Passenger transport provider Arriva set up its group flexible retirement plan with Standard Life in March 2013. The scheme has 11,826 members, and is overseen by a governance committee.
The scheme’s default fund uses Standard Life’s lower-to-medium-risk lifestyle strategy, which aims to provide long-term growth whilst investing in a diversified portfolio of assets. This is the second lowest risk level of the five risk-rated lifestyle strategies Standard Life has developed, so employers can select the risk appetite that is most appropriate for their workforce.
Arriva company secretary Ken Carlaw says that a key decision was to define the lower- to medium-risk lifestyle strategy as the default strategy for members, who could then make an alternative choice if they felt they wanted to do so.
“We were conscious of the fact that, for many members, this might be their first experience of pensions and investments and so we wanted the default fund to offer a low-involvement, lower-risk experience to members which they could change if they wished.”
Carlaw says the lifestyle strategy investments may include equities, bonds, absolute-return funds and property, thus reducing the risk associated with being solely invested in any one asset class.
The lifestyle profile gradually moves a member’s investments into a combination of gilt fund and money market pension fund as the employee nears retirement.
“Switches on the lifestyle investments begin between 10 and five years before retirement, depending on the risk profile of the lifestyle fund the member chooses, with the lower-risk funds commencing lifestyling earlier.”
As well as the lifestyling strategies, there are 12 freestyle strategies and, if required, a member can access Standard Life’s full range of funds.