit the market.

The growth phase gives members 90 per cent exposure to equities, with derisking not starting until six years before state pension age. The glide path ends with a highly diversified portfolio at the retirement point with a 24 per cent equity exposure.

Asset Allocation charts

Data as of 31.03.18
BenchmarkOverall: outperform CPI after all charges over the long term. Growth phase: CPI+3%
Alternatives offered to defaultThree active alternatives and three passive ones, targeting cash, annuity and drawdown
Charging structure for membersBespoke
Charging structures for employersNone
Active members in default532,000
Transfer out to draw income?No
Approach to non-advised drawdownWe already offer it
Does default invest in ESG-screened funds?We may introduce it within the next 2 years
Scheme administratorSmart Pension
Scheme investment adviserHymans Robertson
Assets in default£95m
1 Year3 Year5 Year
Annualised returns before costs (%)1.423.56-
CAPA Index +/--1.21-1.73-1.04