The LifePath Retirement, LifePath Capital and LifePath Flexi funds will offer clients a range of options in line with the pensions reforms due to be implemented in April.
LifePath Retirement is aimed at clients planning to purchase an annuity upon retirement, LifePath Capital those intending to collect their defined contribution fund as a lump sum, while LifePath Flexi will service those looking to draw down income from a still-invested DC fund.
All three funds will be invested in the same group of growth holdings until 10 years before retirement, at which point they will take different investment paths in order to stay on track for the retirement date of the respective clients.
The funds will become active on 6 April, managed by the UK DC team – which runs the existing LifePath offering – investing in passive funds allocated according to BlackRock research.
The firm’s current target-date offering will subsequently close to investors.
Scheme members of the existing LifePath range more than 10 years retirement will be automatically transferred to the new offering on 4 December, but may change at any point from 6 April. Those within 10 years of retirement have the option to remain in the current format.
The announcement comes following BlackRock’s Investor Pulse survey, released 28 January, that showed that 26% of those questioned will remain on their current pension scheme, 17% intend to withdraw their pension and reinvest it elsewhere, while 28% were undecided on future actions.
Paul Bucksey, BlackRock’s head of UK DC, said: “Retirement is changing dramatically in the UK and we believe workplace pension schemes need to offer members straightforward, easy-to-understand options to help them achieve the retirement they want.
“With most people invested in default strategies, it is imperative the industry provides appropriate solutions whether people want to buy an annuity, take a lump sum, stay invested drawing an income, or a combination of all three options.”
